126 | 2025 Cal-Peculiarities ©2025 Seyfarth Shaw LLP www.seyfarth.com penalties, the employer’s attempts to comply with the law, the uncertainty of the law, and the employer’s ability to pay.454 Court approval of settlements. The 2004 amendment also required the court to “review and approve any settlement” of a PAGA action, regardless of whether the settlement includes an award of penalties.455 Further, a copy of a proposed settlement must be provided to the LWDA when it is submitted to the court.456 Courts have approved PAGA settlements involving payments to the LWDA of less than 0.1% of a common settlement fund.457 But one federal district court rejected a $100 million class action settlement because it allocated only 1%— $1,000,000—to PAGA penalties.458 Exemption for notice, posting, and filing violations. The 2004 amendment also mandated that employees cannot maintain PAGA lawsuits for petty violations such as failures to post notices or file notices, although this exemption does not cover “mandatory payroll or workplace injury reporting.”459 Repeal of job-application provision. The 2004 amendment also no longer required employers to (as was once required by former Labor Code section 431) file a copy of their job application forms with the DLSE. The legislature thus removed the basis for what would have been a particularly annoying “gotcha” PAGA lawsuit. Exemption for unionized construction employers. Legislation effective in 2019 created a PAGA exemption for construction employers whose employees are covered by a collective bargaining agreement.460 Exemption for some unionized janitorial employers. Legislation effective in 2022 created a PAGA exemption for some janitorial employers whose employees are covered by a collective bargaining agreement.461 5.15.4 Further PAGA peculiarities Employees settling individual Labor Code claims can still pursue PAGA claims for themselves and other aggrieved employees for the same violations. One Court of Appeal decision upheld the dismissal of a PAGA claim when a Labor Code plaintiff, whose individual claims had been directed to arbitration, settled his individual claims and then sought to resume his PAGA claim that had been stayed in court pending the arbitration.462 The Court of Appeal held that the plaintiff, upon settling his individual claims, was no longer an “aggrieved employee” and thus lacked standing to pursue a PAGA claim.463 The California Supreme Court upset this sensible result by granting review of the case464 and then unanimously ruling for the plaintiff. The Supreme Court, focusing on the literal language of PAGA, reasoned that an “aggrieved employee” eligible to pursue a PAGA claim is anyone who has suffered a relevant Labor Code violation, and that a PAGA plaintiff remains “aggrieved” even if he has received individual relief for the violation.465 PAGA settlements resolve PAGA claims of other aggrieved employees, but only if the PAGA notice supports a conclusion that claims of other aggrieved employees are covered. The Court of Appeal so held in a case where a truck driver who was bringing a PAGA action against his employer for denying rest and meal breaks learned that another employee bringing a PAGA action and a class action on those claims was settling those claims. Although the truck driver opted out of the proposed class settlement, he could not opt out of the PAGA action and so the PAGA settlement and resulting judgment in the other employee’s case finally resolved all PAGA claims, including the truck driver’s. Although the truck driver sought to continue his own PAGA action beyond the period covered by the PAGA settlement, he lacked standing to do so because, by the time that period ended, he had not been employed by the employer for well more than a year.466 In 2022 the Ninth Circuit similarly held that an aggrieved employee, who was not a party to the PAGA lawsuit, could not appeal a PAGA settlement. The Ninth Circuit noted: “There is no individual component to a PAGA action because every PAGA action is a representative action on behalf of the state [and] [p]laintiffs may bring a
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