Providing Developments & Insight on Trending Topics in Employment Law

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Providing Developments &amp; Insight on Trending Topics in Employment Law

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California employers can have greater reassurance that an approved PAGA settlement is less likely to be disrupted by other plaintiffs with separate and overlapping claims.

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PAGA plaintiffs are not foreclosed from seeking consolidation or coordination in overlapping PAGA actions or from offering objections or comments on the fairness of proposed settlements to courts, which may be considered in the courts’ discretion.

While the court expressly declined to opine on the newest <a href="https://www.bakerlaw.com/insights/paga-reforms-usher-in-a-new-era-of-california-wage-and-hour-litigation/" target="_blank" rel="noreferrer noopener">PAGA reforms</a>, it did invite the Legislature “to decide whether statutory recognition” of the right to intervene “is wise and/or necessary to achieve PAGA’s goals.”

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In a welcome win for employers, the California Supreme Court recently blocked a PAGA plaintiff’s attempt to intervene and object to another PAGA plaintiff’s proposed settlement as a matter of right, in Turrieta v. Lyft, Inc., No. S271721. Resolving an appellate court split, the court held in a 5-2 decision:

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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.

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California’s Private Attorneys General Act of 2004 (PAGA) provides a private enforcement mechanism for employees to pursue claims as allegedly “aggrieved employees” on behalf of the Labor and Workforce Development Agency against employers that allegedly violate the California Labor Code. PAGA actions are almost always brought on a representative basis. However, because representative PAGA actions have lacked the procedural safeguards typical of class actions, they are far easier to pursue. Because of this and several decisions regarding the arbitrability of PAGA claims, PAGA litigation has steadily increased year after year.

Turrieta v. Lyft, Inc.

As the court in Turrieta v. Lyft, Inc. recognized, the case involved “what has become a common scenario in PAGA litigation: multiple persons claiming to be an ‘aggrieved employee’ within the meaning of PAGA file separate and independent lawsuits seeking recovery of civil penalties from the same employer for the same alleged Labor Code violations.”

Three drivers for Lyft, Inc. (Lyft) – Tina Turrieta, Brandon Olson and Million Seifu – each filed a separate action seeking civil penalties under PAGA for Lyft’s alleged failure to pay minimum wages, overtime premiums and business expense reimbursements. Turrieta and Lyft signed an agreement settling Turrieta’s action for $15 million. Prior to the settlement approval hearing, Olson and Seifu filed separate motions to intervene in Turrieta’s action and submitted objections to the settlement. The trial court denied the motions, approved the settlement and later denied the motions of Olson and Seifu to vacate the judgment.

Olson and Seifu appealed, and the Court of Appeal affirmed, finding that the trial court had properly denied the intervention motions and that Olson and Seifu lacked standing to move in the trial court to vacate the judgment or to challenge the judgment on appeal.

The California Supreme Court affirmed the Court of Appeal’s judgment. It found that the right as a state proxy to assert the state’s alleged right to intervene would be inconsistent with PAGA. The court based its reasoning on the plain text of PAGA and the legislative history and statutory scheme as a whole. The court concluded that a PAGA plaintiff has “authority to prosecute a PAGA action after commencing one,” which “necessarily implies the power to use the ordinary tools of civil litigation” such as serving the complaint, engaging in discovery and motion practice, and attending trial – but not necessarily intervention. Because the text is not dispositive on the question of intervention, the court analyzed the broader statutory scheme and found the recognition of intervention power is neither reasonably necessary to effectuate PAGA’s purpose nor consistent with the Legislature’s intent. In the act’s express provisions, the Legislature specifically looked only to the courts and to the Labor and Workforce Development Agency to effectively oversee PAGA settlements.

This decision may impact how employers and plaintiffs alike proceed in pending and forthcoming PAGA litigation. Plaintiffs may feel incentivized to be the first to reach a PAGA settlement, whereas employers may have greater confidence in the finality of approved PAGA settlements. <a href="https://www.bakerlaw.com/services/labor-and-employment/california-labor-and-employment/" target="_blank" rel="noreferrer noopener">BakerHostetler’s California Labor and Employment team</a> is available to assist California employers involved in PAGA litigation and guide them toward efficient and strategic resolution of representative wage and hour claims.

It’s Settled: A PAGA Plaintiff Has No Right to Intervene, Vacate or Object to Another PAGA Plaintiff’s Settlement, Affirms the State’s Highest Court