©2024 Seyfarth Shaw LLP www.seyfarth.com 2024 Cal-Peculiarities | 123 Employers face threat of permissive intervention in settling overlapping PAGA claims. In 2023, the Court of Appeal in Accurso v. In-N-Out Burgers overturned a trial court’s denial of an initial PAGA plaintiff’s intervention as a matter of right in a later-filed overlapping PAGA case.452 The first plaintiff sought to join imminent settlement and to stay a later-filed case under the doctrine of exclusive concurrent jurisdiction. The Court of Appeal reversed, finding the lower court had not considered whether permissive intervention was appropriate, reasoning there was no reason not to give an overlapping PAGA plaintiff a “seat at the table,” and “permissive intervention even before the settlement approval process begins may be a way to ensure” overlapping plaintiffs “are meaningfully involved in the settlement approval process.”453 This decision could make it more difficult to obtain approval of PAGA settlements and extinguish other overlapping PAGA claims. The manner in which PAGA actions are settled confirms their peculiar nature. This chart compares a PAGA settlement with a class action settlement involving the same underlying alleged Labor Code violations (in which a class is conditionally certified for purposes of settlement). PAGA Settlements Class Settlements One-step approval process Preliminary and final approval steps required Individuals cannot opt out All class members have a chance to opt out Only the LWDA can object Any class member can object PAGA judgments preclude duplicative PAGA claims Class members can bring PAGA claims No effect on individual Labor Code claims Class members are bound by the settlement 75% of net fund goes to LWDA, 25% to individuals All of net fund goes to class members 100% of settled civil penalties Settlement proceeds can be both wages and penalties Prior immunity to arbitration agreements. The California Supreme Court enhanced PAGA’s power in 2014, in Iskanian v. CLS Transportation Los Angeles,454 which found a PAGA exception from the general rule that classaction waivers in arbitration agreements are enforceable. Iskanian reasoned that a PAGA claim differs from a class action in that PAGA plaintiffs act as private attorneys general, on behalf of the State of California—an entity that never agreed to arbitrate with the employee.455 While federal district courts both before and after Iskanian reached the opposite conclusion,456 the Ninth Circuit in 2015 sided with Iskanian.457 And later U.S. Supreme Court authority, though reaffirming the broad scope of the FAA in striking down state laws hostile to arbitration, left intact the PAGA claim’s special immunity from enforceable arbitration agreements. (See § 5.2.4.) However, on June 15, 2022, the U.S. Supreme Court partially preempted the Iskanian decision in Viking River Cruises, Inc. v. Moriana by ruling that employers can enforce arbitration agreements under the FAA insofar as the agreements mandate arbitration of an employee’s individual PAGA claims. 458 Specifically, the Court held that PAGA claims can be divided into individual and non-individual, “representative” PAGA claims and that individual PAGA claims can be compelled to arbitration under the FAA. In such instances, where plaintiff’s individual PAGA claims are enforced in arbitration, it follows that the plaintiff no longer has statutory standing to maintain representative PAGA claims in court because “[u]nder PAGA’s standing requirement, a plaintiff can maintain nonindividual PAGA claims in an action only by virtue of also maintaining an individual claim in that action.”459 The U.S. Supreme Court clarified that a “wholesale waiver” of PAGA claims in an arbitration agreement is still invalid under Iskanian and is not preempted by the FAA.460
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