It’s been a busy summer for California’s Private Attorneys General Act (PAGA). First, in July, California passed sweeping PAGA reform. Then, in August, the California Supreme Court issued two decisions related to who can file or intervene in PAGA-related cases. In one case, the court held that employees cannot pursue PAGA claims against public entities. Now, in the other case, the court limits a PAGA plaintiff’s ability to intervene in another PAGA action and object to a settlement (Turrieta v. Lyft, Inc., No. S271721 (Aug. 1, 2024)).
The PAGA enables an “aggrieved employee” to act as a proxy for the state and recover civil penalties from employers for Labor Code violations. Prior to filing a PAGA action, an aggrieved employee must file a notice with the California Labor & Workforce Development Agency (LWDA). Since PAGA was enacted, the number of PAGA notices filed with the LWDA has increased year after year. With increased filings comes the potential for multiple notices to be filed against the same employer alleging the same or similar claims. In fact, as the Turrieta court noted, this “has become a common scenario in PAGA litigation.”
Overlapping PAGA actions creates the potential for the parties in one action to reach a settlement that then resolves the overlapping claims in the other actions — which is exactly what happened in Turrieta. Three former Lyft employees — Tina Turrieta, Brandon Olson and Million Seifu — filed separate actions against Lyft seeking PAGA penalties for Lyft’s alleged failure to pay minimum wages, overtime premiums and business expense reimbursements.
While other cases were pending, Turrieta and Lyft reached a settlement that included an agreement that Turrieta would amend her complaint to include all PAGA claims that could have been brought against Lyft so those claims would be included in the proposed settlement.
Turrieta provided notice of the settlement to the LWDA and filed a motion with the court to approve the settlement, which is required for PAGA settlements. The LWDA did not oppose or object to the proposed settlement. However, when Olson and Seifu learned of the proposed settlement, they both attempted to intervene in the Turrieta case and object to the settlement. The trial court rejected both parties’ attempts on the grounds that they lacked standing to intervene and object. The court approved Turrieta’s settlement and entered final judgment consistent with the settlement. Olson and Seifu filed a motion to vacate the judgment, which was denied on similar grounds.
Olson and Seifu appealed, and the Court of Appeal affirmed the trial court’s decision. Olson appealed to the California Supreme Court, which granted review to address the question of what right a plaintiff in a PAGA action has to intervene, object to or move to vacate a judgment in another PAGA action alleging overlapping claims.
In a 5-2 decision, the California Supreme Court held that an employee prosecuting a PAGA action as a proxy for the state does not have the right to:
- Seek intervention in another employee’s PAGA action;
- Move to vacate a judgment entered in the other action; or
- Require a court to receive and consider objections to a proposed settlement of that action.
The court relied on the PAGA’s statutory language and the broader statutory scheme for their ruling.
Employers who are defending overlapping PAGA actions should consult legal counsel regarding this ruling’s effect.
All employers — not just those who have received a PAGA notice or action — can take advantage of one key element of the PAGA reform — the ability to reduce their potential exposure to PAGA penalties by taking “reasonable steps” to comply with the Labor Code. CalChamber’s PAGA Wage and Hour Compliance toolkit is chock-full of tools to help employers take those reasonable steps toward compliance.
Erika Barbara, Senior Employment Law Counsel, CalChamber
CalChamber members can also utilize the new Wage and Hour Payroll Audit Checklist for California Employers on HRCalifornia to assess compliance. Not a member? See how CalChamber can help you.
