GINA JOHNSON, Plaintiff and Appellant, v. MAXIM HEALTHCARE SERVICES, INC., Defendant and Respondent.
D077599
COURT OF APPEAL, FOURTH APPELLATE DISTRICT DIVISION ONE STATE OF CALIFORNIA
Filed 7/21/21
CERTIFIED FOR PUBLICATION; (Super. Ct. No. 37-2019-00047448-CU-OE-CTL)
APPEAL from a judgment of the Superior Court of San Diego County, Gregory W. Pollack, Judge. Reversed.
Mashiri Law Firm, Alex Asil Mashiri; The Jami Law Firm and Tamim Jami, for Plaintiff and Appellant.
Morgan, Lewis & Bockius, John S. Battenfeld and Alexander L. Grodan, for
Gina Johnson filed a lawsuit against her employer, Maxim Healthcare Services, Inc. (Maxim), under the Private Attorney General Act of 2004 (PAGA) (
Maxim is a national healthcare staffing company and provides temporary staffing and healthcare services to its clients. Maxim hired Johnson as an hourly, nonexempt employee in 2016. On September 7, 2016, Johnson signed a document entitled “Non-Solicitation, Non-Disclosure and Non-Competition Agreement” (Agreement).
On June 19, 2019, Johnson sent notice to the California Labor and Workforce Development Agency (Agency) that her execution of the Agreement violated
Maxim demurred to the complaint, arguing that Johnson’s individual claim was time-barred because she signed the Agreement three years before she filed suit. Johnson opposed the demurrer, contending she had standing to bring a claim under PAGA because she was an aggrieved employee and had exhausted the necessary administrative remedies. Further, she maintained that the representative claims were not time-barred because, under PAGA, Maxim was subject to penalties for any of its employees who signed the Agreement during the applicable period. Finally, as a current Maxim employee who signed the Agreement, Johnson argued that she continued to suffer under the violation committed by Maxim.
After considering the papers and entertaining oral argument, the superior court sustained the demurrer without leave to amend. The court determined that Johnson’s individual claim was time-barred, and, as such, she could not pursue a PAGA claim in a representative capacity.
DISCUSSION
We review the superior court’s order sustaining the demurrer, including any standing determination, de novo. (Martin v. Bridgeport Community Assn., Inc. (2009) 173 Cal.App.4th 1024, 1031.)
“In September 2003, the Legislature enacted [PAGA] (
A PAGA claim is legally and conceptually different from an employee’s own suit for damages and statutory penalties. An employee suing under PAGA “does so as the proxy or agent of the state’s labor law enforcement agencies.” (Arias, supra, 46 Cal.4th at p. 986.) Every PAGA claim is “a dispute between an employer and the state.” (Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 384, 386 (Iskanian); Arias, at p. 986.) Moreover, the civil penalties a PAGA plaintiff may recover on the state’s behalf are distinct from the statutory damages or penalties that may be available to employees suing for individual violations. (Iskanian, at p. 381.) Relief under PAGA is designed primarily to benefit the general public, not the party bringing the action. (Arias, at p. 986.) “A PAGA representative action is therefore a type of qui tam action,” conforming to all “traditional criteria, except that a portion of the penalty goes not only to the citizen bringing the suit but to all employees affected by the Labor Code violation.” (Iskanian, at p. 382.) The “government entity on whose behalf the plaintiff files suit is always the real party in interest.” (Ibid.)
However, not every private citizen in California can serve as the state’s representative. Instead, only an aggrieved employee has standing under PAGA. An “aggrieved employee” is “any person who was employed by
For purposes of our analysis here, it is undisputed that Johnson, at least at one time, was an aggrieved employee under PAGA. However, Maxim argues that Johnson’s individual claim is time-barred because she signed the Agreement some three years before she brought suit. Johnson counters that there is no requirement that she be able to recover on her individual claim to continue with the PAGA action against Maxim. Accordingly, the main issue posed by the parties on appeal is whether an employee, whose individual claim is time-barred, may still pursue a representative claim under PAGA. Under Kim, supra, 9 Cal.5th 73, we conclude the answer is yes.
In Kim, supra, 9 Cal.5th 73, an employee brought a putative class action lawsuit against his former employer alleging Labor Code violations and a PAGA claim. (Id. at pp. 82-83.) The superior court ordered the individual claims to arbitration, stayed the PAGA claim, and dismissed the class claims. (Id. at p. 82.) Later, the employee settled and dismissed the individual claims, “leaving only the PAGA claim for resolution.” (Ibid.) With the stay lifted, the employer “successfully moved for summary adjudication” on the PAGA claim, contending the dismissal of the employee’s individual claims meant he was no longer an “‘aggrieved employee’” with PAGA standing. (Id. at pp. 82-83.)
The California Supreme Court reversed. It concluded an employee who settles and dismisses individual Labor Code claims does not lose standing to pursue a PAGA claim. (Kim, supra, 9 Cal.5th at p. 84.) To this end, the court emphasized that the plain language of
The California Supreme Court rejected the contention that a plaintiff loses standing by settling individual Labor Code claims and accepting “compensation for his injury.” (Kim, supra, 9 Cal.5th at p. 84.) As it explained, the “Legislature defined PAGA standing in terms of violations, not injury,” and the employee became “aggrieved” when “one or more Labor Code violations
The court further clarified that PAGA standing does not depend on maintaining an individual Labor Code claim. (Kim, supra, 9 Cal.5th at p. 88.) Our high court found support for this conclusion in
Kim compels reversal here. Under Kim, we conclude Johnson is an “aggrieved employee” with standing to pursue her PAGA claim. Johnson alleged she is employed by Maxim and that she personally suffered at least one Labor Code violation on which the PAGA claim was based. (See Kim, supra, 9 Cal.5th at pp. 82, 84;
Maxim’s attempt to distinguish Kim is not persuasive. For example, Maxim contends that we would have to “distort[ ]” the holding of Kim to conclude that Johnson’s standing to bring a PAGA action has not been stripped by the relevant statute of limitation. Not so. The rule from Kim is an “aggrieved employee” has standing to pursue a PAGA claim, irrespective of whether that employee maintains a separate Labor Code claim. And, as discussed ante, Johnson alleged she was an aggrieved employee. Under Kim, this allegation is sufficient, at this stage, to establish standing. To the extent Maxim argues Kim applies only when a plaintiff settles the underlying Labor Code claims, we disagree.
Nor do we agree with Maxim that Robinson v. Southern Counties Oil Co. (2020) 53 Cal.App.5th 476 (Robinson) warrants a different conclusion. In that case, the plaintiff worked for the defendant from February 4, 2015 through June 14, 2017. In August 2018, the plaintiff filed the required notice of a Labor Code violation with the Agency. After waiting
However, in February 2019, in a case entitled Gutierrez v. Southern Counties Oil Company (Sup. Ct. San Diego County, No. 37-2017-00040850-CU-OE-CTL) (Gutierrez), the San Diego Superior Court approved a settlement in a class action that sought individual damages as well as civil penalties under PAGA for the same alleged Labor Code violations on which the plaintiff in Robinson brought suit. (Robinson, supra, 53 Cal.App.5th at p. 480.) The plaintiff in Robinson and three other employees opted out the class settlement in Gutierrez. The plaintiff then amended the allegations in his complaint to represent employees of the defendant who opted out of the settlement in Gutierrez and people who were employed from January 27, 2018 to present. (Robinson, at p. 480.)
The superior court subsequently sustained without leave to amend a demurrer to the plaintiff’s complaint. The court found that the plaintiff was barred from bringing a PAGA action asserting the same claims that were settled in Gutierrez and that he lacked standing to bring a representative action on behalf of employees employed during the time period when he was no longer also employed by the defendant. (Robinson, supra, 53 Cal.App.5th at pp. 480-481.)
The appellate court affirmed the judgment based on the order sustaining the demurrer. In doing so, the court explained that the doctrine of claim preclusion barred the plaintiff’s claims with respect to the violations settled in Gutierrez. (Robinson, supra, 53 Cal.App.5th at p. 482.) The court noted that the plaintiff’s suit and the Gutierrez action involved “PAGA claims based on the same alleged violations of the Labor Code.” (Robinson, at p. 482.) As such, although the plaintiff could opt out on an individual basis, there was no mechanism to opt out of the judgment entered on the PAGA claim. To this end, the court emphasized that a PAGA action substitutes as an action brought by the government; thus, a judgment or settlement in that action “binds all those, including nonparty aggrieved employees, who would be bound by a judgment in an action brought by the government.” (Ibid.)
Regarding the plaintiff’s attempt to represent aggrieved employees for violations occurring after January 27, 2018, the appellate court concluded the plaintiff lacked standing because he was not employed by the defendant at that time and was not affected by any of the alleged violations. (Robinson, supra, 53 Cal.App.5th at p. 484.)
Robinson is not applicable to the instant action. Here, there is no parallel case, like Gutierrez, that has been settled, involving the same PAGA claims Johnson advances in this case. Thus, the court’s discussion of issue preclusion in Robinson is not instructive. Further, unlike the plaintiff in Robinson, Johnson remains an employee of Maxim and continues to be governed by the terms of the Agreement. Moreover, she alleged that Maxim persists in requiring employees to sign agreements that contain the prohibited terms. Accordingly, nothing in Robinson supports Maxim’s argument that Johnson no longer has standing to bring a PAGA claim based on violations associated with the Agreement that occurred during the applicable statute of limitations.4
In short, under Kim, supra, 9 Cal.5th 73, Johnson has standing to bring the subject PAGA claim. Additionally, she alleged in the operative complaint that Maxim had violated
DISPOSITION
The judgment is reversed. Johnson is entitled to her costs on appeal.
HUFFMAN, Acting P. J.
WE CONCUR:
HALLER, J.
AARON, J.