June 16, 2021

Volume XI, Number 167

Advertisement

June 15, 2021

Subscribe to Latest Legal News and Analysis

June 14, 2021

Subscribe to Latest Legal News and Analysis

Settlement of Individual Claims Does Not Strip an Employee of PAGA Standing

In a blow to California employers, the California Supreme Court ruled that an employee’s settlement of his own Labor Code claims does not deprive the plaintiff of standing to bring a claim under the California Private Attorneys General Act (PAGA).

In Kim v. Reins International California, Inc., the court held that the plaintiff still had standing based upon PAGA’s plain language, the statute’s underlying purpose, and the legislature’s intent. The court also pointed out that the parties’ resolution of the plaintiff’s individual claims by settlement had expressly excluded the plaintiff’s PAGA claims.

Looking first to the language of the statute, the court explained that to be an “aggrieved employee,” PAGA requires only two elements be satisfied. The plaintiff must be someone “who was employed by the alleged violator” and “against whom one or more of the alleged violations was committed.” The court found that the plaintiff employee in this case easily satisfied both requirements because the defendant employed him, and he alleged that he had suffered at least one Labor Code violation.

The court went on to reject the defendant’s arguments that the plaintiff’s standing was defeated because the plaintiff’s injury had been redressed through settlement. The court explained that “[t]he Legislature defined PAGA standing in terms of violations, not injury.” As such, the plaintiff’s settlement of his individual claims “did not nullify” the alleged PAGA violations. The court also noted that the plain language of the statute does not require that an employee claim that any economic injury resulted from the alleged violations. Nor, for standing purposes, does the statute require that the named plaintiff must have experienced each and every violation experienced by the employees he seeks to represent.

According to the court, the purpose of the PAGA statute bolstered this conclusion. It emphasized that a named plaintiff in a PAGA claim acts on behalf of the state, because the state can “deputize anyone it likes” to pursue a PAGA claim. The court concluded that requiring a named plaintiff in a PAGA claim to establish actual injury would run contrary to the remedial purpose of the statute. 

As a final point, in the instant decision, the court rejected the employer’s claim preclusion argument. The court noted that the parties’ previous settlement specifically excluded the PAGA claims, and thus those claims had not yet been resolved.

This case could create new issues for employers and employees who seek to resolve claims on an individual basis. For this reason, it is smart to review your settlement agreements with counsel along with the scope of the claims that are being released.

© 2021 BARNES & THORNBURG LLPNational Law Review, Volume X, Number 73
Advertisement
Advertisement
Advertisement

TRENDING LEGAL ANALYSIS

Advertisement
Advertisement
Advertisement

About this Author

Mark Wallin, Attorney, BT, Chicago, Labor Employment
Of Counsel

In order to provide the best counsel, Mark Wallin believes it is his role to understand his clients’ business needs so he can help them determine what resolution will provide the most benefit. His keen ability to understand his clients’ practical concerns allows him to advise on the best path to successfully resolve issues – whether through traditional litigation or negotiated resolution.

In the course of his practice, Mark has focused on providing the highest-level of service to his clients and building long-term relationships. Specifically, he defends employers in a wide range of...

312-214-4591
Scott Witlin Employment lawyer Barnes Thornburg
Partner

Scott J. Witlin is a partner and the administrator of the Labor & Employment Department in the firm's Los Angeles office. He is Co-Chair of the firm's Wage and Hour Practice Group and a member of the firm's Entertainment, Media and Sports Practice Group.

Scott assists companies in dealing with the challenges of employing workers in California and throughout the U.S. Scott's practice includes both traditional labor and employment law matters, including wage and hour class actions, arbitrations, collective bargaining negotiations, compliance with various guild and union agreements...

310-284-3777
Peter J. Wozniak Barnes Thornburg Chicago  Labor Employment
Partner

Pete Wozniak is a vigorous advocate who strives to help his clients navigate issues that can be fraught with challenges as painlessly and efficiently as possible. He is a candid and personable counselor, offering his clients direct advice by leveraging his deep experience performing a broad range of outcome critical functions for complex labor and employment matters.

Pete represents clients across a number of industries, including transportation and logistics, restaurants, retail, manufacturing, and temporary staffing. Handling a number of high profile matters, he identifies the...

312-214-2113
Advertisement
Advertisement