Can Employees Bring a Lawsuit When Another Identical Suit is Pending?

PAGA - Conflict of Interest

What happens when employees bring a suit under the Private Attorneys General Act of 2004 (PAGA) but admit their suit arises from the same facts and theories as another pending PAGA action?

What is the Doctrine of Exclusive Concurrent Jurisdiction?

Under this doctrine, when two or more courts have subject matter jurisdiction over a dispute, the court that first asserts jurisdiction assumes it to the exclusion of the others. The rule is based upon the public policies of avoiding conflicts that might arise between courts if they were free to make contradictory decisions or awards relating to the same controversy, along with preventing vexatious litigation and multiplicity of suits.

Where the exclusive concurrent jurisdiction rule applies, the second action should be stayed.

Background

The Petitioners in this action alleged PAGA-only claims. They argued that defendant Beverages & More! (BevMo) maintains a policy that requires the presence of two persons in any store while open. This policy regularly requires employees to go without their off-duty, uninterrupted meal and rest periods, or, alternatively, premium pay for noncompliant meal and rest periods. As a result of this policy, the Petitioners claimed that BevMo failed to do the following:

  • Pay overtime wages;
  • Provide off-duty meal periods;
  • Make available off-duty rest periods;
  • Pay all wages due upon termination;
  • Provide compliant wage statements; and
  • Maintain payroll records.

Petitioners gave notice to the Labor and Workforce Development Agency (LWDA) under PAGA in July 2020. They sought to represent aggrieved employees who’ve worked for BevMo at any time in the past one year prior to the filing of the PAGA Notice to the trial in this action.

A year before the Petitioners filed suit, Tatiana Paez filed a PAGA representative action against BevMo in Los Angeles County. She sued, in part, over the two-person policy. The claims in Paez that overlap with petitioners' claims are

  • Failure to pay overtime wages;
  • Failure to provide off-duty meal periods;
  • Failure to make available off-duty rest periods;
  • Failure to pay all wages due upon termination;
  • Failure to provide compliant wage statements; and
  • Failure to maintain payroll records.

Paez also includes claims for the following:

  • Failure to pay minimum wage;
  • Failure to pay wages during employment;
  • Failure to pay costs of medical or physical examination;
  • Failure to provide suitable seating;
  • Failure to reimburse necessary business expenses; and
  • Failure to provide safety devices and safeguards.

Paez brought an action on her behalf and on behalf of current and former aggrieved employees who worked for BevMo in California as non-exempt employees and who received at least one wage statement at any time from one year prior to June 25, 2019, until judgment.

Here, the Petitioners asked the court to coordinate their action with the Los Angeles PAGA (Paez) suit, and the trial court in this case stayed their suit. After their petition for coordination was denied, the trial court denied their motion to lift the stay. The trial court ruled that the stay was warranted under the doctrine of exclusive concurrent jurisdiction. The Petitioners appealed.

What is a PAGA Action?

Tracie L. Brown and the California Court of Appeals were asked to determine whether the trial court erred in applying the doctrine of exclusive concurrent jurisdiction to this PAGA representative suit.

Under PAGA, an aggrieved employee may bring a civil action personally and on behalf of other current or former employees to recover civil penalties for Labor Code violations. Of the civil penalties recovered, 75% goes to the State's labor law enforcement agencies (LWDA), and the remaining 25% to the aggrieved employees.

Judge Brown explained that before bringing a civil action for statutory penalties, an employee must comply with state statute. The law requires the employee to give written notice of the alleged Labor Code violation to both the employer and the LWDA. That notice must describe facts and theories supporting the violation. If the agency notifies the employee and the employer that it doesn’t intend to investigate, or if the agency fails to respond within [the requisite time], the employee may then bring a civil action against the employer. If the agency elects not to investigate, or investigates without issuing a citation, the aggrieved employee may then bring a PAGA action.

A PAGA claim “is a dispute between an employer and the state, which alleges directly or through its agents—either the Agency or aggrieved employees—that the employer has violated the Labor Code. The California Supreme Court has made clear that:

  • An action to recover civil penalties under PAGA is fundamentally a law enforcement action designed to protect the public and not to benefit private parties;
  • In a lawsuit brought under PAGA, the employee plaintiff represents the same legal right and interest as state labor law enforcement agencies; and
  • An aggrieved employee's action under PAGA functions as a substitute for an action brought by the government itself.

The Court Says Trial Did Not Err in Applying the Exclusive Concurrent Jurisdiction Rule

Judge Brown found that the Petitioners argued that PAGA doesn’t include a statutory first-to-file rule; as a result, the trial court couldn’t apply the exclusive concurrent jurisdiction doctrine to their PAGA representative suit. The Court of Appeals held that the absence of an express first-to-file rule in PAGA doesn’t mean that the common law doctrine can’t be applied in PAGA representative suits, and the Court found no statutory language or the canon of statutory interpretation that held contrary.

The Court agreed with petitioners that the statutory language is silent about whether an aggrieved employee may bring a PAGA action when another aggrieved employee brings a PAGA suit against the employer based on the same facts and violations. However, to depart from or abrogate common law rules, the statutory language must clearly and unequivocally disclose an intention to do so. Also, PAGA's purpose similarly doesn’t state a clear intent to abrogate the exclusive concurrent jurisdiction rule.

The Petitioners’ petition to lift the stay was denied. Shaw v. Superior Court (Court of Appeal of California, First Appellate District, 5/3/2022).

Bottom Line

The trial court didn’t err in staying a suit under the Private Attorneys General Act of 2004 (PAGA) that arose from the same facts and theories as another pending PAGA action, and in denying a motion to lift the stay after judicial coordination had been denied.

The language of PAGA didn’t state clear and unequivocal legislative intent to repeal the common-law doctrine of exclusive concurrent jurisdiction, nor did application of the exclusive concurrent jurisdiction rule diminish the purposes for which PAGA was enacted.

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