Comparing the Uber Lawsuit to Previous Cases: Does It Hold Up?

A.

“In construing a statute, our task is to ascertain the intent of the Legislature so as to effectuate the purpose of the enactment.” (Cummins, Inc. v. Superior Court (2005) 36 Cal.4th 478, 487.) We look first to “the words of the statute, which are the most reliable indications of the Legislature’s intent.” (Ibid.) As noted, section 2699, subdivision (c) defines “aggrieved employee,” and we have explained that “[t]he plain language of section 2699(c) has only two requirements for PAGA standing.” (Kim, supra, 9 Cal.5th at p. 83.) The plaintiff must allege that he or she is (1) “someone ‘who was employed by the alleged violator’ ” and (2) someone “ ‘against whom one or more of the alleged violations was committed.’ ” (Id. at pp. 83–84, quoting § 2699, subd. (c).)

In Kim, we declined to impose additional requirements not found in the statute. (Kim, supra, 9 Cal.5th at pp. 84–91.) The plaintiff, Kim, sued his employer, alleging individual claims for damages and a PAGA claim for civil penalties. (Kim, at p. 82.) Kim settled and dismissed the individual claims for damages, proceeding only with the PAGA claim. (Kim, at p. 82.) The employer conceded that Kim had PAGA standing when he filed suit but argued that Kim’s “standing somehow ended” once his individual claims settled. (Kim, at p. 84.) According to the employer, PAGA standing is premised on an unredressed injury, and because Kim received compensation for his injury, he no longer had the status of an “aggrieved employee.” (Kim, at p. 84.)

We rejected this argument, finding it inconsistent with the statutory language in several respects. (Kim, supra, 9 Cal.5th at pp. 83–86.) First, “[t]he Legislature defined PAGA standing in terms of violations . . . . Kim became an aggrieved employee, and had PAGA standing, when one or more Labor Code violations were committed against him,” and “[s]ettlement did not nullify these violations. The remedy for a Labor Code violation, through settlement or other means, is distinct from the fact of the violation itself,” and only the latter is required for PAGA standing. (Kim, at p. 84.) Second, nothing in the text of the statute requires the plaintiff to have an unredressed injury; reading such a requirement into the statute would be “at odds with the statutory definition.” (Id. at p. 85.) Third, allowing post-violation events to strip an aggrieved employee of the ability to pursue a PAGA claim “would add an expiration element to the statutory definition of standing.” (Kim, at p. 85.) Although Uber says Kim is distinguishable because the plaintiff had settled only individual claims for damages and not any claim for civil penalties under PAGA, this circumstance played no role in Kim’s reasoning. Kim made clear that only the fact of a violation is required to confer standing.

The Court of Appeal in Johnson v. Maxim Healthcare Services, Inc. (2021) 66 Cal.App.5th 924 (Johnson) similarly declined to read into the statute a standing requirement not supported by its language. There, a company required its workers to sign unlawful noncompete agreements. (Id. at p. 927.) The Labor Code violations sustained by the plaintiff were time-barred, and the employer argued that the plaintiff therefore did not have PAGA standing. (Johnson, at p. 929.) Relying on Kim, the court rejected this argument and held that the plaintiff had standing to pursue her PAGA claim because she satisfied the statutory definition of an “ ‘aggrieved employee.’ ” (Johnson, at p. 930.) The fact that the plaintiff’s “individual claim may be time-barred does not nullify the alleged Labor Code violations nor strip [the plaintiff] of her standing to pursue PAGA remedies.” (Johnson, at p. 930.)

As Kim and Johnson make clear, a worker becomes an “aggrieved employee” with standing to litigate claims on behalf of fellow employees upon sustaining a Labor Code violation committed by his or her employer. (See Kim, supra, 9 Cal.5th at pp. 84–85; Johnson, supra, 66 Cal.App.5th at p. 930; § 2699, subd. (c).) Standing under PAGA is not affected by enforcement of an agreement to adjudicate a plaintiff’s individual claim in another forum. Arbitrating a PAGA plaintiff’s individual claim does not nullify the fact of the violation or extinguish the plaintiff’s status as an aggrieved employee, any more than the time-barring of remedies did in Johnson or the settlement of the individual damages claims did in Kim. (See Kim, at pp. 84–85; Johnson, at p. 930.) The operative complaint alleges that Adolph experienced Labor Code violations while driving for Uber. Under Kim, Adolph’s allegations that Labor Code violations were committed against him while he was employed by Uber suffice to confer standing to bring a PAGA action.