On March 12, 2020, the California Supreme Court ruled in Kim v. Reins International California, Inc., (2020) 9 Cal. 5th 73, that an employee’s settlement of their individual labor claims does not extinguish their PAGA standing as an “aggrieved employee.”
PAGA claims permit an “aggrieved employee” to sue for civil penalties as “the proxy or agent of the state’s labor law enforcement agencies.” An employee qualifies as aggrieved if they are someone who was “employed by the alleged violator and against whom one or more of the alleged violation was committed.” Cal Labor Code § 2699, subd. (c).
In analyzing the standing requirements of PAGA the Court explicitly rejected an interpretation of “‘aggrieved’ as synonymous with having an unredressed injury.” PAGA standing is linked to the wrongdoer’s violation, not the representative’s injury. As such, an employee obtains PAGA standing once one or more violations are committed against them and settlement cannot nullify the violation or the employee’s standing.
The Court also examined the statutory purpose and context of PAGA. PAGA was enacted to “augment the limited enforcement capability of the [LWDA] by empowering employees to enforce the Labor Code.” An “injury-based view” would impose an unnecessary hurdle not required by the plain language of PAGA and undermine the legislative purpose of promoting code enforcement. Further, it could allow employers to reduce liability by settling individual claims and evade PAGA penalties. Therefore, standing for PAGA cases is not dependent on the maintenance of an individual claim.