FOR IMMEDIATE RELEASE
Contact: John Kabateck, California State Director, john@kabstrat.com
or Tony Malandra, Senior Media Manager, anthony.malandra@nfib.org

SACRAMENTO, Calif., Jan. 8, 2026—NFIB, the nation’s leading small business association, yesterday joined with five other business groups in asking the Supreme Court of California for permission to file an amici curiae (friends of the court) brief supporting the defendant in the case of Leeper v. Shipt.

“The ramifications of this case will go far beyond just the parties involved,” said John Kabateck, State Director for NFIB in California. “Small business owners and other employers had to wait 20 years to finally win some reforms to the state’s Private Attorneys General Act (PAGA), which quickly evolved from a well-intentioned but misguided law into a legal weapon to wring settlement money out of employers, the biggest amounts of which went to law firms instead of the supposedly aggrieved. It would be a pity to see Leeper v. Shipt halt the progress. Add in the shakedown lawsuits allowed under the Americans with Disabilities Act (ADA) and California’s reputation as the land of endless litigation will severely impede our ability to start and sustain a healthy economy.”

This case asks whether employees may bring a “headless PAGA claim,” which is a claim where an employee seeks civil penalties on behalf of other employees while intentionally forgoing their own relief in order to bypass mandatory arbitration requirements. This tactic creates legal uncertainty and conflicts with United States Supreme Court precedent on PAGA and arbitration. NFIB’s brief argues against headless PAGA claims, noting that “PAGA’s statutory evolution and purpose demonstrate the Legislature’s intent that a PAGA plaintiff must bring a PAGA action both on behalf of herself and on behalf of others. The Legislative history does not support Leeper’s attempt to rewrite PAGA to replace ‘on behalf of’ with ‘for the benefit of.’ Whatever the Court decides as to Leeper’s pre-reform claims, ‘headless’ PAGA claims are not permitted after the 2024 PAGA amendments. Headless PAGA actions will only further exacerbate the extent to which certain attorneys bring abusive PAGA actions primarily ‘for the benefit’ of themselves.”

Background

A deal forged in 2024 reformed the state’s horrendously bad anti-employer law, the 20-year-old Private Attorneys General Act (PAGA), but it took the threat of a ballot initiative, the Fair Pay and Employers Accountability Act, to bring some of the reluctant parties to the table. Given the outcome of a ballot measure such as Proposition 36, which showed people fed up with a lot of California’s current system, it was probably wise for the much-too-powerful attorneys’ lobby in this state to bargain rather than block.

A lawsuit is no small matter to small business. The law firm of Novian & Novian says, “On average, it costs employers around $75,000 to work with an employment lawyer to settle a claim before it reaches trial. However, if the case progresses to court, the expenses can skyrocket, with pre-trial defense costs easily exceeding $125,000.”

The NFIB Small Business Legal Center protects the rights of small business owners in the nation’s courts. NFIB is currently active in more than 40 cases in federal and state courts across the country and in the U.S. Supreme Court.

Keep up with the latest California small business news at www.nfib.com. Follow us on X @NFIB_CA and on Facebook @NFIB.CA.

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For over 80 years, NFIB has been advocating on behalf of America’s small and independent business owners, both in Washington, D.C., and in all 50 state capitals. NFIB is a nonprofit, nonpartisan, and member-driven association. Since our founding in 1943, NFIB has been exclusively dedicated to small and independent businesses and remains so today. For more information, please visit nfib.com.

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