Settling Personal Claims Kills PAGA Standing

Kim v. Reins Int’l. Cal., Inc., No. B278642 (D2d4 Dec. 29, 2017)

Plaintiff here brought some PAGA claims along with some regular wage and hour stuff. The wage and hour claims got sent to arbitration, and the PAGA claims—which can never be sent to arbitration—were put on ice while that was happening. The parties settled the stuff in arbitration, and as part of that, Plaintiff dismissed those claims with prejudice.

But then the case returned to superior court to deal with the PAGA issues. The employer argued, successfully, that dismissing the wage and hour claims meant that Plaintiff was no longer an “aggrieved employee,” and thus that he no longer had standing to stand in the State’s stead as a private attorney general. The PAGA claims were dismissed and Plaintiff appealed.

A PAGA claim can be brought “by an aggrieved employee on behalf of himself or herself and other current or former employees.” Labor Code § 2699(a). “‘[A]ggrieved employee’ means any person who was employed by the alleged violator and against whom one or more of the alleged violations was committed.” § 2699(c). 

The Court of Appeal finds that by dismissing his personal Labor Code claims—for which Plaintiff could recover damages—Plaintiff is no longer “aggrieved” to the extent he can pursue claims for the same violations—for which Plaintiff could recover statutory penalties for the State. That doesn’t mean some other aggrieved employee can’t make the exact same claims. It just means this particular Plaintiff no longer has standing to assert these claims under PAGA.

 Affirmed. 

This is usually a pretty good panel in the 2/4, but this ruling doesn’t really make sense. Nothing about Plaintiff’s settling out and dismissing his personal Labor Code claims means he no longer fits the definition of “aggrieved employee” in § 2699(c). He just got paid some money to let go of those claims and to dismiss them under the terms of a settlement. He didn’t admit the violations common to the PAGA and Labor Code claims didn’t have merit. He didn’t stipulate to the entry of an adverse judgment that could have some preclusive effect. 

I don’t get it.