Enacted in 2004, California’s Private Attorneys General Act (“PAGA”) authorizes aggrieved employees to file lawsuits to recover civil penalties on behalf of themselves, other employees, and the State of California for Labor Code violations. Although only 25% of the amount recovered can be retained by the aggrieved employees with 75% going to the Labor and Workforce Development Agency, PAGA has become a tool commonly used by plaintiffs to attempt to inflate even minor claims beyond reasonable value.  Although the Legislature has made minor changes to the law over the years, it is clear that further change is needed.  Indeed, two recent judicial opinions demonstrate that interpreting California’s Private Attorneys General Act is still very much under construction. 

For example, in July 2021, the Court of Appeal in Johnson v. Maxim Healthcare Services, Inc. (2021) 66 Cal.App.5^th 924, found that an employee whose individual Labor Code claims are time-barred may still pursue a representative PAGA claim.  In this somewhat unusual case, the plaintiff claimed that the employment agreement she signed three years earlier violated Labor Code section 432.5 because it had a non-competition clause. She therefore sought to represent all similarly aggrieved employees who had signed similar agreements. In holding for the plaintiff, the court reasoned that as long as the employee was “aggrieved” at some point, that employee has standing to bring a PAGA action because these actions are in theory being brought on behalf of the Labor Commissioner. Relying on Kim v. Reins International California, Inc. (2020) 9 Cal.5^th 73, the court held that PAGA standing does not depend on maintaining an individual Labor Code claim.     

This decision seemingly expands the statute of limitations for representative plaintiffs for an indeterminate length of time. Based on the court’s ruling, it appears that any representative plaintiff may bring a PAGA claim at any time, as long as (1) the representative plaintiff was aggrieved during his or her employment; and (2) there are current employees of the employer who are aggrieved for the same or similar violations.  While it does not expand the one-year liability period applicable to PAGA claims, this case increases the number of former employees who can bring a PAGA claim against their former employers.

Only two months later, however, the Court of Appeals provided employers with a small silver lining regarding PAGA manageability. In Wesson v. Staples the Office Superstore, LLC (Sept. 9, 2021) 68 Cal.App.5^th 746, the California Court of Appeal declared that trial courts have an inherent right to control the proceedings before it, including assessing whether a PAGA claim is manageable. The appellate court affirmed the trial court’s decision to strike the PAGA claims, raised by 345 general store managers, because the plaintiff representative did not present the trial court with a litigation plan demonstrating manageability of the claims. The reasoning behind the decision highlights but one aspect of why PAGA reform is necessary.  Specifically, the Court of Appeals pointed out, “[a] PAGA action may […] cover a vast number of employees, each of whom may have markedly different experiences relevant to the alleged violations [… and …] a PAGA claim can cover disparate groups of employees and involve different kinds of violations raising distinct questions.” (Id. at 859-860.) 

The Court of Appeal’s acknowledgment of the difficulties inherent in litigating a PAGA claim is a small victory for employers. Employers now have a precedent for moving to strike otherwise unmanageable PAGA claims based on a disparate set of allegedly aggrieved employees.  Conversely, plaintiffs and their attorneys will need to become more artful in crafting a PAGA claim by setting forth the claim in a manner to similar to class actions and consider class-type manageability. 

This blog is presented under protest by the law firm of Ervin Cohen & Jessup LLP. It is essentially the random thoughts and opinions of someone who lives in the trenches of the war that often is employment law–he/she may well be a little shell-shocked. So if you are thinking “woohoo, I just landed some free legal advice that will fix all my problems!”, think again. This is commentary, people, a sketchy overview of some current legal issue with a dose of humor, but commentary nonetheless; as if Dennis Miller were a lawyer…and still mildly amusing. No legal advice here; you would have to pay real US currency for that (unless you are my mom, and even then there are limits). But feel free to contact us with your questions and comments—who knows, we might even answer you. And if you want to spread this stuff around, feel free to do so, but please keep it in its present form (‘cause you can’t mess with this kind of poetry). Big news: Copyright 2021. All rights reserved; yep, all of them.

If you have any questions about this article, contact the writer directly, assuming he or she was brave enough to attach their name to it. If you have any questions regarding this blog or your life in general, contact Kelly O. Scott, Esq., commander in chief of this blog and Head Honcho (official legal title) of ECJ’s Employment Law Department.