Tuesday, January 2, 2018
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Court of Appeal:
Plaintiff Settling Own Claims Can’t Maintain PAGA Action
That Person Is No Longer ‘Aggrieved,’ Justices Say
By a MetNews Staff Writer
A former employee who settles individual claims against the employer no longer has standing to maintain an action under the Labor Code’s Private Attorneys General Act of 2004, the Court of Appeal for this district held Friday.
The opinion by Justice Audrey B. Collins of Div. Four affirms a summary judgment by Los Angeles Superior Court Judge Kenneth R. Freeman in favor of the employer, Reins International California, Inc., which operates restaurants.
Reins was sued by Justin Kim who had been a training manager. He claimed, in his putative class action, that the title “training manager” was pretextual because persons given that job description managed no one, and that it was a ruse to skirt overtime-pay requirements by proclaiming them salaried employees.
After Kim settled his individual claims, Reins argued that he was no longer an “aggrieved employee” under the Private Attorneys General Act (“PAGA”).
Trial Court’s View
Freeman agreed, declaring that once Kim settled, he “was no longer suffering from an infringement or denial of his legal rights,” adding:
“His rights have been completely redressed. He no longer is aggrieved.”
PAGA provides that “ ‘aggrieved employee’ means any person who was employed by the alleged violator and against whom one or more of the alleged violations was committed.”
In such actions, an aggrieved employee files an action on behalf of the state seeking civil penalties, with the plaintiff and other aggrieved employees taking a share of moneys paid.
Collins’s Opinion
In her opinion affirming Freeman, Collins wrote:
“The legislative history makes clear that the PAGA was not intended to allow an action to be prosecuted by any person who did not have a grievance against his or her employer for Labor Code violations. Here, Kim initially asserted that he had been harmed by Reins’s alleged violations of the Labor Code. But by accepting the settlement and dismissing his individual claims against Reins with prejudice, Kim essentially acknowledged that he no longer maintained any viable Labor Code-based claims against Reins. As a result, following the dismissal with prejudice Kim no longer met the definition of ‘aggrieved employee’ under PAGA. Kim therefore did not have standing to maintain a PAGA action against Reins, and Reins’s motion to dismiss was properly granted.
Appellate Briefs
In its brief, Reins acknowledged:
“Kim’s voluntary dismissal of his Labor Code claims with prejudice impacts his PAGA standing only. It does not affect other employees.”
Kim’s opening brief made virtually the same point.
Collins Agrees
Collins agreed, proclaiming that “Kim’s dismissal affects only Kim’s standing as PAGA representative—it does not reflect on the veracity of the PAGA allegations asserted in Kim’s complaint, nor the ability of any aggrieved employee in a position substantially similar to Kim’s to assert such PAGA claims.”
The case is Kim v. Reins International California, Inc., B278642.
Eric B. Kingsley, Ari J. Stiller and Lyubov Lerner of Kingsley & Kingsley represented Kim. Spencer C. Skeen, Tim L. Johnson, Jesse C. Ferrantella and Jonathan H. Liu of Ogletree, Deakins, Nash, Smoak & Stewart acted for Reins.
Copyright 2018, Metropolitan News Company