Coronel v. Pinnacle Agriculture Distribution, Inc. CA4/3 ( 2022 )

Filed 4/26/22 Coronel v. Pinnacle Agriculture Distribution, Inc. CA4/3
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION THREE
JUVENAL CORONEL,
Plaintiff and Appellant, G060945
v. (Super. Ct. No. 18CV004287)
PINNACLE AGRICULTURE OPINION
DISTRIBUTION, INC.,
Defendant and Respondent.
Appeal from a judgment of the Superior Court of Monterey County, Lydia
Villarreal, Judge. Affirmed.
Diversity Law Group, Larry W. Lee, Max W. Gavron; Fenton & Keller,
Christopher E. Panetta, Sharilyn R. Payne and Elizabeth R. Leitzinger for Plaintiff and
Appellant.
Perkins Coie, Sopen Shah, Jon G. Daryanani and Jill L. Ripke for
Defendant and Respondent.
* * *
Plaintiff Juvenal Coronel (plaintiff) filed this lawsuit against his former
employer, defendant Pinnacle Agriculture Distribution, Inc. He alleged representative
1
claims under the Private Attorneys General Act (PAGA; Lab. Code, § 2698 et seq.) and
class claims based on various wage and hour violations. A few months after he filed his
lawsuit, defendant settled a similar class action and PAGA lawsuit filed by nonparty
Damian Reyes (the Reyes action). This settlement was approved and judgment was
entered in the Reyes action. Defendant then filed a motion for judgment on the pleadings
in this action, arguing plaintiff’s claims were barred by the settlement in the Reyes action.
The trial court agreed, granted the motion, and entered judgment in favor of defendant.
Plaintiff now appeals. While he concedes some of his claims overlap with the Reyes
action, he maintains his lawsuit asserted several unique causes of action that the trial
court incorrectly found were barred by claim preclusion. We disagree. The claims
asserted in this action all involve the same primary rights as those in the Reyes action,
and, consequently, they are barred by claim preclusion. As such, we affirm the judgment.
I
FACTS AND PROCEDURAL HISTORY
A. Plaintiff’s Complaint
This is a class action and PAGA lawsuit. Plaintiff initially filed suit against
defendant in November 2018, then filed the operative first amended complaint (FAC) in
May 2019. The FAC alleged claims for (1) failure to provide proper meal breaks
(§§ 226.7, 512), (2) failure to provide proper rest breaks (§ 226.7), (3) failure to pay
minimum wage (§§ 1194, 1197, 1197.1), (4) failure to pay accrued vacation time upon
separation (§ 227.3), (5) failure to provide proper wage statements (§ 226, subd. (a)),
(6) violations of Business and Professions Code section 17200 (UCL), and (7) PAGA
1
All further undesignated statutory references are to the Labor Code.
2
penalties for all aggrieved employees based on the aforementioned alleged Labor Code
violations. The alleged class included “[a]ll current and former non-exempt employees
who worked for Defendant[] in the State of California at any time from November 8,
2014, through the present . . . .”
At issue in this appeal are the third, fourth, and seventh causes of action.
The third cause of action was based on defendant’s alleged failure “to pay for time spent
by employees undergoing mandatory drug testing.” Plaintiff sought recovery of these
unpaid wages under sections 1194 and 1197. He also alleged that defendant had failed to
pay these unpaid wages to employees at separation, as required under sections 201 and
2
202, and sought penalties under section 203.
The fourth cause of action was based on allegations that “Defendant[] did
not pay all vested vacation wages to employees upon termination. Specifically,
employees forfeited accrued vacation time and paid time off.” As with the third cause of
action, plaintiff also sought penalties under section 203 based on defendant’s alleged
failure to pay these unpaid wages upon employee separation.
As to the PAGA claim, two portions are relevant here. First, there was a
derivative portion seeking PAGA penalties based on the Labor Code violations alleged in
the third and fourth causes of action. Second, plaintiff also sought PAGA penalties based
on defendant’s alleged failure to keep accurate time records in violation of section 1174
subdivision (d), and Industrial Welfare Commission’s (IWC) wage order 14-2001,
section 7. (Cal. Code Reg., tit. 8, § 11140, subd. (7).)
2
Generally, sections 201 and 202 require an employer to pay an employee all wages
earned and unpaid at the time of separation. (§§ 201, 202.) If an employer willfully fails
to do so, it must pay the employee “a penalty from the due date thereof at the same rate
until paid or until an action therefor is commenced; but the wages shall not continue for
more than 30 days.” (§ 203, subd. (a).)
3
B. The Reyes Action and Settlement
A year and a half before plaintiff filed this action, nonparty Damian Reyes
(Reyes) filed a similar class action and PAGA lawsuit against defendant in March 2017.
The Reyes action involved claims for (1) failure to provide proper meal breaks (§§ 226.7,
512); (2) failure to provide proper rest breaks (§§ 226.7, 512); (3) failure to provide one
day’s rest per workweek (§§ 512, 552); (4) failure to provide proper wage statements
(§ 226, subd. (a)); (5) failure to pay wages upon separation (§§ 201-203); (6) violations
of the UCL; and (7) PAGA penalties for the aforementioned alleged Labor Code
violations.
The Reyes action settled in May 2019. Defendant agreed to pay the class
3
$350,000, with $10,000 of this amount allocated to PAGA penalties. The same trial
judge that presided over this action also presided over the settlement approval process in
Reyes and granted final approval of the settlement (the Reyes settlement) in October
2019. There is no dispute plaintiff was part of the class covered by the Reyes settlement,
which included “any current or former hourly non-exempt employees employed by
Defendant . . . in California during the Class Period.” The Class Period ran from either
March 15, 2013 or September 1, 2014 (depending on the specific facility where the class
member worked) to the date of preliminary approval of the settlement, which was granted
in June 2019.
In exchange for a portion of the settlement proceeds, class members that
participated in the Reyes settlement released “any and all claims, known or unknown,
which were alleged or could have been alleged based on the facts alleged in the operative
Complaint both on behalf of the named Class Representative [i.e., Reyes] and on behalf
of the Class Members, including but not limited to claims for (1) Failure to Provide Meal
3
Unlike class payments, PAGA penalties are split between the Labor and Workforce
Development Agency (LWDA) and aggrieved employees, with 75 percent going to the
former and 25 percent going to the latter. (§ 2699, subd. (i).)
4
Breaks and Meal Break Premium Wages in Violation of Labor Code Sections 512 and
226.7; (2) Failure to Provide Rest Breaks and Rest Break Premium Wages in Violation of
Labor Code Section 226.7[;] (3) Failure to Provide One Day’s Rest in Seven in Violation
of Labor Code Sections 551 and 552; (4) Failure to Provide Accurate Wage Statements in
Violation of Labor Code Section 226; (5) Failure to Timely Pay Final Wages in Violation
of Labor Code Sections 201, 202, and 203; (6) Violation of Business and Professions
Code Sections 17200, et seq.; (7) Civil Penalties Pursuant to [PAGA], Labor Code
Section 2698, et seq.”
If class members were unhappy with the terms of the settlement, they could
(1) opt out and preserve their claims by submitting a form to the settlement administrator,
or (2) file an objection explaining why the settlement should not be approved (though
they would be bound by the settlement if their objection was overruled). Class members
that did not opt out would be bound by the settlement’s release. The notice of settlement
sent to class members stated, “[i]f you do not submit a timely request to be excluded from
the settlement, you will be giving up your right to bring a legal claim against the
[defendant] for the same claims, or similar claims, as those encompassed by this lawsuit.
Specifically, the parties’ Settlement Agreement states that you will release all Released
Parties for the Released Claims accrued during the Claims Period.” This text was
followed by the release language set forth above, as well as the definitions for “Released
Persons” and “Class Period.” It is uncontested that plaintiff was provided notice of the
settlement and did not opt out.
Judgment was entered in the Reyes action on December 12, 2019. The final
judgment provided that “the claims of each and every Class Member who did not timely
and validly exclude themselves from [the] settlement . . . released in the Release of
Claims are and shall be deemed to be conclusively released as against the Released
Persons. All Class Members who did not timely and validly exclude themselves from
settlement . . . are hereby forever barred and enjoined from prosecuting the Claims
5
released in the Release of Claims against the Released Persons.” There was no appeal of
the judgment, and it became final in March 2020.
C. Motion for Judgment on the Pleadings in this Action
After final approval of the Reyes settlement was granted but prior to the
entry of judgment, defendant moved for judgment on the pleadings in this action.
Defendant argued plaintiff’s claims in the FAC were either barred by the release or by
4
claim preclusion. In making its ruling, the court divided plaintiff’s claims into two
categories. It granted defendant’s motion as to the first and second causes of action (meal
and rest breaks), as well as the derivative portions of the sixth (UCL) and seventh causes
of action (PAGA), finding these claims were directly released by the Reyes settlement.
As to the third, fourth, and fifth causes of action and the derivative portions of the sixth
and seventh causes of action, the court believed they were barred by claim preclusion.
But it thought the application of claim preclusion was premature since no final judgment
had been entered in the Reyes action. As such, the court denied the motion as to these
claims without prejudice to defendant renewing the motion once there was a final
judgment in the Reyes action.
Once the judgment in the Reyes action became final, defendant renewed its
motion for judgment on the pleadings as to the remaining claims. Following oral
argument, the court took the matter under submission then issued a written order granting
the motion. The order does not explain the basis of the ruling, but given the court’s
statements at oral argument, it appears to be based on claim preclusion. Since the
renewed motion completely disposed of plaintiff’s claims, the trial court entered
judgment against him in May 2020.
4
Defendant referred to the doctrine as “res judicata” in its motion. Our Supreme Court
has clarified this doctrine should be referred to as “claim preclusion.” (Samara v. Matar
(2018) 5 Cal.5th 322, 326 (Samara).)
6
Plaintiff now appeals, arguing the court incorrectly granted the renewed
motion as to the third and fourth causes of action and a portion of his PAGA claim. He
maintains these claims were based on unique allegations that were not and could not be
released by the Reyes settlement. These specific allegations include defendant’s failure
to (1) compensate employees for time spent undergoing mandatory drug testing (third
cause of action and derivative portion of PAGA claim); (2) pay employees for accrued
but unused vacation time (fourth cause of action and derivative portion of PAGA claim);
and (3) maintain accurate time records for meal breaks (standalone portion of PAGA
5
claim). The trial court ruled correctly, and we affirm the judgment.
Before we begin our analysis, we note that plaintiff filed a request for
judicial notice of the written notice he gave the California Labor and Workforce
Development Agency (LWDA) of his PAGA claims. This PAGA notice is immaterial to
our analysis, so we deny plaintiff’s request for judicial notice.
II
DISCUSSION
A. Applicable Law
“A motion for judgment on the pleadings is equivalent to a demurrer and is
governed by the same de novo standard of review. [Citation.] All properly pleaded,
material facts are deemed true, but not contentions, deductions, or conclusions of fact or
law.” (Adams v. Bank of America, N.A. (2020) 51 Cal.App.5th 666, 670.)
In the context of a judgment entered pursuant to a class action or PAGA
settlement, courts apply the law of preclusion to determine if subsequent actions are
5
It does not appear from plaintiff’s briefs that he appeals the trial court’s ruling on the
fifth cause of action (failure to provide proper wage statements). To the extent he does,
we find this cause of action is barred by claim preclusion for the same reasons discussed
in Section II.C., infra.
7
barred. (See, e.g., Robinson v. Southern Counties Oil Co. (2020) 53 Cal.App.5th 476,
481-483; Shine v. Williams-Sonoma, Inc. (2018) 23 Cal.App.5th 1070, 1076-1077
(Shine); Villacres v. ABM Industries Inc. (2010) 189 Cal.App.4th 562, 575-578
(Villacres).) “The law of preclusion helps to ensure that a dispute resolved in one case is
not relitigated in a later case.” (Samara, supra, 5 Cal.5th at p. 326.) Preclusion includes
claim preclusion and issue preclusion, which each have different requirements and
effects. (Id. at pp. 326-327.)
At issue here is claim preclusion, which “prevents relitigation of entire
causes of action.” (Samara, supra, 5 Cal.5th at pp. 326-327.) “[A]ll claims based on the
same cause of action must be decided in a single suit; if not brought initially, they may
not be raised at a later date. ‘“[Claim preclusion] precludes piecemeal litigation by
splitting a single cause of action or relitigation of the same cause of action on a different
legal theory or for different relief.”’ [Citation.] A predictable doctrine of [claim
preclusion] benefits both the parties and the courts because it ‘seeks to curtail multiple
litigation causing vexation and expense to the parties and wasted effort and expense in
judicial administration.’” (Mycogen Corp. v. Monsanto Co. (2002) 28 Cal.4th 888, 897
(Mycogen), italics omitted.) Claim preclusion “applies only when ‘a second suit involves
(1) the same cause of action (2) between the same parties [or their privies] (3) after a final
judgment on the merits in the first suit.’” (Samara, supra, 5 Cal.5th at pp. 326-327.)
Here, plaintiff only contests the first element, arguing his claims involve
different causes of action than those alleged by Reyes. “To determine whether two
proceedings involve identical causes of action for purposes of claim preclusion,
California courts have ‘consistently applied the “primary rights” theory.’” (Boeken v.
Philip Morris USA, Inc. (2010) 48 Cal.4th 788, 797-798.) “‘[T]he primary right is
simply the plaintiff’s right to be free from the particular injury suffered. [Citation.] It
must therefore be distinguished from the legal theory on which liability for that injury is
premised: “Even where there are multiple legal theories upon which recovery might be
8
predicated, one injury gives rise to only one claim for relief.” [Citation.] The primary
right must also be distinguished from the remedy sought: “The violation of one primary
right constitutes a single cause of action, though it may entitle the injured party to many
forms of relief, and the relief is not to be confounded with the cause of action, one not
being determinative of the other.”’” (Mycogen, supra, 28 Cal.4th at p. 904.) “[U]nder
the primary rights theory, the determinative factor is the harm suffered. When two
actions involving the same parties seek compensation for the same harm, they generally
involve the same primary right.” (Boeken, at p. 798.)
Significantly, claim preclusion also “bars the relitigation not only of claims
that were conclusively determined in the first action, but also matter that was within the
scope of the action, related to the subject matter, and relevant to the issues so that it could
have been raised. [Citations.] ‘A party cannot by negligence or design withhold issues
and litigate them in consecutive actions. Hence the rule is that the prior judgment
[precludes] matters which were raised or could have been raised, on matters litigated or
litigable.’” (Burdette v. Carrier Corp. (2008) 158 Cal.App.4th 1668, 1674-1675, italics
added.) This principle applies within the context of a class action settlement. “‘[A]
judgment pursuant to a class settlement can bar [subsequent] claims based on the
allegations underlying the claims in the settled class action. This is true even though the
precluded claim was not presented, and could not have been presented, in the class action
itself.’” (Villacres, supra, 189 Cal.App.4th at pp. 586-587.)
B. The Third and Fourth Causes of Action and Derivative PAGA Claims
As explained below, the third and fourth causes of action and their
derivative PAGA claims involve the same primary rights as the claims asserted in the
Reyes action and are barred by claim preclusion.
We start by reviewing the Reyes action, which sought recovery of unpaid
wages. In particular, Reyes generally alleged defendant “failed to pay [Reyes] and other
9
hourly non-exempt employees with all wages . . . during their employment and never
paid these amounts after [Reyes] and other hourly non-exempt employees separated
employment with Defendants.” (Italics added.) Likewise, Reyes’ fifth cause of action
asserted the class was “entitled upon separation of employment to timely payment of all
wages earned and unpaid prior to separation of employment. . . . [¶] . . . Defendant[]
failed to pay [Reyes] and the [alleged class] with all wages as alleged above during their
employment and never paid these amounts after the employees separated from
Defendants.” (Italics added.) Reyes’ fifth cause of action sought to recover these unpaid
wages on behalf of the class under sections 201, 202 and 203.
Here, plaintiff’s fourth cause of action also sought recovery of unpaid
wages, specifically, unpaid vacation wages that defendant allegedly failed to pay
employees upon termination in violation of section 227.3. This cause of action is entirely
subsumed by Reyes’ fifth cause of action. As set forth above, Reyes sought recovery of
all wages earned and unpaid at termination. The reference to “all wages” in the Reyes
complaint necessarily includes unpaid vacation wages. (See § 227.3 [characterizing
unpaid vacation “as wages”]; Rhea v. General Atomics (2014) 227 Cal.App.4th 1560,
1570 [same].) In other words, plaintiff’s fourth cause of action seeks redress for the same
harm as Reyes’ fifth cause of action – unpaid wages – but under a different legal theory.
As such, it is precluded by the Reyes judgment. (See Mycogen, supra, 28 Cal.4th at p.
904.)
Plaintiff’s third cause of action sought recovery for defendant’s alleged
failure to pay minimum wages. Plaintiff asserted defendant violated sections 1194 and
10
6
1197 by failing to pay employees for time spent undergoing mandatory drug testing.
This cause of action is broader than Reyes’ fifth cause of action described above. The
latter only sought unpaid wages for employees that were separated from employment. In
comparison, plaintiff’s third cause of action covered separated and current employees.
However, this distinction does not save this claim. Rather, we look at the injury forming
the basis of each claim. (Mycogen, supra, 28 Cal.4th at p. 904.) In doing so, we again
conclude both claims involve the same injury – defendant’s failure to pay wages owed –
but seek recovery under different legal theories. While the Reyes action sought unpaid
wages under sections 201 and 202, plaintiff pursued them under sections 1194 and 1197.
Since the claims involve the same harm, plaintiff’s third cause of action is precluded.
Similarly, we find plaintiff’s PAGA claims based on the above Labor Code
violations are also barred by claim preclusion. Unlike the third and fourth causes of
action, these derivative PAGA claims did not seek compensation for unpaid work.
Instead, “a PAGA action is a dispute between an employer and the state [LWDA].”
(Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 384.) PAGA
penalties are intended “‘to punish and deter employer practices that violate the rights of
numerous employees under the Labor Code.’” (Id. at pp. 383-384.) “Relief under PAGA
is designed primarily to benefit the general public, not the party bringing the action.”
(Kim v. Reins International California, Inc. (2020) 9 Cal.5th 73, 81.)
Accordingly, this portion of plaintiff’s PAGA claim sought to penalize
defendant for harms caused to the public due to its failure to pay wages. The Reyes
action, however, already vindicated the same harm. Reyes’ PAGA claim sought
6
Section 1194 allows “any employee receiving less than the legal minimum wage . . .
applicable to the employee . . . to recover in a civil action the unpaid balance of the full
amount of this minimum wage.” Similarly, section 1197 provides that “[t]he minimum
wage for employees fixed by the commission or by any applicable state or local law, is
the minimum wage to be paid to employees, and the payment of a lower wage than the
minimum so fixed is unlawful.”
11
penalties for defendant’s failure to pay aggrieved employees “all unpaid wages” upon
separation from employment. Among other things, Reyes’ PAGA claim alleged
defendant “failed to pay . . . hourly non-exempt employees with all wages . . . during
their employment and never paid these amounts after [they] separated employment with
Defendant[]” in violation of sections 201 and 202.
Though Reyes’ PAGA claim did not seek penalties for the specific Labor
Code sections at issue here (§§ 227.3, 1194, 1197, 1197.1), this is immaterial. Claim
preclusion requires that we look at the injury underlying the claims, not the remedy
sought. At their core, the relevant claims in both actions sought penalties on behalf of the
LWDA for defendant’s failure to pay wages owed. They involve the same injury but
seek PAGA penalties under different Labor Code sections. This is insufficient to avoid
preclusion. (See Mycogen, supra, 28 Cal.4th at p. 904.) Thus, plaintiff’s PAGA claims
based on unpaid vacation and uncompensated drug testing are precluded.
C. The Remaining PAGA Claim
Next, we address the portion of plaintiff’s PAGA claim based on
defendant’s alleged failure to keep accurate records of meal breaks. This claim is based
on plaintiff’s assertion that defendant “fail[ed] to maintain records of when
. . . employees clocked in and out for meal periods” in violation of section 1174,
subdivision (d) and IWC’s wage order 14-2001, section 7 (Cal. Code Regs., tit. 8,
§ 11140, subd. (7)(A)(3)).
Generally, the purpose behind an employer’s duty to maintain accurate
records of meal breaks is to ensure that employees are provided compliant meal periods
and compensated when they are not. (See Donohue v. AMN Services, LLC (2021) 11
Cal.5th 58, 74-76.) Indeed, along with his PAGA claim, plaintiff asserted meal break
claims against defendant, alleging it “required Plaintiff and Class Members to be ‘on call’
during their meal breaks” and “work through their meal breaks.” Plaintiff further alleged
12
that first meal breaks were often untimely, second meal breaks were not provided, and
defendant did not provide employees with premium pay under section 226.7 for
noncompliant meal periods.
The record-keeping portion of plaintiff’s PAGA claim is intertwined with
these meal period claims. In general, the harm associated with defendant’s failure to
accurately record meal periods was that employees were given noncompliant meal
periods and deprived of premium pay under section 226.7. Plaintiff’s PAGA claim
sought to vindicate that harm on behalf of the public. (See Iskanian v. CLS
Transportation Los Angeles, LLC, supra, 59 Cal.4th at p. 384.) But the Reyes action
already brought a PAGA claim based on this injury. It expressly sought PAGA penalties
based on defendant’s failure to provide proper meal breaks and premium pay.
Further, the Reyes action also sought PAGA penalties for defendant’s
failure to provide accurate wage statements under section 226. Among other things,
defendant’s wage statements allegedly failed to reflect premium pay for noncompliant
meal breaks. Section 226 imposes a similar record-based duty on employers. It “obliges
employers to provide their employees with records of their earnings and deductions, and
imposes penalties upon employers who knowingly and intentionally fail to supply the
records.” (Naranjo v. Spectrum Security Services, Inc. (2009) 172 Cal.App.4th 654, 668-
669.) Like the duty to maintain accurate records at issue here, the duty to provide
accurate wage statements is also “intended to ensure workers are correctly and adequately
compensated for their work.” (Ward v. United Airlines, Inc. (2020) 9 Cal.5th 732, 752-
753.) Thus, to the extent there is a unique harm attached to the violation of these record-
based duties that is separate from the harm caused by inadequate compensation, it was
already addressed by Reyes’ wage-statement PAGA claim.
13
D. Remaining Arguments
We are not persuaded by any of plaintiff’s remaining arguments. First,
plaintiff contends that even if the elements of claim preclusion were met, the trial court
should have exercised its discretion not to apply it. He cites case law stating that “[e]ven
if the[] threshold requirements are established, res judicata will not be applied ‘if injustice
would result or if the public interest requires that relitigation not be foreclosed.’”
(Dunkin v. Boskey (2000) 82 Cal.App.4th 171, 181.) But we see no reason not to apply
claim preclusion here. Plaintiff could have opted out of the class action portion of the
settlement if he wanted to preserve his own claims, or he could have objected if he was
unhappy with its terms. He did neither. As for the settled PAGA claims, “there is no
mechanism for opting out of the judgment entered on the PAGA claim.” (Robinson v.
Southern Counties Oil Co. (2020) 53 Cal.App.5th 476, 482.) Still, plaintiff has not
shown the application of claim preclusion is unjust here. Among other things, he has
failed to show the amount of PAGA penalties allocated to the aggrieved employees in the
Reyes settlement is unfair. (See Williams v. Superior Court (2017) 3 Cal.5th 531, 548-
549 [“PAGA settlements are subject to trial court review and approval, ensuring that any
negotiated resolution is fair to those affected”].)
Next, plaintiff contends the third (drug testing) and fourth (unpaid vacation)
causes of action were unreleasable under sections 206 and 206.5. Together, these statutes
“prohibit[] employers from coercing settlements by withholding wages concededly
due. [W]ages are not considered ‘due’ and unreleasable under Labor Code section 206.5,
unless they are required to be paid under Labor Code section 206.” (Watkins v.
Wachovia Corp.(2009) 172 Cal.App.4th 1576, 1586-1587.) As relevant here, wages
must be paid under section 206 “when the employer concedes they are due.” (Shine,
supra, 23 Cal.App.5th at pp. 1077-1078.) But “[w]hen a bona fide dispute exists, the
disputed amounts are not ‘due,’ and the bona fide dispute can be voluntarily settled with a
release and a payment—even if the payment is for an amount less than the total wages
14
claimed by the employee.” (Watkins, at pp. 1586-1587.) Plaintiff asserts the parties to
the Reyes settlement did not have a bona fide dispute as to whether class members were
entitled to unpaid vacation and drug testing time because those claims were not alleged in
the Reyes complaint. Since these claims were not in dispute in the Reyes action, plaintiff
maintains they were unreleasable. We disagree.
To start, the question before us is not whether the claims were unreleasable.
Rather, it is whether these claims are barred by claim preclusion. The release in the
Reyes settlement was approved by the trial court and memorialized in the resulting
judgment, which we find precludes plaintiff’s claims. To the extent plaintiff contends a
release of these claims should not have been approved, “‘“[a]n erroneous judgment is as
conclusive as a correct one.”’” (Sabek, Inc. v. Engelhard Corp. (1998) 65 Cal.App.4th
992, 999.) Plaintiff has not cited any case law showing sections 206 and 206.5 have any
effect on claim preclusion analysis. Nor does he present any argument that they should,
let alone explain how these sections can be harmonized with primary rights analysis. As
7
such, he has failed to meet his burden to affirmatively demonstrate error. (See Morgan
v. Imperial Irrigation Dist. (2014) 223 Cal.App.4th 892, 913.)
Further, even if section 206.5 applied to claim preclusion analysis, we are
still unpersuaded by plaintiff’s argument. In arguing that there was no bona fide dispute,
plaintiff incorrectly focuses on the allegations made in the Reyes action. But the proper
inquiry is whether there was a bona fide dispute in this action that the wages at issue
7
Shine involved a similar scenario where a prior wage and hour action had settled and the
plaintiff in a subsequent lawsuit argued the release was invalid as to his claims under
section 206.5. The court evaluated the argument and found section 206.5 did not apply
because there was a bona fide dispute in the second lawsuit as to whether wages were
owed. (Shine, supra, 23 Cal.App.5th at pp. 1077-1078.) But Shine addressed this
argument without analyzing whether these statutes are even applicable when applying
claim preclusion. “‘[A] decision does not stand for a proposition not considered by the
court.’” (Agnew v. State Bd. of Equalization (1999) 21 Cal.4th 310, 331-332.)
15
were owed. (Shine, supra, 23 Cal.App.5th at p. 1078.) It does not make sense to
conclude the claims are unreleasable based on the allegations in the Reyes action alone.
The absence of a dispute over this issue in the Reyes action does not inevitably mean that
defendant has conceded these wages are owed, which would render them unreleasable.
(Ibid.; Watkins v. Wachovia Corp., supra, 172 Cal.App.4th at pp. 1586-1587.) Plaintiff
has not attempted to show that no bona fide dispute exists in this case concerning the
wages at issue. Thus, he has not met his burden to show error by the trial court.
8
(Starcevic v. Pentech Financial Services, Inc. (2021) 66 Cal.App.5th 365, 374.)
Finally, plaintiff makes an argument based on Reyes’ PAGA notice to the
LWDA, which is a prerequisite to commencing a PAGA action. (§ 2699.3, subd. (a).)
Plaintiff asserts Reyes’s PAGA notice did not include allegations relating to unpaid
vacation and drug testing. Consequently, plaintiff contends Reyes did not exhaust his
administrative remedies as to these PAGA claims and could not have asserted them in the
Reyes action. But this argument incorrectly assumes Reyes could not settle a claim he
could not bring. “‘Even when the court does not have power to adjudicate a claim, it may
still “approve release of that claim as a condition of settlement of [an] action [before
it].”’” (Villacres, supra, 189 Cal.App.4th at p. 586; see, e.g., Moniz v. Adecco USA, Inc.
(2021) 72 Cal.App.5th 56, 82-83 [finding court had authority to approve release of
PAGA claims that were not listed in the PAGA notice because they involved the same
primary right].)
Moreover, the question before us is not whether the lower court should
have approved the settlement. Rather, it is whether plaintiff’s claims are precluded by the
8
We admonish plaintiff for his citation to McPherson v. EF Intercultural Foundation,
Inc. (2020) 47 Cal.App.5th 243. McPherson was certified for partial publication, and, as
plaintiff acknowledges, he cites the unpublished portion in his opening brief. This is a
violation of California Rules of Court, rule 8.1115(a), which provides “an opinion of a
California Court of Appeal . . . that is not certified for publication or ordered published
must not be cited or relied on by a court or a party in any other action.”
16
Reyes judgment. “‘[A] judgment pursuant to a class settlement can bar [subsequent]
claims based on the allegations underlying the claims in the settled class action. This is
true even though the precluded claim was not presented, and could not have been
presented, in the class action itself.’” (Villacres, supra, 189 Cal.App.4th at pp. 586-587.)
While we recognize the Reyes settlement involved PAGA claims and class claims,
plaintiff has not cited any authority for the proposition that the preclusive effect of a
PAGA judgment is narrower than that of a class action judgment.
Plaintiff, in his opening brief, cites Arias v. Superior Court (2009) 46
Cal.4th 969, 987, for the proposition that “if nonparty employees [are] not given notice of
[a PAGA] action, such nonparty employees [are] not . . . bound by the judgment.” From
this, he argues by analogy that when an employee fails to provide notice of PAGA claims
to the LWDA, any resulting PAGA judgment is not binding on the State as to those
claims. We are not persuaded by this argument. In the portion of Arias cited by plaintiff,
the Supreme Court was discussing the collateral estoppel effect of a PAGA judgment. It
clarified that for some Labor Code violations, a plaintiff may obtain civil penalties under
PAGA as well as other remedies. The Court explained that if an employer prevails in a
PAGA action, nonparty employees who were not given notice of the action “would not
be bound by the judgment as to remedies other than civil penalties.” (Arias, at pp. 986-
987, italics added.) This statement is inapposite here. First, it discusses the effect of lack
of notice on nonparty employees, not the effect of lack of notice to the LWDA. Second,
this statement focuses on the effect of a PAGA judgment on remedies other than civil
penalties. It is irrelevant to the situation we face, where the issue is whether Reyes’ prior
claim for PAGA penalties precludes plaintiff’s claim for PAGA penalties in this lawsuit.
17
III
DISPOSITION
The judgment is affirmed. Defendant is entitled to its costs on appeal.
MOORE, ACTING P. J.
WE CONCUR:
SANCHEZ, J.
MARKS, J.*
*Judge of the Orange County Superior Court, assigned by the Chief Justice pursuant to
article VI, section 6 of the California Constitution.
18