This afternoon, the California Supreme Court handed down its highly anticipated decision in Arias v. Superior Court (Angelo Dairy) (June 29, 2009, S155965) ___ Cal.4th ___. Two central issues were before the Court: (1) Whether an employee who sues under the Unfair Competition Law (Bus. & Prof. Code §§ 17200, et seq.) for Labor Code violations must satisfy class action requirements and (2) Whether class action requirements must be met when an employee’s representative action against an employer is seeking civil penalties under the Labor Code Private Attorneys General Act of 2004 (Lab.Code §§ 2698, et seq .) (“PAGA”). The Court answered the first question by holding that a private party may pursue a representative action under the Unfair Competition Law only if the action meets the requirements for a class action. With respect to claims under PAGA, however, the Court held that private plaintiffs need not satisfy class action requirements when they seek civil penalties for themselves and other employees. In reaching its conclusion regarding PAGA claims, the Court rejected each of the defendants’ arguments, including Due Process arguments.
In a companion decision also issued this afternoon (Amalgamated Transit Union, Local 1756, AFL-CIO, et al. v. Superior Court (First Transit, Inc.)), the Court held that a labor union that has not suffered actual injury under the unfair competition law and that is not an “aggrieved employee” under PAGA may not bring a representative action under those laws. The Court held that a purported assignment of a cause of action under the Unfair Competition Law does not confer standing on an uninjured assignee, and that a cause of action under PAGA is not assignable in the first instance.