While still new enough that most employers don’t yet know what a “PAGA” claim is, a claim under PAGA (the four letter acronym for Private Attorney General Act) can indeed be a curse to those employers unlucky enough to have made its acquaintance. You see, under the Labor Code PAGA, aggrieved employees are allowed to file suit on behalf of the State of California Labor and Workforce Development Agency, themselves, and other employees to collect penalties for any violation of the California Labor Code.
If the Labor Code already specifies a civil penalty for violation of a specific provision, then an employee may attempt to collect that penalty for themselves and on behalf of other aggrieved employees. If the underlying Labor Code section does not specify the civil penalty, the PAGA penalty is equal to $100 for each employee per pay period for the initial violation, and $200 for each employee per pay period for each subsequent violation. Cal. Lab. Code §2699(f)(2). Thus, given the breadth of the California Labor Code and the numerous opportunities for unintentional violations, the potential penalties are staggering. Even more, a successful employee will be awarded their attorney fees and costs.
Not only is there monetary incentive to assert PAGA claims (75% of the monies go to the State, and 25% to the employees), but plaintiff’s attorneys will often assert a PAGA claim as a backup in a class action because unlike class actions, a PAGA class does not have to be certified. Additionally, PAGA claims are not waivable, whereas rights to assert class action are. Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal.4th 348 (2014).
In July 2017, the PAGA claim became even more powerful. In Williams v. Superior Court, 3 Cal.5th 531 (2017) the Supreme Court of California unanimously reaffirmed the broad scope of discovery in civil litigation, and held that plaintiff was entitled the name and contact information of all of the employer’s 16,500 employees, not just those of the workers in plaintiff’s store. In doing so, the Supreme Court rejected the notion that plaintiff must first show good cause or some likelihood of success on the merits before receiving such information. It reversed the trial court’s order that plaintiff must first answer deposition questions to establish some merit to plaintiff’s action before seeking that discovery.
The upshot of Williams is that a single employee, even on a weak or frivolous case, can force an employer to engage in extensive and costly discovery, and can expand the potential liabilities to such an extent that most employers cannot bear the risk of not settling.
With respect to PAGA, the saying “the best defense is a good offense” couldn’t be more true. Some Labor Code violations are considered “not serious” and are subject to a 33 day cure period before the employee may sue. Employers should contact their counsel immediately to ensure that the violations are properly corrected within that period. But even before a suit is filed, employers can mitigate their exposure to a PAGA suit by carefully examining their policies, procedures, and practices to preemptively spot any potential Labor Code violation and take corrective action.
Whether you have been sued under PAGA, or are simply looking to avoid a PAGA suit, we can help you.