In Chavez v. Hi-Grade Materials Co., the California Court of Appeal issued a ruling that significantly impacts how and when employees can appeal orders denying class certification, especially in cases involving both class claims and a Private Attorneys General Act (“PAGA”) claim. This decision is particularly important for California employers wary of facing wage-and-hour class actions and PAGA lawsuits.

The plaintiff, a former employee, brought a putative class action alleging various wage-and-hour violations and sought penalties under PAGA. After the trial court denied his motion for class certification, he attempted to appeal the order under the “death knell” doctrine, which provides an exception to the general rule that interlocutory orders are not immediately appealable. However, at the time of the appeal, his representative PAGA claim was still pending, making the death knell doctrine inapplicable.

More than a year after filing the appeal, the plaintiff voluntarily dismissed his remaining individual and representative PAGA claims in an attempt to retroactively create appellate jurisdiction over the class certification denial.  Nevertheless, the Court of Appeal dismissed the appeal for lack of jurisdiction.

The court reaffirmed that the death knell doctrine does not apply where PAGA claims are still active. Since PAGA allows for representative relief on behalf of other employees, the presence of a PAGA claim means the litigation is not truly at an end for the group as a whole. Further, the court ruled that the plaintiff could not create jurisdiction after-the-fact by dismissing his PAGA claims long after the class certification was denied. The court found this maneuver procedurally improper and declined to treat the appeal as a writ petition.

Key Takeaways for Employers

• Stronger Grounds to Dismiss Improper Appeals: Employers defending class actions paired with a PAGA claim now have clearer authority to challenge appeals filed prematurely after a denial of class certification.
• Discouragement of Procedural Gamesmanship: Plaintiffs can no longer game the system by dismissing PAGA claims to force appellate review. This may discourage speculative class certification motions.
• Continued Risk Under PAGA: Even if a class is not certified, employers remain exposed to liability under PAGA, which does not require class certification and allows employees to seek penalties on behalf of all aggrieved workers.

The Chavez decision is a win for employers navigating the procedural complexities of wage-and-hour class litigation in California. It tightens appellate rules around class certification denials and underscores the independent weight of PAGA claims. Employers should consult with counsel to understand how this decision may affect their litigation strategy when facing lawsuits containing both class action and PAGA claims.