An Employer that Settles a Plaintiff’s Individual Labor Code Claims May Defeat Associated PAGA Claims
SUMMARY: An employee sued alleging wage and hour claims against his former employer both as an individual and as a representative of other employees in a Private Attorneys General Act (“PAGA”) action. The employee had signed an arbitration agreement during his employment. The trial court ordered his individual claims into arbitration, while it “stayed,” or paused, the PAGA action until arbitration ended. The employee settled his claims, and agreed to dismiss those claims in the trial court. The trial court granted the employer’s motion and dismissed the PAGA claims because the employee was longer “aggrieved,” meaning he could no longer sue under PAGA. The Court of Appeal agreed.
QUESTION FOR THE SUPREME COURT: The California Supreme Court will decide whether businesses can defeat PAGA claims by settling with the plaintiff. The specific question is whether an employee-plaintiff is still an “aggrieved employee” under PAGA, even though the employee has recovered the losses alleged in the lawsuit. Kim v. Reins International California, Inc.
Please contact Phillip Maltin for further information about these cases pending before the California Supreme Court.