Monday, July 20, 2009

Labor Union Could Not Bring Action for Members Under California Unfair Competition Law

This posting was written by Jody Coultas, Editor of CCH State Unfair Trade Practices Law.

A labor union that did not suffer an actual injury could not bring a representative action on behalf of aggrieved employees under the California Unfair Competition Law (UCL), according to the California Supreme Court.

In an action against an employer for violations of the Labor Code, and in turn the UCL, injured union members and employees assigned their rights to the labor union. The legal concept of assignment refers to the transferability of all types of property, including causes of action. The employer successfully argued that under the UCL an assignment of a cause of action cannot confer standing on an uninjured labor union.


The union did not have standing to bring the UCL claim against the employer because it did not suffer an actual injury, according to the court. In 2004, California voters passed Proposition 64, which required private plaintiffs to show that they had lost money or property as a result of the alleged unfair competition.

Allowing a non-injured assignee of a UCL claim to take the place of the actual, injured employee would violate Proposition 64's standing requirement, according to the court. Therefore, the injured employees could not confer standing to the uninjured labor union.

Associational Standing

The court rejected the labor union's argument that Proposition 64 incorporated the federal doctrine of associational standing. The doctrine applied only when the plaintiff association has not itself suffered actual injury but is seeking to act on behalf of its members that did sustained injury.

The court concluded that associations suing under the UCL were not exempt from the statute's express standing requirements and that Proposition 64 did not incorporate the associational standing doctrine.

The June 29, 2009, decision is Amalgamated Transit Union v. The Superior Court of Los Angeles County, S151615, CCH State Unfair Trade Practices Law ¶31,845.

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