Seyfarth Shaw LLP | www.seyfarth.com Litigating CA Wage & Hour Class and PAGA Actions (23rd Edition) 97 XIII. California Labor Code Private Attorneys General Act A. General Scope of the Law The California Private Attorneys General Act of 2004 empowers private individuals to seek penalties on a representative basis for alleged Labor Code violations affecting them and other aggrieved employees. PAGA both provides employees with added financial incentives to sue and creates new penalties for Labor Code violations. Previously, some Labor Code provisions carried no civil penalty at all, and many that did call for a penalty did not provide for a private right of action. Civil penalties generally could be obtained only if the DLSE brought an enforcement action against the employer. However, PAGA drastically altered Labor Code enforcement by creating (1) new civil penalties for every provision of the Labor Code that affects employees and that did not previously have a civil penalty462 and (2) a private right of action to recover civil penalties.463 Where no civil penalty amount is expressly set forth for a specific Labor Code violation, the default PAGA penalty is $100 for each aggrieved employee per pay period for an initial violation, and $200 for every further violation.464 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.465 A PAGA plaintiff sues on their own behalf and on behalf of other current or former employees who are aggrieved.466 A union may not bring a PAGA claim on behalf of “aggrieved employees.”467 The California Supreme Court has held that PAGA claims may proceed as representative collective actions without satisfying class 462 Lab. Code § 2699(f). 463 Lab. Code § 2699(a). 464 Lab. Code § 2699(f)(2). In Amaral v. Cintas Corp., 163 Cal. App. 4th 1157, 1209 (2008), the Court of Appeal held that an “initial” violation encompassed violations covering multiple employees for multiple pay periods, up until such time as “the employer has learned that its conduct violates the Labor Code,” at which point “the employer is on notice that any future violations will be punished just the same as violations that are willful or intentional,” meaning the maximum potential penalty rate will be doubled. In Bernstein v. Virgin Am., Inc., 3 F.4th 1127, 1144 (9th Cir. 2021), cert. denied, 142 S. Ct. 2903 (2022), the Ninth Circuit held that “ ‘a good faith dispute’ that an employer is required to comply with a particular law ‘will preclude imposition of heightened penalties.” In reversing the district court’s holding that the defendant was subject to the heightened penalties, the Ninth Circuit reasoned that the defendant “was not notified by the Labor Commissioner or any court that it was subject to the California Labor Code….” Id. at 1144. 465 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). 466 At least one court 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). 467 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.”).
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