Seyfarth Shaw LLP | www.seyfarth.com Litigating CA Wage & Hour Class and PAGA Actions (23rd Edition) 111 The Court of Appeal agreed with the employer’s reasoning.546 But the California Supreme Court came to a different conclusion. Reins held that a PAGA plaintiff can proceed even if his own individual injury has been resolved. The PAGA plaintiff maintains his “aggrieved” status and possesses standing to sue as long as he has allegedly suffered a Labor Code violation.547 Thus, settling a claim for such a violation on an individual basis does not remove the plaintiff’s “aggrieved” status.548 After Reins, settlements with employee-plaintiffs will likely not preclude the employee from bringing an action for civil penalties as a PAGA plaintiff.549 Thus, obtaining individual releases from employees, through severance agreements or otherwise, may not preclude employees from then bringing PAGA claims, even if those claims are expressly included in the release (unless, of course, the employee has released claims while acting in the capacity of a PAGA plaintiff, and the trial court has granted approval of the settlement).550 Following the decision in Reins, the Fourth District Court of Appeal “question[ed] whether Villacres remains good law” based on the “Supreme Court’s repeated recognition that the real party in interest in a PAGA suit is the state, not the employee.”551 The Court further explained that “although the Legislature gave [the plaintiff] standing to assert a PAGA action…, she is not the real party in interest in that action” and “decline[d] to follow the holding in Villacres that claim preclusion bars an aggrieved employee's PAGA suit seeking civil penalties merely because the plaintiff was a member of the settlement class, or, as in the instant case, the only party to settlement, in a prior suit against the employer.”552 G. Wage Order Claims California’s Industrial Welfare Commission sets forth minimum work standards for California employees in Wage Orders. These Wage Orders contain a variety of provisions that employers must follow, including everything from overtime and minimum wage requirements to the timing of meal and rest breaks. The Wage Orders, however, also contain more obscure sections, with no corresponding Labor Code provision, regulating things such as the location of clocks and, in some cases, bathroom temperature. These obscure sections have inspired claims that their violation constituted a violation of California Labor Code section 1198,553 and therefore give rise to PAGA penalties. 546 Kim v. Reins Int'l California, Inc., 18 Cal. App. 5th 1052, 1056 (2017). 547 Kim v. Reins Int'l California, Inc., 9 Cal. 5th 73 (2020). 548 Id. 549 The Supreme Court in Reins distinguished Villacres on its facts, but otherwise did not overrule it. Id. at 92-93. It is therefore unclear whether Villacres remains good law and, if so, to what extent it can still be relied upon by employers seeking to argue that PAGA claims were released by a prior non-PAGA settlement. 550 It is notable that the plaintiff’s individual settlement in Reins expressly excluded a release of PAGA claims. Although the Supreme Court’s decision did not indicate that this was a determinative factor, it is possible that an individual settlement that specifically included a release of PAGA claims could be effective in releasing such claims. Also unresolved is whether a covenant not to sue, if included in an individual settlement agreement covering PAGA claims, would be effective in precluding the settling individual from maintaining a subsequent PAGA representative action, even if the individual technically still had standing as an “aggrieved employee” to bring such an action. 551 Howitson v. Evans Hotels, LLC, 81 Cal. App. 5th 475, 491 (2022). 552 Id. at 491–92. 553 Labor Code section 1198 states: The maximum hours of work and the standard conditions of labor fixed by the commission shall be the maximum hours of work and the standard conditions of labor for employees. The employment of
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