August 14, 2020

California Court of Appeal Reins in PAGA Abuse – Addressing Serial PAGA Lawsuits and Standing for Former Employees

In Robinson v. Southern Counties Oil Co., 2020 WL 4696742 (certified for publication Cal. Ct. App. Aug. 13, 2020), the California Court of Appeal held that an action under the Private Attorneys General Act (“PAGA”), Cal. Labor Code § 2699, et seq. cannot be duplicated once another PAGA matter covering the same set of facts, the same employer, and during the same time frame is resolved, and claim preclusion deprives a former employee of standing to bring claims arising exclusively after he was employed.

Richard Robinson was a former truck driver for Southern Counties Oil Co. (“Southern Counties”) between February 2015 and June 2017. Robinson filed his lawsuit against Southern Counties in August 2018. His lawsuit contained PAGA claims only; he did not have any individual claims. The thrust of his lawsuit was that Southern Counties did not provide him with adequate meal and rest breaks. In February 2019, a judge in the San Diego County Superior Court approved a class action and PAGA settlement in Gutierrez v. Southern Counties Oil Co., Case No. 37-2017-00040850-CU-OE-CTL. The Gutierrez settlement covered all the claims brought in Robinson between March 2013 and January 2018. Robinson and three other employees opted out of the Gutierrez settlement. In a First Amended Complaint, Robinson purported to represent the three opt-outs from Gutierrez and all Southern Counties employees after January 2018. The Contra Costa County Superior Court sustained Southern Counties’ demurrer to Robinson’s First Amended Complaint, concluding that claim preclusion applied to Robinson’s PAGA-only lawsuit based on the PAGA settlement in Gutierrez.

In affirming the trial court, the Court of Appeal made two key holdings. First, it held that claim preclusion prevented Robinson from pursuing a PAGA-only suit against Southern Counties on behalf of the three other employees who opted out of Gutierrez. The court recognized that the government is always the real party for a PAGA claim, and “there is no mechanism for opting out of the judgment entered on the PAGA claim.” Non-parties and the government are always bound by a judgment brought under PAGA. Because Gutierrez resolved the state’s interest against Southern Counties for certain wage-and-hour violations between March 2013 and January 2018, Robinson could not represent the state in another PAGA action, based on the same claims, against Southern Counties covering that same period.

Second, the court held that Robinson could not represent employees following the close of the Gutierrez settlement period—i.e. after January 2018. Robinson stopped working for Southern Counties in June 2017. Therefore, Robinson did not have standing to serve as a PAGA representative after January 2018. The court explained that to serve as a PAGA representative, one must be an “aggrieved employee.” However, one cannot be an “aggrieved employee” if he or she was not affected by the conduct raised in the complaint. Because Robinson was not affected by Southern Counties’ post-January 2018 conduct, he was not an “aggrieved employee” under PAGA and did not have standing to pursue those claims. The court noted that a “change in facts or law can deprive a plaintiff of standing.” Here, claim preclusion deprives Robinson of standing to assert new claims arising after he was employed. 

What This Means for Employers

Robinson will have a significant impact on PAGA litigation. Companies facing serial PAGA claims from different employees covering the same period and same claims may now attack the later-filed claim head-on on claim preclusion grounds. Robinson clarified that former employees cannot serve as  PAGA representatives if their claims arose exclusively after their employment ended with the company, and will be precluded from doing so if there is an intervening judgment in a PAGA action.

Payne & Fears represented Southern Counties in this case. See, Payne & Fears Secures Victory for Client – Court Rejects Common PAGA Abuses for more information.

Contact Payne & Fears LLP if you have any questions about this opinion or PAGA.