Belkorp AG loses bid to force ‘headless’ PAGA claim into arbitration

The strategy is known in California employment law circles as a “headless” PAGA action – a term the court itself used. Here is why it matters. 

Since the US Supreme Court’s 2022 decision in Viking River Cruises v. Moriana, employers have relied on arbitration agreements to split PAGA actions in two – sending the worker’s individual claims to arbitration while the broader representative claims sit in court, sometimes for years. The Fifth District’s own earlier decision in CRST Expedited v. Superior Court found that this forced split caused roughly two-year delays and worse outcomes for workers in arbitration. 

The worker here skipped the split. His February 2025 complaint in Stanislaus County Superior Court stated he sought “only to prosecute his non-individual PAGA claims” and brought the action “exclusively as a proxy of the State of California.” Belkorp moved to compel arbitration in July 2025. The trial court denied it. 

The trial court also flagged what it called a breach of the duty of candor – Belkorp had not disclosed that a key case it relied on, Leeper v. Shipt, had been under California Supreme Court review since April 2025. 

On appeal, the Fifth District sided with CRST, which held that the word “and” in the PAGA statute connecting individual and representative claims is ambiguous and can be read as “or.” The court cited CRST’s illustration: if a parent gives a child permission to have cookies and ice cream, eating only the cookies does not break the rule. The greater includes the lesser.