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Unions Barred from Filing Suits on Behalf of Members

To all outward appearances, a June 29 decision by the California Supreme Court is a victory for employers over unions. That day, justices concluded that labor unions lacked standing to sue on behalf of employees under the state's unfair competition law (UCL) because the unions themselves had not suffered injury. Furthermore, the court said, any lawsuits brought under the UCL seeking relief on behalf of others must be brought as class actions. In addition, justices said unions cannot bring representative actions under the state's five-year-old Private Attorneys General Act because they are not "aggrieved employees."

In the case, Amalgamated Transit Union, Local 1756, AFL-CIO v. Superior Court (First Transit Inc.), two labor unions and 17 individuals sued three transportation companies, alleging violations under the two laws over missed meal and rest breaks. They sought more than $10.6 million in unpaid wages and more than $2.6 million in penalties, interest and attorneys' fees.

In the Amalgamated Transit case, the unions conceded that they didn't suffer injury as the result of an unlawful action. However, they argued that they had standing to sue as assignees of the employees who did claim injury.

"To allow a non-injured assignee of an unfair competition claim to stand in the shoes of the original, injured claimant would confer standing on the assignee in direct violation of the express statutory requirement in the unfair competition law, as amended by the voters' enactment of Proposition 64," Justice Joyce Kennard wrote for the court.

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