Cal-Peculiarities: How California Employment Law is Different 2022 Edition

©2022 Seyfarth Shaw LLP  www.seyfarth.com 2022 Cal-Peculiarities | 119 federal standard would not “result in unfairness under California law” and would contribute to a more “efficient and economical class action procedure. ” 373 M oreover, the plaintiff’s preference—tolling limitations in successive class claims—could result in endless tolling so long as new named plaintiffs successively come forward to promptly file new class complaints whenever class certification is denied, and there is “no basis under California law for potentially unlimited tolling” of limitations periods for class claims . 374 In Montoya v. Ford Motor Company (2020), the California Court of Appeal reached the same conclusion and applied the holding in China Agritech . There, a plaintiff filed a class action lawsuit six years after the statute of limitations had expired . 375 T he plaintiff argued that his class action claims were timely, based on tolling of the earlier two class actions—certification was denied in the first class action, and a class action settlement was reached in the second case where the plaintiff opted out . 376 In resolving the tolling issue, Montoya agreed with China Agritech and concluded that “multiple tolling periods cannot be ‘stacked’ here to extend a statute of limitations. ” 377 M ontoya noted that both federal and state case authorities have uniformly held that tolling for individual claims may be available, but tolling for class action claims is not available . 378 M ontoya explained: “Tolling during a second class action–particularly this second class action– defeats the objectives of judicial economy and efficiency that were the foundations of American Pipe . It overlooks the problem of endless tolling that informed and suffused the China Agritech opinion. ” 379 5.15 PAGA Civil Penalty Claims for Labor Code Violations California’s Labor Code Private Attorneys General Act of 2004 (PAGA) is a bane to employers and a boon to the plaintiffs’ bar. PAGA is perhaps the California peculiarity par excellence. It has no precise precedent or analog in the American legal system, although recently other states have contemplated their own similar statutes. PAGA’s stated purpose is to enlist employee plaintiffs to stand in for the California Labor Commissioner to enforce the Labor Code, on the rationale that the Labor Commissioner lacks the resources to enforce the law and that, without PAGA, the level of law enforcement and the level of civil penalties would fail to deter employers from breaking labor laws. (For those who remember their maritime history, PAGA may bring to mind the letter of marque—a governmental license issued to enterprising ship captains that authorized them to fit out an armed vessel to capture enemy merchant shipping, through acts that otherwise would constitute piracy. Today’s PAGA pirates are enterprising plaintiffs’ lawyers who use PAGA as a vehicle to extract large settlements that often depend on hypertechnical, trivial violations of the Labor Code. Indeed, one prominent PAGA plaintiffs’ lawyer has a personalized license plate—”MR PAGA”—on his Rolls Royce.) PAGA aims to fix these perceived problems by authorizing employees to sue in the Labor Commissioner’s stead to seek civil penalties that go to the state and to “aggrieved employees,” with 75% of penalties going to the state and 25% of penalties going to the aggrieved employee s. 380 As interpreted by California courts, PAGA permits any current or former employee of a California company to sue the company on behalf of all “aggrieved employees.” The PAGA action can seek massive civil penalties for virtually all violations of the Labor Code—no matter how trivial the violation and regardless of any actual injury— so long as the plaintiff can claim a single violation. A current or former employee becomes a PAGA plaintiff simply by sending a letter to the LWDA and the employer to notify them of the alleged Labor Code violations and then waiting for 65 days to see if the LWDA itself will take action (which it almost never does) . 381 O nce the LWDA fails to act, the employee is free to sue, ostensibly on behalf of the LWDA and the other “aggrieved employees. ” 382