On August 1, 2024, the California Supreme Court delivered a crucial ruling in Turrieta v. Lyft, Inc., addressing whether a party can intervene in another party’s ongoing Private Attorneys General Act (PAGA) action that involves overlapping claims. The court, in a decision authored by Justice Martin J. Jenkins, held that such intervention is inconsistent with the legislative intent of PAGA. This decision provides important guidance for both employers and plaintiffs involved in PAGA litigation.
For additional information regarding PAGA and to find out how this could impact your business, please contact our Managing Partner, Richard Liu, at richard.liu@consultils.com.
PAGA Overview
The Private Attorneys General Act (PAGA) is a California statute that allows employees to file lawsuits against employers for labor code violations on behalf of themselves, other employees, and the state. Under PAGA, an aggrieved employee acts as a representative of the state, which is considered the real party in interest. PAGA enables employees to seek civil penalties for violations, with a portion of the penalties going to the state’s Labor and Workforce Development Agency (LWDA) and the remainder to the affected employees.
On July 1, 2024, California Governor Gavin Newsom signed SB 92 and AB 2288 into law, significantly reforming PAGA. These reforms, while maintaining PAGA as a frequent source of litigation for California employers, aim to reduce employers’ exposure and encourage proactive compliance with labor laws. For a detailed analysis of these reforms, please refer to our previous article: PAGA Reforms Provide Relief for Employers: Essential Updates for California Businesses.
Case Background
The Turrieta v. Lyft, Inc. case originated in 2018 when three rideshare drivers—Tina Turrieta, Brandon Olson, and Million Seifu—each filed separate PAGA actions against Lyft. The central issue in these cases was the alleged misclassification of the drivers as independent contractors rather than employees, a significant legal question in California’s gig economy.
In 2019, Turrieta reached a settlement with Lyft, which included financial penalties to be paid to the LWDA, as required under PAGA. Olson and Seifu, whose claims against Lyft were still pending, sought to intervene in Turrieta’s action, arguing that their overlapping claims entitled them to challenge the settlement. The trial court denied their motions to intervene, and this denial was affirmed by the Court of Appeal.
Supreme Court's Ruling
The California Supreme Court upheld the lower courts’ decisions, concluding that PAGA does not provide plaintiffs with the right to intervene in another plaintiff’s ongoing action, even when the claims overlap. The court’s reasoning was grounded in the intent and structure of PAGA, which deputizes individual employees to act as agents of the state in enforcing labor laws.
Justice Jenkins emphasized that allowing intervention could complicate the litigation process by introducing conflicts over who controls the litigation, how settlements are negotiated, and how attorneys’ fees are allocated. The court noted that the legislative framework of PAGA does not explicitly provide for intervention, suggesting that the current system, which involves oversight by the courts and the LWDA, is adequate to ensure fair outcomes.
Implications for Employers
The ruling in Turrieta v. Lyft, Inc. has several key implications:
Finality of Settlements: Employers can have greater confidence that once a PAGA settlement is approved, it is less likely to be disrupted by other plaintiffs with similar claims. This could encourage more timely and efficient resolutions of PAGA disputes.
Legislative Intent and Judicial Oversight: The decision reinforces the role of judicial oversight and the LWDA in PAGA cases, ensuring that settlements are fair and consistent with the law’s objectives without the complications that could arise from multiple intervening parties.
Potential for Legislative Change: While the court’s ruling is clear, it leaves open the possibility that the California Legislature could amend PAGA to address issues related to intervention and overlapping claims. Companies should stay vigilant for any legislative developments that could impact the handling of PAGA cases in the future.
Conclusion
The California Supreme Court’s decision in Turrieta v. Lyft, Inc. provides critical clarity on the limitations of intervention in PAGA actions, helping to streamline the litigation process and reinforce the current legislative framework. For employers, this ruling offers a clearer path to resolving PAGA claims, while plaintiffs must carefully consider their legal strategies in light of these limitations. As PAGA continues to evolve as a legal tool, staying informed and seeking experienced counsel will be essential for effectively navigating this complex area of employment law.
For additional information regarding PAGA and to find out how this could impact your business, please contact our Managing Partner, Richard Liu, at richard.liu@consultils.com.
Richard Liu, Esq. is the Managing Counsel of ILS. He serves clients as a management-side defense lawyer specializing in employment and business litigation. Richard is also an expert on litigation prevention and compliance. He regularly advises Fortune 500 companies and startups on employment, labor, and commercial matters.
Email: richard.liu@consultils.com | Phone: 626-344-8949
*Disclaimer: This article does not constitute legal opinion and does not create any attorney-client relationship.
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