74 Litigating CA Wage & Hour and Labor Code Class Actions (22nd Edition) Seyfarth Shaw LLP | www.seyfarth.com The law provides that any award of civil penalties is payable as follows: 75% to the Labor and Workforce Development Agency, and 25% to the aggrieved employees.434 A PAGA plaintiff sues on their own behalf and on behalf of other current or former employees who are aggrieved.435 A union may not bring a PAGA claim on behalf of “aggrieved employees.”436 The California Supreme Court has held that PAGA claims may proceed as representative collective actions without satisfying class certification requirements.437 In so holding, the Court stated that because a PAGA suit is analogous to a suit brought by a government agency on behalf of the public interest, there is no need to satisfy class certification requirements.438 In similar vein, the Court of Appeal recently confirmed that there is no right to a jury trial for PAGA claims, because “PAGA is not a garden variety civil penalty action” and instead “ contains several unique features that … make it unlike any pre-1850 common law action.”439 Indeed, as the PAGA plaintiff stands in for the state, the plaintiff need not bring the action in the jurisdiction where the plaintiff worked or where the employer’s principal place of business is located; rather, the plaintiff can file the lawsuit in any venue where any allegedly aggrieved employee worked.440 Furthermore, as initially drafted, PAGA contained no requirement that the plaintiff exhaust administrative remedies before filing suit. However, PAGA now requires exhaustion of administrative remedies as a result of amendments adopted in August 2004. Seyfarth Shaw has estimated that PAGA created a new right to recover penalties on more than 100 Labor Code provisions, several of which are quite obscure. Even though the limitations period for a penalty claim is only one year,441 the effect of these penalty provisions can be significant. Suppose, for example, that an employer of 150 employees is sued for a repeated violation of some obscure Labor Code section, and the violation affected each employee over the course of one year—during each of 26 biweekly pay periods. In this example, the employer could be subject to penalties of more than $700,000.442 Because violations will be punished just the same as violations that are willful or intentional,” meaning the maximum potential penalty rate will be doubled. 434 Lab. Code § 2699(i). These civil penalties must be distributed to all “aggrieved employees,” and may not be retained solely by the named plaintiff. Moorer v. Noble L.A. Events, 32 Cal. App. 5th 736, 741-742 (2019). 435 At least one court has held that the employee does not sue on behalf of the state. Waisbein v. UBS Financial Services Inc., 2008 WL 753896 (N.D. Cal. Mar. 19, 2008). It appears that this holding was overruled by Arias v. Superior Court, 46 Cal. 4th 969 (2009). Furthermore, in Reyes v. Macy’s, Inc., 202 Cal. App. 4th 1119, 1123 (2011), the Court of Appeal held that a plaintiff “may not ... bring the PAGA claim as an individual claim, but ‘as the proxy or agent of the state’s labor law enforcement agencies.’” (quoting Arias, 46 Cal. 4th at 986). 436 Amalgamated Transit Union v. Superior Court, 46 Cal. 4th 993 (2009). Indeed, the Ninth Circuit has held that a PAGA claim can never proceed as a class action, even if the PAGA claim was pleaded as a class action. Canela v. Costco Wholesale Corp., 971 F.3d 845, 854 (9th Cir. 2020) (“[T]he question is whether a PAGA cause of action could have ever, as a matter of law and without any need for discovery into the facts, been filed as a class action. On the face of the Complaint, we hold that it could not have been.”). 437 Arias, 46 Cal. 4th at 969. 438 Id. at 987. 439 LaFace v. Ralphs Grocery Co., 75 Cal. App. 5th 388, 400 (2022), review denied (May 11, 2022). 440 Crestwood Behavioral Health v. Sup. Ct., 60 Cal. App. 5th 1069 (2021). 441 Code Civ. Proc. § 340(a) (one-year statute of limitations on statutes to recover a penalty); Brown v. Ralph’s Grocery Co., 28 Cal. App. 5th 824, 839 (2018). 442 $15,000 ($100 x 150 employees) for the first pay period and then $30,000 for each of the 25 following pay periods, if the $200 penalty is found to apply for all later pay periods. However, where an employer has a good faith belief that its
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