PAGA

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A California federal judge recently certified a class of at least 843 Cinemark workers who allege Cinemark, a movie theater chain, failed to properly list overtime rates on employee wage statements, notwithstanding the fact that the purported class representative, Silken Brown, had settled her individual claim during the pending litigation. In opposing class certification, Cinemark…

The U.S. Supreme Court’s recent ruling that class action waivers in employment arbitration agreements are enforceable under the Federal Arbitration Act (FAA) does not extend to claims under the California Private Attorneys General Act (PAGA). Epic Systems Corp. v. Lewis, No. 16-285; Ernst & Young LLP et al. v. Morris et al., No. 16-300; National …

A decision out of the Northern District of California serves as a reminder that service industries need to carefully balance their commitment to client care with wage and hour obligations. A case manager at a large medical facility filed a class action claim under the California Private Attorneys General Act (“PAGA”) against the facility for…

In Hamid H. Khan v. Dunn-Edwards Corporation (January 4, 2018), the California Court of Appeal for the Second Appellate District held that the plaintiff failed to comply with required administrative procedures prior to bringing a claim under the California Private Attorneys General Act (“PAGA”) because he failed to provide sufficient notice to the California Labor…

In Lawson v. ZB, N.A. (2018) 18 Cal.App.5th 705, California’s Fourth District Court of Appeal recently ruled that the two elements comprising damages under Labor Code § 558 – (a) underpaid wages and (b) denominated assessments – are indivisible. Because a claim under Labor Code § 558 is indivisible and it is a civil penalty…

In Kim v. Reins International California, Inc. (B278642, Cal. Ct. App., December 29, 2017), the Court of Appeal for the Second Appellate District addressed for the first time the question of whether an employee-plaintiff, who had settled and dismissed his individual claims under the Labor Code against his employer, was able to maintain a…

On January 7, 2016, Governor Brown’s office submitted a 22-page Budget Change Proposal for 2016-2017 (http://web1a.esd.dof.ca.gov/Documents/bcp/1617/FY1617_ORG7350_BCP474.pdf) in an effort to “stabilize and improve the handling of Private Attorneys General Act cases.”

Background

Enacted in 2003, the Private Attorneys General Act (PAGA) enables private parties to recover penalties for certain Labor Code violations that could previously only be pursued by the Labor Commissioner or other divisions within California’s Department of Industrial Relations (DIR). Following a 2004 amendment, PAGA requires employees or their representatives to initiate a case by first sending written notice to the employer and the Labor and Workforce Development Agency (LWDA) identifying the alleged violations and setting forth specific supporting facts. 
Continue Reading State Budget Proposal Seeks to Reduce PAGA Litigation Through Increased State Oversight

The budget change proposal for the 2016/17 Fiscal Year [document: <http://web1a.esd.dof.ca.gov/Documents/bcp/1617/FY1617_ORG7350_BCP474.pdf>] submitted by Governor Brown last month contains significant proposed changes to the operation of the Labor & Workforce Development Agency (“LWDA”), the agency responsible for overseeing the Private Attorney Generals Act of 2004 (“PAGA”)   including the creation of a “PAGA Unit” with the authority to intervene and object to the adequacy of the settlement funds designated to PAGA claims. The budget requests a $1.6 million increase to the operation budget to cover additional staffing needs for the agency and an additional $1.5 million going forward to “stabilize and improve the handling of PAGA cases.”  The budget proposal justifies the request for additional resources to increase the LWDA’s effectiveness.
Continue Reading Governor Brown’s Proposed PAGA Unit May Have Power to Challenge PAGA Settlement in Court

An amendment to California’s Labor Code Private Attorneys General Act of 2004 (“PAGA”) affords an employer the right to cure certain wage statement violations before an employee may bring a civil suit against the employer.

This is a win for employers. The amendment, AB 1506, provides employers the right to cure a violation of failing to provide its employees with a wage statement containing the inclusive dates of the pay period and the name and address of the legal entity that is the employer, as required under California Labor Code section 226(a). The amendment, signed by Governor Jerry Brown on October 2, 2015, is effective immediately.
Continue Reading Representative PAGA Law Allows Curing of Certain Wage Statement Violations

Declining to enforce a representative action waiver contained in an arbitration agreement, the Ninth Circuit Court of Appeals, in San Francisco, has held that the Federal Arbitration Act (“FAA”) does not preempt California’s “Iskanian rule,” which prohibits waiver of representative claims under the state Private Attorneys General Act of 2004 (“PAGA”), Cal. Lab. Code § 2698 et seq. Sakkab v. Luxottica Retail North America, Inc., No. 13-55184 (9th Cir. Sept. 28, 2015).

The PAGA “authorizes an employee to bring an action for civil penalties on behalf of the state against his or her employer for Labor Code violations committed against the employee and fellow employees, with most of the proceeds of that litigation going to the state.” Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal.4th 348, 360 (2014). Thus, a PAGA claim is a type of government enforcement action where the representative employee acts as the state’s proxy.Continue Reading California Ban on Waiver of Representative PAGA Claims Not Barred by Federal Arbitration Act, Federal Court Holds