Employers are applauding the California Supreme Court for recently diminishing the scope of the Private Attorneys General Act (PAGA), which allows workers to bring civil suits against companies for violations of the state Labor Code.
In an Aug. 1 opinion, the high court decided that employees who file PAGA lawsuits over issues such as minimum wages, overtime and business expense reimbursements don’t have the authority to challenge or attempt to vacate settlements won by other employees in overlapping claims against the same employer.
The court made its decision in the case of Turrieta v. Lyft et al., which involved PAGA filings against the rideshare company. In that case, gig worker Tina Turrieta signed an agreement with Lyft to settle her PAGA claims with the company, but other Lyft workers, including Brandon Olson, attempted to file separate motions to intervene and vacate Turrieta’s settlement.
Under PAGA, which took effect in 2004, “aggrieved” employees are empowered to recover civil penalties on the state’s behalf if the state Labor and Workforce Development Agency (LWDA) declines to act on them. In PAGA lawsuits, the LWDA generally recovers the majority of recovered penalties, with plaintiffs’ attorneys and workers getting the balance, according to the court’s opinion.
“We hold that an aggrieved employee’s status as the state’s proxy in a PAGA action does not give that employee the right to seek intervention in the PAGA action of another employee, to move to vacate a judgment entered in the other employee’s action, or to require a court to receive and consider objections to a proposed settlement of that action,” the high court said.
The justices added that the state legislature was free to recognize the rights sought by plaintiff Olson and other PAGA plaintiffs, if that is what lawmakers intended when the law was enacted.
Employer groups expressed satisfaction with the high court’s ruling.
“This is a positive result for employers faced with PAGA litigation,” Bianca Saad, the California Chamber of Commerce’s general counsel for labor and employment, said in an email to the Southern California Record. “The decision affirms an employer’s ability to settle such cases without unnecessary disruption from other litigants.”
Attorney Heather Domingo said in an article for the National Law Review that the court’s opinion was a win for California employers since they can now be more confident that negotiated settlements of PAGA claims will be approved without interference.
“The court’s opinion also may create a race for plaintiffs to settle PAGA actions where there are multiple cases with overlapping claims, perhaps giving employers a valuable negotiation tool,” Domingo said.
In the Turrieta case, the settlement with Lyft amounted to $15 million.
The Supreme Court’s decision comes in the wake of the Gov. Gavin Newsom signing into law a PAGA reform deal that would rein in penalties on employers that act quickly to resolve employees’ complaints, dedicate a greater share of penalty proceeds to aggrieved employees and provide more resources and funding so that LWDA can investigate alleged Labor Code violations rather than rely on civil courts. The deal was the product of negotiations between the California Chamber and the California Labor Federation/AFL-CIO.