PAGA

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In the uncertain world of the California Labor Code Private Attorneys General Act (“PAGA”), employers enjoyed a significant victory in Williams v. Superior Court (Marshalls) (Ct. App. 2d Dist. May 15, 2015), Case No. B259967. In Williams, the California Court of Appeal upheld a lower court order limiting a plaintiff’s request for the names and contact information of other non-exempt employees to those employees in the plaintiff’s work location until after he had “been deposed ‘for at least six productive hours’” regarding the facts supporting his statewide allegations. Williams is a significant limitation on a plaintiff’s ability to impose burdensome discovery obligations on an employer before the plaintiff makes a factual showing that “some reason exists to suspect [the employer’s] local practices extend statewide.”
Continue Reading PAGA: Trial Court May Limit Scope Of Discovery To Plaintiff’s “Local Claims” Before Plaintiff Makes Showing Of Statewide Practices

The legal pot is really boiling these days when it comes to civil penalty claims under the Labor Code Private Attorneys General Act. Many, if not most, California class action complaints contain PAGA claims, and plaintiffs increasingly are filing so-called “pure PAGA actions” that purport to seek only civil penalties under PAGA and not wages, premiums or statutory penalties that typically are sought in class actions. Some plaintiffs reason that if they can first get a judgment for PAGA penalties, they can then invoke “collateral estoppel” to collect other remedies in a second action. This is quite an evolution from the conventional wisdom that a PAGA cause of action in a class action complaint is simply a fail-safe in the event the court refuses to certify a class.
Continue Reading PAGA’S Many Unanswered Questions

On February 27, 2015, the California Court of Appeal determined that arbitration could not be compelled in Securitas Security Services USA, Inc. v. Superior Court (Edwards). Securitas’ arbitration agreement contained a waiver provision, waiving both class actions and representative Private Attorney General Act (PAGA) actions. In addition to waiving these claims, the waiver provision expressly stated that the waiver could not be severed from the agreement. In a separate paragraph, the Agreement contained a general severability clause, providing that “in the event any portion of this Agreement is deemed unenforceable, the remainder of this Agreement will be enforceable. If the Class Action Waiver is deemed to be unenforceable, [the parties] agree that this Agreement is otherwise silent as to any party’s ability to bring a class, collective, or representative action in arbitration.”
Continue Reading No Arbitration if Invalid PAGA Waiver Cannot be Severed

On February 26, 2015, in Franco v. Arakelian Enterprises, Inc., Case No. B232583, the California Court of Appeal, Second Appellate District held that trial court proceedings on claims pursuant to the California Private Attorney General Act (“PAGA”) (Labor Code § 2698 et seq.) must be stayed pending individual arbitration of the underlying individual wage and hour claims (originally pled as classwide claims) pursuant to an arbitration agreement containing a classwide arbitration waiver.
Continue Reading California Court of Appeal Rules PAGA Claims Must Be Stayed Pending Outcome of Individual Arbitration on Underlying Individual Wage and Hour Claims

The battle over whether employees may waive the right to pursue claims under California’s Private Attorneys General Act (PAGA) in arbitration continues. The Supreme Court of the United States recently requested a response from ex-Bridgestone Retail Operations LLC employees to Bridgestone’s January 5, 2015 petition for a writ of certiorari challenging the California Supreme Court’s refusal to enforce an arbitration agreement waiving PAGA claims.
Continue Reading Enforceability of PAGA Waivers in Arbitration Agreements – The Battle Continues

The Federal Arbitration Act (“FAA”) preempts California’s Broughton-Cruz rule, which states arbitration agreements for injunctive relief claims under the state unfair competition and false advertising laws are against public policy and invalid, the California Court of Appeal has held in an insurance consumer class action, allowing arbitration to proceed. McGill v. Citibank, N.A., No. G049838 (Cal. Ct. App. Dec. 18, 2014).

This decision calls into question the continued viability of California’s Broughton-Cruz rule, which was established by the California Supreme Court in Broughton v. Cigna Healthplans, 21 Cal. 4th 1066 (Cal. 1999), and Cruz v. PacifiCare Health Systems, Inc., 30 Cal. 4th 303 (Cal. 2003).
Continue Reading Federal Arbitration Act Preempts State Arbitration Rule, California Court of Appeal Holds

With increasing frequency, California courts (especially federal district courts) are enforcing binding arbitration agreements between employers and employees.  In Richards v. Ernst & Young, No. 11-17530 (9th Cir. Aug. 21, 2013), the Ninth Circuit recently reversed a denial of the employer’s motion to compel arbitration of the employee’s wage and hour claims.  In so…

While likely subject to appeal by the plaintiff’s lawyer in the case, California employers received a welcome decision by a California Court of Appeal. The Court upheld a class action waiver in an arbitration agreement and also found the plaintiff could not bring claims under the California Private Attorney General Act (“PAGA”) in light of…