Today, the California Supreme Court issued its long-awaited opinion in Kim v. Reins Int’l Cal., Inc., holding that an employee’s settlement and dismissal of underlying Labor Code claims does not deprive the individual of the ability to later assert a representative action under the Labor Code Private Attorneys General Act (“PAGA”)—even if it involves the same underlying conduct.

First enacted in 2004, the oft-maligned Labor Code “bounty hunter” law permits so-called “aggrieved employees” to file non-class, representative actions to recover civil penalties for Labor Code violations that previously were only recoverable by the California Labor Commissioner.  As the Reins opinion notes, when it enacted PAGA, the Legislature intended to provide an alternative mechanism for enforcement of the State’s wage and hour laws in light of limited government resources.  Yet, despite the Legislature’s apparent good intentions, over the years, PAGA has engendered mounting criticism for spawning thousands of costly and frivolous lawsuits—often, for technical violations that involve little or no actual injury to any current or former employees.  Further, since 75% of any recovery goes to the State of California—not the allegedly “aggrieved employees”—the  primary beneficiaries of the law have been plaintiffs’ lawyers, whose attorneys’ fees can and often do dwarf the amounts received by their clients.

In Reins, the plaintiff filed a class action, seeking unpaid wages and statutory penalties (e.g., for missed meal and rest breaks, etc.); he also included a PAGA claim in his complaint.  The employer successfully moved to compel the non-PAGA claims to arbitration (PAGA claims are, says the Supreme Court, immune from arbitration), resulting in the court staying the PAGA claims pending resolution of the arbitration proceeding.  Thereafter, the parties settled the case, resulting in a dismissal of the employee’s individual claims.  The trial court later granted the employer’s motion for summary adjudication of the plaintiff’s remaining PAGA claim, reasoning that he lacked standing to continue to prosecute the PAGA claim in light of the earlier settlement and dismissal of his underlying Labor Code claims.  The Court of Appeal agreed; the California Supreme Court, however, did not.  Noting that PAGA’s definition of an “aggrieved employee” encompasses employees who already have been otherwise compensated for their purported injury, the Court focused on PAGA’s enforcement purpose.

The real winners here are the plaintiffs’ lawyers who will be further emboldened in bringing often frivolous PAGA suits—even in situations where the allegedly “aggrieved employees” already have been made whole.  The decision is likely to result in even more lawyers searching for “aggrieved” parties where none exist in order to extricate costly settlements from unsuspecting employers who thought an earlier settlement and release provided finality.

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Photo of Tony Oncidi Tony Oncidi

Anthony J. Oncidi is the co-chair of the Labor & Employment Law Department and heads the West Coast Labor & Employment group in the firm’s Los Angeles office.

Tony represents employers and management in all aspects of labor relations and employment law, including…

Anthony J. Oncidi is the co-chair of the Labor & Employment Law Department and heads the West Coast Labor & Employment group in the firm’s Los Angeles office.

Tony represents employers and management in all aspects of labor relations and employment law, including litigation and preventive counseling, wage and hour matters, including class actions, wrongful termination, employee discipline, Title VII and the California Fair Employment and Housing Act, executive employment contract disputes, sexual harassment training and investigations, workplace violence, drug testing and privacy issues, Sarbanes-Oxley claims and employee raiding and trade secret protection. A substantial portion of Tony’s practice involves the defense of employers in large class actions, employment discrimination, harassment and wrongful termination litigation in state and federal court as well as arbitration proceedings, including FINRA matters.

Tony is recognized as a leading lawyer by such highly respected publications and organizations as the Los Angeles Daily JournalThe Hollywood Reporter, and Chambers USA, which gives him the highest possible rating (“Band 1”) for Labor & Employment.  According to Chambers USA, clients say Tony is “brilliant at what he does… He is even keeled, has a high emotional IQ, is a great legal writer and orator, and never gives up.” Other clients report:  “Tony has an outstanding reputation” and he is “smart, cost effective and appropriately aggressive.” Tony is hailed as “outstanding,” particularly for his “ability to merge top-shelf lawyerly advice with pragmatic business acumen.” He is highly respected in the industry, with other commentators lauding him as a “phenomenal strategist” and “one of the top employment litigators in the country.”

“Tony is the author of the treatise titled Employment Discrimination Depositions (Juris Pub’g 2020; www.jurispub.com), co-author of Proskauer on Privacy (PLI 2020), and, since 1990, has been a regular columnist for the official publication of the Labor and Employment Law Section of the State Bar of California and the Los Angeles Daily Journal.

Tony has been a featured guest on Fox 11 News and CBS News in Los Angeles. He has been interviewed and quoted by leading national media outlets such as The National Law JournalBloomberg News, The New York Times, and Newsweek and Time magazines. Tony is a frequent speaker on employment law topics for large and small groups of employers and their counsel, including the Society for Human Resource Management (“SHRM”), PIHRA, the National CLE Conference, National Business Institute, the Employment Round Table of Southern California (Board Member), the Council on Education in Management, the Institute for Corporate Counsel, the State Bar of California, the California Continuing Education of the Bar Program and the Los Angeles and Beverly Hills Bar Associations. He has testified as an expert witness regarding wage and hour issues as well as the California Fair Employment and Housing Act and has served as a faculty member of the National Employment Law Institute. He has served as an arbitrator in an employment discrimination matter.

Tony is an appointed Hearing Examiner for the Los Angeles Police Commission Board of Rights and has served as an Adjunct Professor of Law and a guest lecturer at USC Law School and a guest lecturer at UCLA Law School.

Photo of Philippe A. Lebel Philippe A. Lebel

Philippe (Phil) A. Lebel represents employers in all aspects of employment litigation, including wage and hour, wrongful termination, discrimination, harassment, retaliation, defamation, trade secrets, and breach of contract litigation, in both the single-plaintiff and class- and/or representative-action context, at both the trial and…

Philippe (Phil) A. Lebel represents employers in all aspects of employment litigation, including wage and hour, wrongful termination, discrimination, harassment, retaliation, defamation, trade secrets, and breach of contract litigation, in both the single-plaintiff and class- and/or representative-action context, at both the trial and appellate level, and before administrative agencies.

In addition to his litigation work, Phil regularly advises clients regarding compliance with federal, state and local employment laws, and assists a variety of companies and financial firms in evaluating labor and employment issues in connection with corporate transactions. Phil also has experience assisting employers with sensitive employee investigations and trainings.  Phil also represents employers in connection with labor law matters, such as labor arbitrations and proceedings before the National Labor Relations Board.

Phil has assisted clients in a wide array of sectors including in the biotech, education, entertainment, financial services, fitness, healthcare, high-tech, legal services, manufacturing, media, professional services, sports, and staffing industries, among others.

Phil regularly speaks on emerging issues for employers and has been published or quoted in Law360, the Daily JournalThe Hollywood ReporterBusiness Insurance, and SHRM.org regarding a variety of labor and employment law topics.

During college, Phil worked on political campaigns in Atlanta, Georgia and Birmingham, Alabama, and was an intern with the National Gay and Lesbian Task Force and the Gay and Lesbian Victory Fund. Phil is a former member of the Board of Directors of the AIDS Legal Referral Panel.