PAGA Standing Questions Already Being Answered (by the Court of Appeal)
Recent developments in the California Court of Appeal could impact pending or future Private Attorneys General Act (PAGA) litigation.
Though many employers anxiously await a decision in the pending California Supreme Court case, Adolph v. Uber Technologies Inc., regarding PAGA standing in the wake of the United States Supreme Court’s Viking River Cruises decision, the California Court of Appeal is not so patient. In just the last month, the Court of Appeal has released two opinions answering the exact question the state Supreme Court will address in Adolph: whether a plaintiff may maintain standing to pursue non-individual PAGA claims in court if their individual PAGA claim has been sent to arbitration. So far, the two published cases addressing the issue have both sided with plaintiffs. Not only do these decisions give insight into how the Supreme Court may eventually decide Adolph, they also bind the lower courts in the meantime.
On Feb. 3, 2023, the California Court of Appeal, Fifth Appellate District, released its decision in Galarsa v. Dolgen California LLC.
In Viking River, the United States Supreme Court suggested that a plaintiff whose individual PAGA claim has been compelled to arbitration would not retain standing under state law to pursue the non-individual PAGA claims in court.
The Galarsa court disagreed, holding that the plaintiff maintained standing to pursue a representative PAGA action even after her individual PAGA claim had been sent to arbitration.
In reaching its decision, the court emphasized that “a plaintiff’s PAGA standing does not evaporate when an employer chooses to enforce an arbitration agreement.” Because, as the court explained, PAGA standing is conferred “on all plaintiffs who were employed by the violator and subjected to at least one alleged violation,” it does not disappear even if the individual claim is sent to arbitration. If this were the case, the court determined, it would “severely curtail PAGA’s ability to police Labor Code violations.”
The court then addressed California’s general rule against “splitting” a cause of action. Finding that an individual PAGA claim and a representative PAGA claim seek to vindicate different “primary rights,” the court found that no singular cause of action was being split, so plaintiff could maintain both actions simultaneously. The end result was a ruling sending the plaintiff’s individual PAGA claim to arbitration and her representative, non-individual PAGA claims to state court.
On March 7, 2023, the California Court of Appeal, Fourth Appellate District, Division Three, handed down its decision in Piplack v. In-N-Out Burgers.
Like the Galarsa court, the Court of Appeal in Piplack found that PAGA standing only requires two things: (1) “someone who was employed by the alleged violator,” (2) “against whom one or more of the alleged violations was committed.” If a plaintiff satisfies these two requirements, they have standing to pursue representative, non-individual PAGA claims, regardless of what has happened to their individual PAGA claim. As the court sums it up, “[i]n short, paring away the plaintiff’s individual claims does not deprive the plaintiff of standing to pursue representative claims under PAGA, so long as the plaintiff was employed by the defendant and suffered one or more of the alleged violations.”
The Piplack court reached this decision even while recognizing that “the United States Supreme Court…came to the opposite conclusion.” But, because resolution of the case ultimately turned on state law, the court felt compelled to side with the prior decisions of the California Supreme Court addressing different issues of PAGA standing, resulting in a decision compelling the plaintiff’s individual PAGA claim to arbitration while keeping his representative PAGA action in court.
The most immediate implications from these two decisions are going to be felt in trial courts across the state, where this new authority is now binding—at least until competing authority arises or the Supreme Court decides Adolph. These two decisions also now function as persuasive authority on other appellate courts handling PAGA standing issues while Adolph remains undecided. More removed, these cases may also provide some insight on how the California Supreme Court could come out when it eventually does release its opinion. Until that time, employers should be aware of the continuing developments in the appellate courts and how it might impact pending or future PAGA litigation.