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

120 | 2022 Cal-Peculiarities ©2022 Seyfarth Shaw LLP  www.seyfarth.com Plaintiffs’ lawyers like to bring PAGA actions because  PAGA creates private rights of action to sue for Labor Code violations that previously only the Labor Commissioner could address,  PAGA creates massive, unlimited civil penalties and multiplies potential liability still further because it empowers employees to sue on behalf of others as well as themselves, and because in doing so they need not meet the requirements of a class action,  PAGA enables a plaintiff affected by one violation to seek penalties for all violations affecting other employees, and not just those violations that personally affected the plaintiff,  PAGA can enable plaintiffs to sue for civil penalties for themselves and other aggrieved employees even if the plaintiffs have agreed to dismiss their own individual Labor Code claims,  PAGA enables massive discovery of private information such as the contact information of a company’s employees, and  arbitration agreements waiving representative PAGA claims are unenforceable. PAGA suits have powerfully proliferated since PAGA’s early days, especially when plaintiffs’ counsel discovered that PAGA actions were immune to arbitration agreement s 383 a nd that PAGA-only actions cannot be removed to federal court. While the annual number of PAGA notices sent to the LWDA remained under 700 during the first four years of PAGA’s existence, annual LWDA notices numbered in a much higher range—from 1,338 to 2,001— during 2008-2013, and then jumped to a range of 4,225 to 5,732 per year during 2014-2018. The year 2019 saw a record number of LWDA notices: 6,431. A 2021 development further incentivizing PAGA actions was a Court of Appeal decision holding that venue is proper for a PAGA action in any California county where Labor Code violations allegedly occurred, even if the defendant’s principal place of business is not in that county and even though the plaintiff never worked there. Noting that a PAGA plaintiff is suing as the State of California’s designated proxy, the Court of Appeal stated: “We see no reason why the Legislature would restrict the proper venue to the location of an individual employee when she is suing on behalf of all aggrieved employees, not herself, and she has no individual claim. ” 384 5.15.1 The PAGA legislation When federal and state governments create civil penalties for certain statutory violations, the mission of enforcing these penalties is typically entrusted to public officials who exercise prosecutorial discretion. In California it’s different. PAG A 385 c reated two significant problems for California employers. First, as of 2004, new civil penalties apply to violations of all Labor Code provisions “except those for which a civil penalty is specifically provided.” (See § 7.25.2. ) 386 Second, “aggrieved employees ” 387 m ay sue, in lieu of the Labor Commissioner, to recover the civil penalty, with the plaintiff and other aggrieved employees to collect 25% of the penalties (the remainder going to the state) . 388 T he prevailing plaintiff also can recover costs and attorney fee s. 389 Recovery of civil penalties is not available, however, if the LWDA or its agencies or employees already have cited the same facts and theories to seek penalties . 390 The California Supreme Court enhanced PAGA’s power still further in 2009, when it held that PAGA authorizes individuals to sue under PAGA without having to satisfy the requirements of a class action, on the rationale that “an action to recover civil penalties ‘is fundamentally a law enforcement action designed to protect the public and not to benefit private parties.’ ” 391