In a victory for California companies seeking to enforce settlements of Private Attorneys General Act claims the California Supreme Court’s August 2 decision in Turrieta v. Lyft, Inc. confirmed that individuals have no right to intervene in PAGA settlement approvals solely on the basis of having filed a similar PAGA notice. Intervenors in PAGA settlements had become common, a practice that created inefficiency in resolving claims and uncertainty among the parties about whether agreed-upon settlement terms would ultimately get court approval. As a result of the decision, companies seeking court approval of PAGA settlements will no longer face the prospect of other individuals intervening and seeking to undo the parties’ settlement.

PAGA is a unique California law that permits allegedly “aggrieved employees” to sue their employers for penalties “on behalf of” the state. Seventy-five percent of penalties recovered in a PAGA action are distributed to the state. The drivers in this case had all sent the required, separate notices to the appropriate California agency stating their intent to pursue PAGA claims against Lyft and filed separate actions in court seeking civil penalties for Lyft’s alleged failure to comply with California’s wage-and-hour requirements.

Ultimately, Lyft mediated with one of the drivers and was able to settle her claims via a mediator’s proposal. Upon learning of the settlement, the California agency did not take any action, but other drivers sought to intervene “on behalf of the state” as interested parties. The trial court denied their motions, and the court of appeals affirmed. The California Supreme Court affirmed, reasoning that PAGA only permits a plaintiff to step into the state’s shoes for purposes of commencing an action and not for broader purposes. In doing so, the court reaffirmed several important characteristics of PAGA actions: it is ultimately supposed to be a dispute between the employer and the state to recover penalties for the purposes of addressing present and future violations. It is not intended as a mechanism for employees to redress their own particular past grievances.

Note that the Supreme Court granted a limited appeal in this case, choosing to answer only one of many proposed issues and that the briefing and oral argument preceded the extensive PAGA amendments that went into effect last month. We anticipate that PAGA issues will remain hotly litigated in California.

If you have any questions about PAGA, contact Scopelitis Attorneys Jim Hanson, Andy Butcher, Chip Andrewscavage, and Alaina Hawley.