104 Litigating CA Wage & Hour Class and PAGA Actions (23rd Edition) Seyfarth Shaw LLP | www.seyfarth.com Although not at issue in Caliber Bodyworks, the Court’s holding that statutory penalties differ from “civil penalties” arguably expanded the scope of PAGA beyond what had been understood. PAGA creates a new civil penalty for every Labor Code violation that did not previously trigger a “civil penalty.”504 If statutes that always provided for a statutory penalty (e.g., Labor Code section 203) are not statutes that provide for a “civil penalty,” then an employee arguably can recover PAGA penalties in addition to the penalties already available under those statutes. The Court of Appeal in Lopez v. Friant & Associates, LLC applied similar reasoning to seemingly lessen the standard for recovering penalties for technical wage statement violations.505 The Lopez plaintiff sought to recover PAGA penalties under Labor Code section 226(a) based on wage statements that did not show the last four digits of employees’ social security numbers. The trial court granted summary judgment to the employer because the plaintiff did not suffer any injury resulting from a knowing and intentional violation, as required by Section 226(e). Lopez reversed, holding that “[b]ecause section 226(e)(1) sets forth the elements of a private cause of action for damages and statutory penalties, its requirement that a plaintiff demonstrate ‘injury’ resulting from a ‘knowing and intentional’ violation of section 226(a) is not applicable to a PAGA claim for recovery of civil penalties.”506 Caliber Bodyworks leaves open the possibility that PAGA creates no new civil penalty for those Labor Code provisions that do not themselves provide for a civil penalty, but for which civil penalties may be recovered under a separate Labor Code provision.507 An employer also can argue that even “statutory penalties” available for violations of particular Labor Code sections preclude creation of additional PAGA penalties for violations of the same section. In Ruelas v. Costco,508 Seyfarth Shaw persuaded a federal district court that PAGA did not create additional penalties for an asserted violation of the Section 512 requirement that employers provide meal breaks. The court reasoned that Section 226.7(c) already provided a penalty (one hour of pay) for a meal break violation, and that PAGA was not intended to create an additional penalty for the same violation and thus a windfall by double recovery for the plaintiff. In 2019, the California Supreme Court in ZB, N.A. v. Superior Court509 held that an individual may not use PAGA to recover unpaid wages as a remedy under Labor Code section 558. ZB held that the wages remedy under Section 558(a)(3), as opposed to the penalties available under Section 558(a)(1)-(2), is not a civil penalty and thus is not recoverable in a PAGA action. 504 Lab. Code § 2699(f). 505 Lopez v. Friant & Associates, LLC, 15 Cal. App. 5th 773 (2017). 506 Id. at 784; accord Raines v. Coastal Pacific Food Distributors, Inc., 23 Cal. App. 5th 667 (2018) (holding that while an actual injury must be shown for an individual claim brought under 226(e), a showing of injury or a “knowing and intentional violation” are not required for a PAGA claim); see also McKenzie v. Federal Express Corp., 765 F. Supp. 2d 1222 (C.D. Cal., 2011) (judgment entered against defendant for PAGA penalties where violation under Section 226 is established; injury need not be shown). 507 See, e.g., Lab. Code § 256 (providing a separate civil penalty previously recoverable only by the DLSE for violations of Labor Code section 203); Lab. Code § 210 (providing a separate civil penalty recoverable only by the DLSE for violations of Labor Code sections 204, 204b, 204.1, 204.2, 205, 205.5, and 1197.5). 508 Ruelas v. Costco Wholesale Corp., 2015 WL 1359326 (N.D. Cal. March 25, 2015). 509 ZB, N.A. v. Superior Court, 8 Cal. 5th 175 (2019).
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