Thousands of claims were initiated during the pandemic under the Private Attorneys General Act of 2004 (“PAGA”). This occurred while thousands of businesses were reeling from Stay-At-Home mandates and devastating economic blows. The government has exhibited no sympathy for employers despite the fact that PAGA has operated as a get-rich-quick goldmine for plaintiffs’ attorneys, a devastating weapon against struggling employers, and an odd statute that allows the State to share in 75% of any penalties recovered.
The thousands of employers who have faced PAGA claims agree that PAGA has become the worst enemy for employers in the Labor Code. By allowing current and former employees to act as “private attorneys general” and seek a percentage of all penalties recovered based on hundreds of provisions in the Labor Code, the law has been nicknamed the “Bounty Hunter Law” and the “Sue Your Boss Law” because it motivates employees to sue employers instead of filing grievances. California employers are now 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. In fact, an individual who experiences any alleged Labor Code violation can bring a PAGA action on behalf of other employees who are claimed to have experienced a violation of the same or any different statutory violation. And, employees can bring PAGA actions without having to satisfy the basic standards necessary to pursue a class action.
PAGA penalties for a single Labor Code violation can equal $100 for each employee times the number of pay periods for which the violation lasts. As an example, an employer with 100 employees could face penalties of $10,000 per pay period for just one violation. If the employer uses a weekly pay period and the violation lasts a year, the penalties could be $520,000. Strikingly, the penalties can double for subsequent violations. Worse yet, the statute is entirely one-sided so employees who win are assured recovery of their attorneys’ fees even though employers can never recover their fees under PAGA, even if a case is proved to be baseless.
In this publication, Attorneys Richard J. Simmons, Daniel J. McQueen, and Ryan J. Krueger from the law firm of Sheppard, Mullin, Richter & Hampton LLP examine PAGA from top to bottom. In addition to reviewing every section of the law, the book delves deeply into the cases that have construed it, the hurdles that employees must exhaust before filing a lawsuit, litigation strategies, defenses, the effect of arbitration agreements on PAGA actions, 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, trial strategies, damages and remedies.
The publication emphasizes compliance rules and includes a number of checklists. One checklist allows employers to audit their policies and practices. It also provides an extensive review of key cases, including a chapter devoted to the Supreme Court cases in the field since 2004. The authors identify proactive strategies, high risk areas, and valuable guidance designed to aid compliance efforts and reduce exposure to liability.
Among the subjects covered in this publication are:
- The View Of PAGA From The California Supreme Court
- The Importance Of Self-Audits
- The Need To Exhaust Administrative Remedies Before Filing Lawsuits
- Civil Penalties & Remedies
- The Effect Of Arbitration Agreements And Class Action Waivers On PAGA Actions
- The Authority Of Courts To Lower Penalties
- Factors Considered When Awarding Penalties
- Common PAGA Claims Regarding Meal Periods, Rest Periods, And Other Issues
- Suitable Seating Cases
- Significance Of Category 1 And 2 Statutes
- Opportunity To Cure Violations
- Checklists & High Risk Areas
- Penalty Rules
- Combining PAGA And Class Action Claims In A Single Lawsuit
- The Effect Of PAGA Actions On Appeals Based On The Death Knell Doctrine
- The Distinctions In PAGA-Only Actions
- One-Sided Attorney’s Fee Provision
- Statutes Of Limitations In PAGA Cases
- Avoiding Litigation
- The Effect Of Individual Settlements On PAGA Standing
- The Role Of The State And Courts In PAGA Settlements
- Notification Rules
- Labor Code Checklist
- Role Of Legal Counsel
- Litigation Strategies
- Role Of LWDA
- The Issues Associated With Chindarah v. Pick Up Stix Settlements