Employee Who Did Not Bring Individual Claim Could Pursue PAGA Action

Takeaway: California courts have consistently held that paring away the plaintiff’s individual claims, for one reason or another, does not deprive the plaintiff of standing to pursue representative claims under PAGA.

An employee could go forward with her complaint for civil penalties for violations of the California Labor Code’s Private Attorneys General Act (PAGA) on behalf of herself and 500 other current and former employees of her employer, even though she did not allege an individual claim in the action, a California appeals court ruled. The court reversed a trial court ruling that the employee lacked standing to bring a representative PAGA action on behalf of other employees.

In June 2022, the employee filed a complaint for civil penalties under PAGA against her employer. She alleged that she was not suing in her individual capacity but was proceeding under PAGA on behalf of the state of California “for all aggrieved employees, including herself.”

She claimed that the employer did not provide employees with required meal break periods and rest periods. She also claimed that the employer provided inaccurate wage statements, made untimely wage payments and failed to pay wages at termination. She stated that she was bringing the action in a “purely representative capacity.”

The trial court dismissed the complaint, ruling that because the employee had not filed an individual action seeking PAGA relief for herself, she lacked standing to pursue a nonindividual or representative PAGA action on behalf of other employees. The employee appealed.

Standing to Bring a Representative PAGA Action

The court first noted that California’s Labor Code contains a complex scheme for timely compensation of workers, deterrence of abusive employer practices and enforcement of wage judgments.

Because of underenforcement of many Labor Code provisions and a shortage of government resources to pursue enforcement, the legislature enacted PAGA to create new civil penalties for Labor Code violations and to allow aggrieved employees to act as private attorneys general to recover those penalties, the court explained. 

As a remedial statute intended to protect employees from employer misconduct, PAGA provisions must be interpreted broadly to protect employees, according to the court. 

Class or representative PAGA actions play an important function in enforcing the Labor Code by permitting employees a relatively inexpensive way to resolve their disputes about allegedly unlawful employer conduct, the court noted.

An employee who brings a PAGA action to recover civil penalties acts as the proxy or agent of the state, the court said, noting that PAGA is designed primarily to benefit the general public, not the party bringing the action. PAGA default civil penalties are intended to deter violations, rather than compensate employees for actual losses incurred.

The statutory goal is furthered by extending broad standing to aggrieved employees that does not depend on the viability or strength of a plaintiff’s individual PAGA claim, the court said. In fact, the inability of an employee to pursue an individual PAGA claim does not prevent that employee from filing a representative PAGA action.

These policies that allow employees the freedom to bring representative PAGA actions to challenge unfair employer policies had not been questioned until 2022, when the U.S. Supreme Court made some observations about PAGA standing that conflicted with what the California Legislature intended, the court said.  

In Viking River Cruises v. Moriana (2022), the U.S. Supreme Court wrote, “Under PAGA’s standing requirement, a plaintiff can maintain nonindividual PAGA claims in an action only by virtue of also maintaining an individual claim in that action. When an employee’s own dispute is pared away from a PAGA action, the employee is no different from a member of the general public, and PAGA does not allow such persons to maintain suit.”

In relying on this language, the trial court in this case struck the employee’s representative PAGA action, the appeals court noted. However, in so doing, the trial court erred, the appellate court said.

In Adolph v. Uber Technologies, Inc. (2023), the California Supreme Court held that Viking River was incorrect on PAGA standing and its decision on that issue could not be followed by California courts. The court wrote, that, because the highest court of each state remains the final arbiter of what is state law, California courts are not bound by the U.S. Supreme Court’s interpretation of California law.

The Adolph court concluded that the Viking River requirement of having to file an individual PAGA cause of action to have standing to file a representative PAGA suit was incorrect. There are only two requirements for PAGA standing, the court said. The plaintiff must allege that they are: 1) someone who was employed by the alleged violator and 2) someone against whom one or more of the alleged violations was committed.

The employee here met the standing requirement, the court said.

The court reversed the trial court decision, ruling that the employee could go forward with her action.

Balderas v. Fresh Start Harvesting, Calif. Ct. App., No. B326759 (March 20, 2024).

Joanne Deschenaux, J.D., is a freelance writer in Annapolis, Md.