On December 29, 2017, the California Court of Appeal Second Appellate District held that an employee who settled and dismissed his individual wage and hour claims against his former employer no longer had standing to maintain a Private Attorneys General Act (PAGA) cause of action against that same employer. Kim v. Reins International California, Inc., 2d. Dist. Case No. B278642 (filed December 29, 2017).
Plaintiff Justin Kim (Plaintiff) sued his former employer, Reins International California (Reins), alleging individual and class claims for wage and hour violations. In addition, Plaintiff sought civil penalties on behalf of the state and aggrieved employees under PAGA. Reins successfully moved to compel arbitration of Plaintiff’s individual claims based on an arbitration agreement that Plaintiff signed at the start of his employment with Reins. While arbitration was pending, Plaintiff accepted Reins’ offer to compromise under California Code of Civil Procedure section 998. As a part of the agreement, Plaintiff dismissed his individual claims with prejudice and dismissed the class claims without prejudice. Thus, Plaintiff was only left with his PAGA cause of action.
Reins filed a motion for summary adjudication of Plaintiff’s PAGA cause of action arguing that Plaintiff did not have standing because he was no longer an aggrieved employee. The court granted Reins’ motion and dismissed Plaintiff’s case. The court concluded that once Plaintiff dismissed his individual claims with prejudice, he was “no longer suffering from an infringement or denial of his legal rights.” The court reasoned that Plaintiff’s rights were completely redressed and, thus, he was no longer an aggrieved employee. Plaintiff appealed.
The appellate court affirmed, reiterating the trial court’s reasoning. PAGA claims can only be made by a person with a grievance against his or her employer for Labor Code violations. If an employee brings both individual and PAGA claims in a single lawsuit, and then settles and dismisses the individual claims, the employee is no longer aggrieved and therefore does not have standing under PAGA.
While the court determined that Plaintiff was no longer an aggrieved employee with standing to bring a PAGA claim, it noted that other aggrieved employees were not barred from bringing a PAGA claim against Reins. The court rejected Reins’ proposal that the trial court’s dismissal with prejudice of Plaintiff’s PAGA claim was a decision on the merits that would bar other aggrieved employees from bringing a PAGA claim against Reins.
If you feel that your employer violated the California Labor Code, please feel free to call Hunter Pyle Law for a free consultation at (510)-444-4400 or firstname.lastname@example.org.