In a departure from decisions in recent years, the California high court has finally imposed some limits on the otherwise expansive reach of the Private Attorneys General Act, Labor Code § 2698, et seq. (“PAGA”). The legislation from 2002 allows one “aggrieved” employee to bring a representative action on behalf of all employees to collect penalties for certain Labor Code violations.
The Supreme Court has held: that a PAGA actions does not requires class certification (Arias, 2009); that a PAGA representative action (unlike a class action) cannot be waived in an arbitration agreement (Iskanian, 2012); that the PAGA plaintiff need only be “aggrieved” for one of the alleged violations (Huff, 2018); and that the plaintiff is entitled to contact information for all of the alleged aggrieved employees early in the case (Williams, 2017).
The issue in Zions Bancorp v. Superior Court was whether, in addition to PAGA penalties, the plaintiff could also recover lost wages for the underlying Labor Code violations. The unanimous Court said “No.” The plaintiff sought PAGA civil penalties under Section 558 of the Labor Code for failure to pay overtime ($50 for first pay period; $100 for subsequent pay periods). The plaintiff also sought an additional “amount sufficient to recover underpaid wages” that the Labor Commissioner is authorized to collect under section 558. The Court held that the “additional amount” sought was not properly considered part of a PAGA recovery, because that amount “is not a civil penalty that a private citizen has authority to collect through the PAGA.”
Takeaway: PAGA still remains a potent weapon for plaintiffs who want to avoid arbitration or to pursue class-type claims without having to meet the procedural requirements of a class action. So while employer victories before the California Supreme Court have been rare in recent years, your celebration should be muted. If you stop paying attention to the numerous Labor Code violations that can give rise to PAGA claims, you’re in for a nasty hangover.