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Hold On Tight: California Supreme Court Gives Employees A Big PAGA Win On Class Action Type Wage and Hour Claims

Just in case employers needed another reason to tighten wage and hour policies, yesterday the California Supreme Court in Williams v. Superior Court of Los Angeles, CASC, DAR p. 6879, issued yet another decision making large scale employment lawsuits likely to spike as aggrieved employees bring big claims under California Labor Code section 2698 et. seq , the state’s Private Attorney General Act (PAGA) for Labor Code violations.

PAGA allows an aggrieved employee the right to pursue civil penalties on behalf of the State of California.  And under PAGA, the employee can collect and keep 25% of fines that would ordinarily only be collectable by the state.  In addition, the employee can pursue penalties for violations on behalf of other current or former employees who were similarly situated, making it similar to a class action.

In Williams, the California Supreme Court ruled on the scope of discovery available to an employee in a potential PAGA wage and hour suit.  Williams, who was an employee of retail company Marshalls, sought to discover the identity of all of Marshalls’ store employees statewide, in order to pursue penalties on their behalf.  The Court of Appeal upheld the trial court’s determination that the employee could only have access to the names of employees in the plaintiff’s own location.  By holding that a PAGA plaintiff’s access to this discovery was limited, the Court of Appeal essentially capped the size of a putative class in a PAGA action.  Not so anymore.

In a blow to employers, the Supreme Court overturned the Court of Appeal’s decision yesterday, holding that PAGA discovery was not so limited and the employee was entitled to the identity of all employees statewide.  Thus, an employee bringing a PAGA action can now identify, and thereby seek and collect state fines on behalf of, a much larger pool of employees.  With fines as high as $100 per employee, per pay period (for an initial violation) and $200 per employee per pay period (for each subsequent violation), there is a huge price to pay for Labor Code violations.  The decision in Williams just made it easier for employees to cash in.

By:   Sarah A. Perry

Sarah Perry is an Associate Attorney with Hunt Ortmann. Ms. Perry’s practice focuses on all aspects of complex business litigation with an emphasis on construction disputes to provide a full range of transactional and litigation services to her clients.

 

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