California Court of Appeal Upholds Dismissal of ‘Unmanageable’ PAGA Claim

On September 9, 2021, the Second District of the California Courts of Appeal ruled in Fred Wesson v. Staples the Office Superstore, LLC that trial courts have “inherent authority” to strike claims under the California Private Attorneys General Act (PAGA) if they will not be manageable at trial. As the first precedential decision on this issue from a California court, this case provides employers with a welcome potential defense to some PAGA claims.

Facts and Background

Under PAGA, employees in California are empowered to bring claims on behalf of other employees (and the state of California) for violations of the California Labor Code. Critically, plaintiffs need not meet class action requirements or go through class action procedures to bring claims under PAGA on behalf of other employees. As a result, unlike class actions, employers have had relatively limited recourse to challenge wide-reaching PAGA claims, sometimes brought on behalf of hundreds or thousands of employees.

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An Employee Whose Individual Claims Are Time-Barred Can Still Pursue a PAGA Action

On July 21, 2021, the California Court of Appeal, Fourth Appellate District, held in Johnson v. Maxim Healthcare Services, Inc., that an aggrieved employee whose individual claim was time-barred had standing to pursue a representative claim under the Private Attorney General Act of 2004 (PAGA) on behalf of other allegedly aggrieved employees. The court’s decision was based on its interpretation of the California Supreme Court’s 2020 ruling in Kim v. Reins, wherein the high court held an aggrieved employee who settled his individual claims nonetheless had standing to maintain a representative PAGA action. This decision is poised to have a significant impact on all employers in California by expanding the scope of individuals with standing to bring a PAGA action.

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Minnesota: Parentally Signed Exculpatory Waivers Are Binding After Adulthood

This past year, exculpatory waivers had their moment in the sun as businesses and educational institutions raced to put waivers in place to protect against claims stemming from the COVID-19 pandemic. A Minnesota Court of Appeals decision published this week, Carter Justice v. Marvel, LLC d/b/a Pump It Up Parties, provides clarity and confidence for the Minnesota businesses and educational institutions that utilize waivers for persons under 18. In an issue of first impression, the appellate court held that an exculpatory waiver signed by a parent on behalf of his or her minor child is binding on the child after the child becomes an adult. The court also reinforced the standard for determining whether a waiver is enforceable under Minnesota law and the effect of an overly broad waiver.

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Supreme Court Decides Cedar Point Nursery et al. v. Hassid et al.

On June 23, 2021, the U.S. Supreme Court decided Cedar Point Nursery et al. v. Hassid et al., holding that a California regulation that granted labor organizations a right to take access to an agricultural employer’s property to solicit support for unionization constitutes a per se physical taking.

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Accrued but Unused Vacation Pay Must Be Paid Out Upon Termination of Employment in Colorado

Colorado’s Supreme Court found that Colorado employees receiving vacation time must be paid out accrued but unused time when their employment is terminated. In Carmen Nieto v. Clark’s Market, Inc., the state Supreme Court held that if an employer chooses to provide vacation pay, all accrued but unused vacation pay must be paid to employees upon termination and that no agreement to the contrary will be enforced.

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Texas Federal Court Rejects Challenge to Employee COVID-19 Vaccination Requirement

While public health leaders continue to wrestle with vaccine hesitancy, businesses are wrestling with employee challenges to COVID-19 vaccination mandates. This Saturday marked a win for private employers after a Texas District Court tossed a lawsuit brought by over 100 hospital employees claiming they were subjected unlawfully to a COVID-19 vaccination policy as a condition of continued employment. Although the plaintiffs’ counsel has said they plan to appeal the decision, the order provides helpful precedent for other organizations mulling such vaccination mandates.

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