Wage and Hour Case Notes

• Publication year: 2022
• Author: By Nicole R. Roysdon

WAGE AND HOUR CASE NOTES

By Nicole R. Roysdon

Nicole R. Roysdon is a Senior Associate at Wilson Turner Kosmo. She represents employers in all areas of employment law, specializing in wage and hour class and PAGA representative actions. She may be reached at nroysdon@wilsonturnerkosmo.com.

COMPETING PAGA PLAINTIFFS DO NOT HAVE STANDING TO CHALLENGE PARALLEL PAGA SETTLEMENT

Turrieta v. Lyft, Inc., 69 Cal. App. 5th 955 (2021)

Brandon Olson and Million Seifu, named plaintiffs in two separate Private Attorney General's Act (PAGA) representative actions against Lyft, Inc., moved to intervene and objected to a $15 million settlement reached between Lyft and Tina Turrieta, another named plaintiff in a third PAGA representative action. Olson and Seifu argued the settlement should not be approved because it resulted from a "reverse auction," the amount of civil penalties was too low, the amount of attorneys' fees was excessive, their counsel had been excluded from negotiations, and they were not given timely notice of the settlement. Olson and Seifu also argued they should be allowed to opt out of the settlement. The trial court approved the settlement and entered judgment over Olson's and Seifu's objections, finding they did not have standing to object and the settlement was fair, adequate, and reasonable. Olson and Seifu thereafter moved to vacate the judgment, which the trial court denied for the same reasons.

On appeal, Olson and Seifu argued the trial court erred. The Second District Court of Appeal disagreed. The Court held Olson and Seifu lacked standing to vacate the judgment in Turrieta and did not satisfy the standard for intervention. Relying on established principles underlying the purpose and intent of PAGA, the Court explained that although Olson and Seifu were acting as proxies of the State of California's Labor and Workforce Development Agency (LWDA) in bringing PAGA actions against Lyft, the State was the real party in interest. As a result, the right to challenge a parallel PAGA settlement belongs to the State. Thus, the Court found no authority permitting PAGA plaintiffs in another case to act on the State's behalf for this purpose. The Court found significant the fact that a PAGA plaintiff must provide notice of a proposed settlement to the LWDA. However, here, the LWDA did not object to the settlement at the time the trial court was considering Turrieta's motion to approve the settlement.

Further, because civil penalties recovered on behalf of the State under PAGA are intended to punish and deter Labor Code violations, not compensate employees' injuries, Olson and Seifu did not have any direct financial interest in the Turrieta settlement. Similarly, the Court pointed out that the Turrieta settlement was only binding on the State's ability to seek civil penalties for the same Labor Code violations and did not foreclose Olson and Seifu from bringing their own personal claims against Lyft. Consequently, there was no requirement to provide notice to Olson and Seifu of the Turrieta settlement or allow them to opt out.

INTERVENOR HAS STANDING TO CHALLENGE PAGA COMPONENT OF CLASS SETTLEMENT, WHERE UNDERLYING PAGA NOTICE IS DEFECTIVE

Uribe v. Crown Building Maintenance Co., 69 Cal. App. 5th 913 (2021)

In another case involving intervention in a PAGA settlement, the Fourth District Court of Appeal held a named plaintiff in a competing class and PAGA representative action had standing to challenge the PAGA component of the settlement. Intervenor Isabel Garibay had asserted a Cal. Lab. Code § 2802 claim for unreimbursed cell phone expenses on behalf of a putative class of employees working for Crown Building Maintenance Company, together with a representative cause of action under PAGA. Subsequently, Josue Uribe filed a lawsuit asserting individual claims for unreimbursed uniform expenses under Cal. Lab. Code § 2802, as well as a PAGA claim based on the same facts. Uribe then reached a settlement with Crown, which entailed amending his complaint to assert class claims

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and including unreimbursed cell phone expenses as a factual basis for the alleged Labor Code and PAGA claims.

Garibay moved to intervene, which the trial court permitted, but opted out of the class settlement and did not object. After ordering supplemental briefing and the filing of revised settlement agreements with narrower releases, the trial court granted preliminary and...