California’s Private Attorneys General Act (PAGA) — Litigation And Compliance Manual

California’s Private Attorneys General Act (PAGA) — Litigation And Compliance Manual

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Authors: Richard J. Simmons, Jason W. Kearnaghan, and Daniel J. McQueen
Publisher: Castle Publications
ISBN: 9781940747460
Pages: Over 460

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Description

Some of the most impactful changes to California law involve the Private Attorneys General Act of 2004 (“PAGA”). The law has been nicknamed the “Sue Your Boss Law” because it motivates employees to sue employers to recover substantial penalties. California employers now are hit with as many as 10 to 35 PAGA actions a day. The scope of PAGA and its impact emphasize the need to understand California’s extensive rules and commit to total compliance.

The law encourages lawsuits and discourages employees from using internal complaint procedures to resolve problems. Penalties for a single violation can equal $100 for each employee times the number of pay periods. As an example, an employer with only 100 employees could face penalties of $10,000 per pay period for just one violation. Strikingly, the penalties can be doubled for subsequent violations.

In this publication, Attorneys Richard J. Simmons, Jason W. Kearnaghan, and Daniel J. McQueen of the law firm of Sheppard, Mullin, Richter & Hampton LLP examine numerous litigation topics and compliance issues. It includes an in-depth review of the purpose and structure of PAGA, meal period, rest period, pay stub, seating and other claims, litigation strategies, damage and exposure analyses, and compliance rules. It also includes an extensive review of key cases including a chapter devoted to Supreme Court cases in the field. The authors identify proactive strategies, high risk areas, and audit topics that are designed to aid compliance efforts and reduce exposure to liability. Among the subjects covered in this publication are:

  • The Importance Of Self-Audits
  • Targets Of Audits
  • Civil Penalties & Remedies
  • Significance Of Category 1 And 2 Statutes
  • Opportunity To Cure Violations
  • Checklists & High Risk Areas
  • Liabilities
  • Penalty Rules
  • Class Action Claims
  • Exhaustion Requirements
  • One-Sided Attorney’s Fee Provision
  • Avoiding Litigation
  • Notification Rules
  • Labor Code Checklist
  • Role Of Legal Counsel
  • Litigation Strategies
  • Exhaustion Rules
  • Role Of LWDA

Additional information

Format

Both, Electronic, Print

Table Of Contents

PREFACE

CHAPTER 1          THE PRIVATE ATTORNEYS GENERAL ACT OF 2004

1.1                The Context In Which PAGA Was Enacted And Its Impact

1.2                PAGA’s Focus On Enforcement

1.3                PAGA Creates New Remedies Without Creating New Substantive Rules

1.4                The Reduced Role Of State Enforcement Agencies

1.5                PAGA’s Enforcement System

1.6                The Relevance Of California’s Class Action Requirements

1.7                Abbreviations Used In The Manual

1.8                Other Important Resources

CHAPTER 2          OVERVIEW OF PAGA

2.1                The Use Of Civil Actions To Enforce California’s Wage And Hour Laws

2.2                Law Enforcement Actions Under PAGA

2.3                Section 558 Claims Against Employers And Individuals

2.4                Minimum Wage Claims Against Employers And Individuals Under Section 1197.1

2.5                Labor Code Section 1198’s Pathway To Wage Order Enforcement

2.6                Varied Motivations For PAGA Actions

2.7                PAGA Establishes A Punishment System While Trivializing The Critical Need For Education And Information

2.8                The Statutory Structure Of PAGA

2.9                The Enactment Of PAGA And Its Amendments

2.10              Key Definitions And Rules In PAGA

2.11              Construction Employees Covered By CBAs Are Excluded From PAGA

2.12              Posting, Notice, Reporting And Filing Violations

2.13              PAGA’s Cure Provisions

2.14              PAGA Statistics

CHAPTER 3          PAGA’S EXHAUSTION, ADMINISTRATIVE AND PROCEDURAL STANDARDS

3.1                Obligations To Provide Proper Notice And Exhaust Administrative Remedies

3.2                The Categories Of Violations Identified In PAGA

3.3                Claims Based On Specified Statutes – Category 1 Statutes

3.4                Claims Based On Other Labor Code Provisions – Category 2 Statutes

3.5                Claims Based On Occupational Safety Violations

3.6                Scope Of Claims That An Aggrieved Employee Can Pursue

CHAPTER 4           REPRESENTATIVE ENFORCEMENT ACTIONS AND CLASS ACTIONS

4.1                Class Action Requirements

4.2                Distinctions Between Class Actions And PAGA Actions

4.3                The Basic Class Action Standards In The CCP

CHAPTER 5          THE CALIFORNIA SUPREME COURT’S VIEW OF PAGA

5.1                The California Supreme Court’s Perspective On PAGA

5.2                Arias v. Superior Court:  The Inapplicability Of Class Action Standards To PAGA Actions And The Effect Of PAGA Judgments

5.3                Amalgamated Transit Union, Local 1756, AFL-CIO v. Superior Court: A Labor Union Cannot Bring A PAGA Action

5.4                Iskanian v. CLS Transportation Los Angeles, LLC:  The Effect Of The FAA And Class Action Waivers

5.5                Williams v. Superior Court:  Discovery Rights In PAGA Actions

5.6                Mendoza v. Nordstrom, Inc.:  PAGA Authorizes A Representative Action Without The Need For Class Certification

5.7                ZB, N.A. v. Superior Court:  Employees Can Pursue Civil Penalties Through PAGA, But Not Unpaid Wages

CHAPTER 6          ITEMIZED WAGE STATEMENT AND PAGA CLAIMS

6.1                California’s Overlapping Wage Statement And PAGA Rules

6.2                Injunctive Relief

6.3                Payroll Companies

6.4                Government Employer Exemption

6.5                Residential Worker Exemption

6.6                Right to Inspect Or Receive A Copy Of Pay Records

6.7                Relationship With Unfair Competition Claims

6.8                PAGA’s Applicability To Pay Stub Violations

6.9                The Overlapping Regulation Of Wage Statements Under PAGA And Labor Code Section 226

CHAPTER 7          ARBITRATION OF PAGA CLAIMS

7.1                A Waiver Of The Right To Bring A PAGA Claim In Any Forum Cannot Be Enforced

7.2                PAGA Claims Cannot Be Arbitrated Absent The State’s Consent

CHAPTER 8          LITIGATION CONSIDERATIONS

8.1                Removal And The Class Action Fairness Act

8.2                The Complexity Of PAGA Actions

8.3                PAGA Discovery – Obtaining Aggrieved Employee Contact Information

8.4                The Need For An Adequate Trial Plan

8.5                Some PAGA Actions Are Unmanageable

8.6                Roles Of Judge vs. Jury

8.7                Bifurcation Of Trials

8.8                Court’s Role In PAGA Penalty Awards

8.9                Establishing A Right To PAGA Penalty Recoveries

8.10              Burden of Proof

8.11              Claims That May Be Brought Under PAGA

CHAPTER 9          REMEDIES

9.1                Penalties Recoverable Under PAGA

9.2                Recovery Of Penalties vs. Victim-Specific Relief

9.3                Courts Have Discretion To Award Lesser Penalties

9.4                Injunctive Relief

9.5                The Effect Of A PAGA Judgment

9.6                The Scope Of PAGA Judgments

CHAPTER 10        DEFENSES IN PAGA LITIGATION

10.1              Failure To Exhaust

10.2              Statutes Of Limitations

10.3              Lack Of Standing And Lack Of Violation

10.4              Other Defenses

CHAPTER 11        SETTLEMENT OF LABOR CODE AND PAGA CLAIMS

11.1              PAGA’s Statutory Framework On Settlement

11.2              Factors Courts Consider When Reviewing PAGA Settlements

11.3              The Res Judicata Impact Of A PAGA Settlement

11.4              Where The Named Plaintiff Has Settled On An Individual Basis

11.5              Using Individual Settlements With Employees To Resolve Claims

CHAPTER 12        APPEALS

12.1              Appeals In PAGA Actions

12.2              The Death Knell Doctrine Does Not Apply Where A Representative PAGA Claim Remains Pending In The Lawsuit After Class Certification Is Denied

12.3              Even If The Death Knell Doctrine Does Not Apply, A Reviewing Court Has The Discretion To Consider The Merits Of A Premature Appeal By Treating It As A Writ

12.4              A Defendant May Not Appeal An Adverse PAGA Ruling Until A Final Judgment In The Case Is Issued

12.5              PAGA Claims Are Subject To An Automatic Bankruptcy Stay

12.6              The LWDA’s Decision On A Cure Dispute May Be Appealed To The Appellate Division Of The Superior Court

CHAPTER 13        COMPLIANCE AUDITS

13.1              The Legislature’s Emphasis On Compliance

13.2              The Importance Of Self Audits

13.3              Audit Process And Subjects

13.4              Need For Legal Counsel

CHAPTER 14        LABOR CODE CHECKLISTS AND SUMMARIES

14.1              The Pursuit Of Penalties Under The PAGA

14.2              Labor Code Checklist

14.3              High Risk Areas

CHAPTER 15        ADDITIONAL TARGET AREAS FOR AUDITS

CHAPTER 16        LEAVES OF ABSENCE AND TIME OFF RIGHTS

16.1              Overview

16.2              Audit Issues

16.3              Additional Resources

CHAPTER 17        POSTING AND NOTIFICATION OBLIGATIONS

APPENDIX A        THE LABOR CODE PRIVATE ATTORNEYS GENERAL ACT OF 2004 Labor Code §§ 2698 – 2699.6

APPENDIX B        SB 796 — THE PRIVATE ATTORNEYS GENERAL ACT OF 2004 (Signed October 12, 2003)

APPENDIX C        SENATE RULES COMMITTEE REPORT ON SB 796 (September 11, 2003)

APPENDIX D        ASSEMBLY FLOOR ANALYSIS OF SB 796 (September 2, 2003)

APPENDIX E        SB 899 (Signed April 19, 2004)

APPENDIX F        SB 1809 (Signed August 11, 2004, As An Urgency Statute)

APPENDIX G        ASSEMBLY FLOOR ANALYSIS OF SB 1809 (July 29, 2004)

APPENDIX H        SENATE RULES COMMITTEE REPORT ON SB 1809 (July 29, 2004)

APPENDIX I         SB 940 (Effective January 1, 2009)

APPENDIX J         AB 1506 (Effective October 2, 2015)

APPENDIX K        SB 836 (Effective January 1, 2016)

APPENDIX L        AB 235 (Stats. 2018, Ch. 704518) (Effective September 22, 2018)

APPENDIX M       AB 1654 (Effective January 1, 2019)

APPENDIX N        FORMS OF LABOR & WORKFORCE DEVELOPMENT AGENCY

APPENDIX O        LOS ANGELES COUNTY SUPERIOR COURT FORM CREATED TO EVALUATE CLASS ACTION SETTLEMENTS

APPENDIX P        LOS ANGELES COUNTY SUPERIOR COURT CLASS ACTION CASE MANAGEMENT ORDER

APPENDIX Q        LABOR CODE INDEX

APPENDIX R        CASE TABLE

SUBJECT INDEX

About The Authors

Richard J. Simmons is a Partner in the law firm of Sheppard, Mullin, Richter & Hampton LLP in Los Angeles. He represents employers in various employment law matters involving litigation throughout the country and general advice regarding state and federal wage and hour laws, employment discrimination, wrongful discharge, employee discipline and termination, employee benefits, affirmative action, union representation proceedings, and arbitrations. Mr. Simmons received his B.A., summa cum laude, from the University of Massachusetts, where he was a Commonwealth Scholar and graduated in the Phi Kappa Phi Honor Society. He received his J.D. from Berkeley Law at the University of California at Berkeley where he was the Editor-in-Chief of the Industrial Relations Law Journal, now the Berkeley Journal of Employment and Labor Law.

Mr. Simmons argued the only case before the California Supreme Court that produced a victory for employers and business in 2018. He was recently recognized as the Labor and Employment Attorney of the Year by the Los Angeles Business Journal and was inducted into the Employment Lawyers Hall of Fame. He has lectured nationally on wage and hour, employment discrimination, wrongful termination, and other employment and labor relations matters. He is a member of the National Advisory Board to the Berkeley Journal of Employment and Labor Law, published by Berkeley Law at the University of California at Berkeley. He was also appointed by the California Industrial Welfare Commission as a member of three Minimum Wage Boards for the State of California.

Daniel J. McQueen is a Partner with Sheppard, Mullin, Richter & Hampton LLP in the firm’s Los Angeles Office. Mr. McQueen handles all facets of the litigation process in labor and employment disputes. Mr. McQueen has jury trial experience; has taken and defended numerous depositions; written and argued motions for summary judgment; and provided advice on human resources and personnel issues. He has been involved in labor and employment disputes under both state and federal law, including discrimination on the basis of race, sex, age, religion, disability, gender identity and sexual orientation. He has specific experience under the California Fair Employment and Housing Act, Title VII, the Age Discrimination in Employment Act, the Americans with Disabilities Act, the Family Medical Leave Act, and other labor and employment laws.

Mr. McQueen has significant experience in defending wage and hour class actions, including claims for overtime pay, meal and rest period violations, and vacation pay. In particular, Mr. McQueen has represented restaurants, retailers, hospitals, and grocery store chains in the defense of wage and hour class actions.

Mr. McQueen received his undergraduate degree from Occidental College and graduated from the University of California, Los Angeles, School of Law. He is admitted to practice in all California State Courts, along with the United States District Court for the Central District of California.

Jason W. Kearnaghan is a Partner with Sheppard, Mullin, Richter & Hampton LLP in the firm’s Los Angeles Office. Mr. Kearnaghan represents employers in state and federal courts with respect to all facets of employment law including wrongful discharge, employment discrimination, retaliation, sexual harassment, and hostile work environment. Jason also represents clients before state and federal administrative agencies, such as the Department of Labor, the Equal Employment Opportunity Commission, the California Department of Fair Employment and Housing, the Division of Labor Standards Enforcement, and the National Labor Relations Board.

In addition to co-authoring the California’s Private Attorneys General Act (PAGA) Litigation and Compliance Manual, Jason is a skilled presenter for a number of legal updates and other speaking engagements in Southern California.

Mr. Kearnaghan received his J.D. degree from the University of San Diego School of Law and his B.A. from the University of California at Santa Barbara. Prior to joining Sheppard Mullin, Jason served in the United States Navy Judge Advocate General’s Corps as a trial attorney in criminal prosecution.