104 Litigating CA Wage & Hour Class and PAGA Actions (24th Edition) Seyfarth Shaw LLP | www.seyfarth.com time penalties where employers willfully fail to pay terminating employees all wages owed to them). Employers began to argue that no employee could sue to recover penalties under any statute listed in Section 2699.5 without first exhausting administrative remedies. The 2004 decision in Caliber Bodyworks v. Superior Court516 clarified the scope of the requirement to exhaust administrative remedies under PAGA. The Court of Appeal held that the requirement to exhaust administrative remedies applies only to actions seeking to recover a “civil penalty,” as distinguished from actions that could be advanced by individuals to recover “statutory penalties,” such as Labor Code section 203. In short, the Court held that if a plaintiff seeks to recover penalties that were available under a statute and recoverable by an individual before PAGA’s passage, then the employee can still recover such statutory penalties without exhausting administrative remedies under PAGA.517 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.”518 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.519 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.”520 In 2019, the California Supreme Court in ZB, N.A. v. Superior Court521 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. Even if it is theoretically possible to obtain an award of civil penalties on 516 Caliber Bodyworks v. Superior Court, 134 Cal. App. 4th 365 (2005). 517 Id. at 377-78. The Court of Appeal reached the same result again in Dunlap v. Superior Court, 142 Cal. App. 4th 330 (2006). 518 Lab. Code § 2699(f). 519 Lopez v. Friant & Associates, LLC, 15 Cal. App. 5th 773 (2017). 520 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). 521 ZB, N.A. v. Superior Court, 8 Cal. 5th 175 (2019).
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