Employees may not assign their rights to bring claims under the Unfair Competition Law or under the Private Attorney General Act to Labor Unions
In this companion case to Arias v. Superior In Amalgamated Transit, several labor unions representing over 150 employees alleged claims against employers under both the unfair competition law and PAGA. The unions served as the designated representatives of the employees and had been assigned all rights of the employees including the right to sue in a representative capacity.
While the unions conceded that they lacked standing under unfair competition law, because they had not been “injured in fact” as required by Proposition 64, and were not “aggrieved employees” under PAGA, the unions contended that they could proceed because they had been designated as the employees’ representatives and because the employees had assigned all of their rights to the unions.
The Supreme Court rejected these arguments holding that an assignment would be in direct violation of the express statutory requirement in unfair competition law that the claim be brought exclusively by the person who has suffered injury. Similarly, the Court refuted the unions’ argument that aCourt, the California Supreme Court held that labor unions do not have standing to pursue claims on behalf of their individual members under either the California unfair competition law or the Labor Code Private Attorneys General Act of 2004 (“PAGA”), even if these rights have been assigned to the unions by their employee members.
California unfair competition law prohibits any unlawful, unfair, or fraudulent business act or practice. Modified in 2004 by Proposition 64, the law now requires a party bringing a representative claim to be a “person who has suffered injury in fact and has lost money or property as a result of the unfair competition.”
PAGA, enacted in 2004, provides that an “aggrieved employee” may bring a civil action against her employer or former employer to recover civil penalties for violations of the Labor Code. An “aggrieved employee” is defined as “a person who was employed by the alleged violator and against whom one or more of the alleged violations was committed.”
PAGA claim could be assigned, based on the grounds that rights to statutory penalties could not be assigned.