Title: ZB, N.A. v. Superior Court

State: california

Issuer: California Supreme Court

Document:

IN THE SUPREME COURT OF 
CALIFORNIA 
 
ZB, N.A., and ZIONS BANCORPORATION, 
Petitioners, 
v. 
SUPERIOR COURT OF SAN DIEGO COUNTY, 
Respondent; 
 
KALETHIA LAWSON, 
Real Party in Interest. 
 
S246711 
 
Fourth Appellate District, Division One 
D071279 and D071376 
 
San Diego County Superior Court 
37-2016-00005578-CU-OE-CTL 
 
 
September 12, 2019 
 
Justice Cuéllar authored the opinion of the Court, in which 
Chief Justice Cantil-Sakauye and Justices Chin, Corrigan, Liu, 
Kruger, and Groban concurred. 
 
1 
ZB, N.A. v. SUPERIOR COURT 
S246711 
 
Opinion of the Court by Cuéllar, J. 
 
 
Under the Private Attorneys General Act of 2004 (PAGA) 
(Lab. Code, § 2698 et seq.),1 an employee may seek civil penalties 
for Labor Code violations committed against her and other 
aggrieved employees by bringing –– on behalf of the state –– a 
representative action against her employer.  (§ 2699, subd. (a).)  
In Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 
Cal.4th 348 (Iskanian), we held that a court may not enforce an 
employee’s alleged predispute waiver of the right to bring a 
PAGA claim in any forum.  We also found that where such a 
waiver appears in an employee’s arbitration agreement, the 
Federal Arbitration Act (FAA) (9 U.S.C. § 1 et seq.) does not 
preempt this state law rule. 
This case concerns a PAGA action seeking civil penalties 
under Labor Code section 558.  Brought by real party in interest 
Kalethia Lawson, the action named as defendants Lawson’s 
employer, ZB, N.A. — with whom she agreed to arbitrate all 
employment claims and forego class arbitration — and its 
parent company, Zions Bancorporation (collectively, ZB).  Before 
the enactment of the PAGA, section 558 gave the Labor 
Commissioner authority to issue overtime violation citations for 
“a civil penalty as follows: [¶] (1) For any initial violation, fifty 
dollars ($50) for each underpaid employee for each pay period 
                                        
1  
All subsequent statutory references are to the Labor Code, 
unless otherwise noted. 
ZB, N.A. v. SUPERIOR COURT 
Opinion of the Court by Cuéllar, J. 
 
2 
for which the employee was underpaid in addition to an amount 
sufficient to recover underpaid wages. [¶] (2) For each 
subsequent violation, one hundred dollars ($100) for each 
underpaid employee for each pay period for which the employee 
was underpaid in addition to an amount sufficient to recover 
underpaid wages.”  (Id., subd. (a), italics added.)  We granted 
review to decide whether Iskanian controls, and the FAA has no 
preemptive force, where an aggrieved employee seeks the 
“amount sufficient to recover underpaid wages” in a PAGA 
action.   
But to resolve this case we must answer a more 
fundamental question: whether a plaintiff may seek that 
amount in a PAGA action at all.  The Court of Appeal thought 
so.  It concluded section 558’s civil penalty encompassed the 
amount for unpaid wages, and Lawson’s claim for unpaid wages 
could not be compelled to arbitration under Iskanian.  It 
accordingly ordered the trial court below to deny ZB’s motion to 
arbitrate that portion of her claim. 
 
What we conclude is that the civil penalties a plaintiff may 
seek under section 558 through the PAGA do not include the 
“amount sufficient to recover underpaid wages.”  Although 
section 558 authorizes the Labor Commissioner to recover such 
an amount, this amount –– understood in context –– is not a 
civil penalty that a private citizen has authority to collect 
through the PAGA.  ZB’s motion concerned solely that 
impermissible request for relief.  Because the amount for unpaid 
wages is not recoverable under the PAGA, and section 558 does 
not otherwise permit a private right of action, the trial court 
should have denied the motion.  We affirm the Court of Appeal’s 
decision on that ground.  On remand, the trial court may 
ZB, N.A. v. SUPERIOR COURT 
Opinion of the Court by Cuéllar, J. 
 
3 
consider striking the unpaid wages allegations from Lawson’s 
complaint, permitting her to amend the complaint, and other 
measures. 
I. 
According to her complaint, Lawson began working for 
California Bank & Trust (CB&T) in 2013 as an hourly employee.  
CB&T is now a division of petitioner ZB, N.A.  ZB’s motion to 
compel arbitration explained that the employee handbook in 
effect at the time of Lawson’s hiring included a section entitled 
“Mandatory Binding Arbitration Policy and Agreement.”  A 
“statement of compliance” distributed with the employee 
handbook required the employee, by signing, to affirm that she 
had read that section of the handbook.  The statement read:  “I 
understand that by accepting or continuing employment with 
the Company I agree to use binding arbitration to resolve 
certain legal claims or controversies with the Company, Zions or 
Zions Entities, including federal Title VII and state civil rights 
claims, pursuant to the mandatory binding arbitration policy.”  
Lawson electronically acknowledged receipt of the 
employee handbook and statement of compliance, as well as an 
updated employee handbook and statement of compliance a year 
later.  Lawson does not contest here that she is bound to 
arbitration pursuant to the terms of the relevant employee 
handbook section.  The section mandated binding arbitration to 
resolve “[a]ny legal controversy or claim arising out of 
[Lawson’s] employment.”  It also contained a “class action” 
waiver that said:  “[C]laims by different claimants against the 
Company, Zions and Zions Entities or by the Company against 
different employees, former employees or applicants, may not be 
combined in a single arbitration.  Unless specific state law states 
ZB, N.A. v. SUPERIOR COURT 
Opinion of the Court by Cuéllar, J. 
 
4 
otherwise, no arbitration can be brought as a class action (in 
which a claimant seeks to represent the legal interests of or 
obtain relief for a larger group) . . . .” 
In February 2016, Lawson sued ZB, N.A., named as CB&T 
in the complaint, and its parent company, petitioner Zions 
Bancorporation, for alleged Labor Code violations harming her 
and other employees.  Lawson’s complaint contains a single 
cause of action brought under the PAGA.  She alleges ZB failed 
to provide overtime and minimum wages, meal and rest periods, 
timely wage payments, complete and accurate wage statements, 
complete and accurate payroll records, and reimbursement of 
business-related expenses.  As relevant here, Lawson’s 
complaint seeks “civil penalties against [ZB], including unpaid 
wages and premium wages per California Labor Code section 
558.”2  (See §§ 558, 2699, subd. (a).) 
In August 2016, ZB moved the trial court to compel 
Lawson to individually arbitrate “her claim for victim-specific 
relief under Labor Code § 558” and stay the civil action.  ZB 
maintained that Lawson’s employment agreement required her 
                                        
2  
Section 558, subdivision (a) provides:  “Any employer or 
other person acting on behalf of an employer who violates, or 
causes to be violated, a section of this chapter or any provision 
regulating hours and days of work in any order of the Industrial 
Welfare Commission shall be subject to a civil penalty as follows: 
[¶] (1) For any initial violation, fifty dollars ($50) for each 
underpaid employee for each pay period for which the employee 
was underpaid in addition to an amount sufficient to recover 
underpaid wages. [¶] (2) For each subsequent violation, one 
hundred dollars ($100) for each underpaid employee for each 
pay period for which the employee was underpaid in addition to 
an amount sufficient to recover underpaid wages. [¶] (3) Wages 
recovered pursuant to this section shall be paid to the affected 
employee.” 
ZB, N.A. v. SUPERIOR COURT 
Opinion of the Court by Cuéllar, J. 
 
5 
to arbitrate all employment claims on an individual basis.  
While recognizing the unenforceability of that agreement with 
respect to “traditional PAGA penalties” under Iskanian, ZB 
contended the “unpaid wages” Lawson sought, which section 
558, subdivision (a)(3) requires be paid to “the affected 
employee[s],” were something different:  “victim-specific relief” 
that ZB could require Lawson to arbitrate individually under 
the FAA and AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 
333.  In effect, ZB’s contention was that the “victim-specific 
relief” that Lawson sought under section 558 was not part of “a 
standard PAGA action” but remained a “claim . . . subject to 
individual arbitration,” although the civil penalties available 
under section 558 were not arbitrable.  The trial court generally 
agreed, bifurcating Lawson’s action and granting ZB’s motion to 
compel arbitration of the “unpaid wages” issue.   
But ZB got more than it bargained for in the process.  In 
the trial court’s view, the “unpaid wages” relief sought in 
Lawson’s PAGA claim nevertheless required “representative” 
adjudication since the “PAGA, by its very nature, is a 
representative statute.”  It therefore ordered the issue to 
arbitration “as a representative action” for the unpaid wages of 
all aggrieved ZB employees.  ZB responded by filing both an 
appeal and petition for writ of mandate with the Court of 
Appeal.  After consolidating the two, the appellate court 
dismissed the appeal, holding that Code of Civil Procedure 
section 1294 only gave it appellate jurisdiction over an order 
dismissing, not granting, a motion to compel arbitration.  ZB 
does not request our review of that matter. 
On the other hand, ZB persuaded the Court of Appeal to 
issue the writ of mandate, but the court did so on a different 
ZB, N.A. v. SUPERIOR COURT 
Opinion of the Court by Cuéllar, J. 
 
6 
ground from the one ZB asserted.  The appellate court concluded 
that Lawson’s request for unpaid wages under section 558 in 
fact could not be arbitrated at all.  Relying on Thurman v. 
Bayshore Transit Management (2012) 203 Cal.App.4th 1112 
(Thurman), the Court of Appeal interpreted section 558 to 
expressly include “underpaid wages” within the scope of its “civil 
penalty” provision.  In the appellate court’s view, an employee 
could pursue the entire, indivisible civil penalty through the 
PAGA, and under Iskanian, her employer could not compel that 
representative PAGA claim to arbitration.  Our opinion in 
Iskanian, it surmised, “made it clear that the distinction 
between civil penalties and victim specific statutory damages 
hinges in large measure on whether, prior to enactment of the 
PAGA, they could only be recovered by way of regulatory 
enforcement or whether they supported a private right of 
action.”  (Lawson v. ZB, N.A. (2017) 18 Cal.App.5th 705, 724.)  
Disagreeing with Esparza v. KS Industries, L.P. (2017) 13 
Cal.App.5th 1228 (Esparza), the Court of Appeal concluded 
section 558 previously lacked a private right of action.  So, a 
PAGA claim for the unpaid wages included in section 558’s civil 
penalty came within Iskanian’s prohibition on predispute 
waivers of such claims.  The court then issued a writ of mandate 
commanding the trial court to vacate its previous order and 
enter a new order denying ZB’s motion to arbitrate. 
 
We granted ZB’s petition for review to resolve the split of 
authority over whether an employer may compel arbitration of 
an employee’s PAGA claim requesting unpaid wages under 
section 558. 
 
 
ZB, N.A. v. SUPERIOR COURT 
Opinion of the Court by Cuéllar, J. 
 
7 
II. 
 
When it ordered the trial court to deny arbitration, the 
Court of Appeal started from Thurman’s conclusion that section 
558’s amount for unpaid wages is a civil penalty that employees 
like Lawson can recover under the PAGA.  To determine if this 
interpretation is correct, we begin with a nuanced examination 
of the PAGA, Labor Code civil penalties, and section 558. 
The Legislature enacted the PAGA in 2003 after deciding 
that lagging labor law enforcement resources made additional 
private 
enforcement 
necessary 
“ ‘to 
achieve 
maximum 
compliance with state labor laws.’ ”  (Iskanian, supra, 59 Cal.4th 
at p. 379, quoting Arias v. Superior Court (2009) 46 Cal.4th 969, 
980 (Arias).)  The PAGA therefore empowers employees to sue 
on behalf of themselves and other aggrieved employees to 
recover civil penalties previously recoverable only by the Labor 
Commissioner — including those in section 558.  (See § 2699, 
subd. (a); Iskanian, at p. 381.)  The PAGA also creates new civil 
penalties, equally enforceable by aggrieved employees, for most 
other Labor Code violations that previously did not carry such 
penalties.  (§ 2699, subds. (f), (g)(1); Iskanian, at pp. 379-380.)   
All PAGA claims are “representative” actions in the sense 
that they are brought on the state’s behalf.  The employee acts 
as “the proxy or agent of the state’s labor law enforcement 
agencies” and “represents the same legal right and interest as” 
those agencies — “namely, recovery of civil penalties that 
otherwise would have been assessed and collected by the Labor 
Workforce Development Agency.”  (Iskanian, supra, 59 Cal.4th 
at p. 380, quoting Arias, supra, 46 Cal.4th at p. 986.)  The 
employee may therefore seek any civil penalties the state can, 
including penalties for violations involving employees other 
ZB, N.A. v. SUPERIOR COURT 
Opinion of the Court by Cuéllar, J. 
 
8 
than the PAGA litigant herself.  In Iskanian, we declared 
unenforceable as a matter of state law an employee’s predispute 
agreement waiving the right to bring these representative 
PAGA claims.  Requiring employees to forgo PAGA claims in 
this way contravenes public policy by “serv[ing] to disable,” 
through private agreement, one of the state’s “primary 
mechanisms” for enforcing the Labor Code.  (Iskanian, at p. 
383.)  We then concluded the FAA did not preempt this rule or 
otherwise require enforcement of such a waiver in an arbitration 
agreement.  (See id. at pp. 384-389.) 
 
But not all statutory remedies for Labor Code violations 
are “civil penalties” recoverable in an employee’s PAGA action.  
Civil penalties were “ ‘previously enforceable only by the state’s 
labor law enforcement agencies’ ” before the PAGA.  (Iskanian, 
supra, 59 Cal.4th at p. 381.)  That was because an action for civil 
penalties “ ‘is fundamentally a law enforcement action designed 
to protect the public and not to benefit private parties.’ ”  (Arias, 
supra, 46 Cal.4th at p. 986.)  Other remedies, such as restitution 
of unpaid wages, “ ‘were recoverable directly by employees well 
before’ ” the PAGA.3  (Iskanian, at p. 381.)  In addition, civil 
penalties are “ ‘ “additional to actual losses incurred . . . .” ’ ”  
(Murphy v. Kenneth Cole Productions, Inc. (2007) 40 Cal.4th 
                                        
3  
Employees could also directly recover statutory penalties, 
as distinct from civil penalties, before the PAGA.  (Iskanian, 
supra, 59 Cal.4th at p. 381.)  For example, under section 203, an 
employer who willfully fails to pay wages owed to a discharged 
employee must pay the employee a penalty equal to her daily 
wages for up to 30 days.  (Iskanian, at p. 381; § 203, subd. (a).)  
Because neither party argues the “underpaid wages” in section 
558 are a statutory penalty, we may confine our discussion to 
distinguishing civil penalties from compensatory damages, such 
as restitution of wages. 
ZB, N.A. v. SUPERIOR COURT 
Opinion of the Court by Cuéllar, J. 
 
9 
1094, 1104 (Murphy).)  They are intended “to punish the 
employer” for wrongdoing, often “ ‘without reference to the 
actual damage sustained . . . . ’ ”  (Ibid.)  Statutory damages, on 
the other hand, primarily seek to compensate employees for 
actual losses incurred, though like penalties they might also 
“seek to shape employer conduct” as a secondary objective.  (Id. 
at p. 1112.) 
Consider, for example, the remedies available when an 
employer willfully pays a discharged employee less than the 
minimum wage in her final paycheck.  The employer violates — 
among other provisions –– section 1182.12 for failing to pay her 
the minimum wage, and section 201 for failing to pay her that 
wage promptly upon discharge.  (See §§ 1182.12, 201; see also 
Diaz v. Grill Concepts Services, Inc. (2018) 23 Cal.App.5th 859, 
867.)  The Labor Code entitles the discharged employee to 
compensatory relief in the form of unpaid wages.4  (See, e.g., 
§ 1194.)  In addition, section 1197.1 subjects the employer to a 
civil penalty of $100 for that pay period (or $250, if the employer 
has previously failed to pay her the minimum wage).  (Id., subd. 
(a).) 
Now consider the enforcement mechanisms available to 
obtain these remedies.  The employee may recover her unpaid 
wages directly through a private civil action.  (§ 1194, subd. (a).)  
Alternatively, she may file a wage complaint with the Labor 
Commissioner, seeking administrative relief.  (See § 98; Post v. 
                                        
4  
The employee may also recover section 203’s statutory 
penalty.  (Id., subd. (b) [permitting employee to recover the 
statutory penalty in a civil action]; Iskanian, supra, 59 Cal.4th 
at p. 381.)  That penalty is on top of the actual wages owed prior 
to discharge.   
ZB, N.A. v. SUPERIOR COURT 
Opinion of the Court by Cuéllar, J. 
 
10 
Palo/Haklar & Associates (2000) 23 Cal.4th 942, 946 
(Palo/Haklar).)  Should the Labor Commissioner decide to act 
on that complaint, the commissioner may “either accept the 
matter and conduct an administrative hearing” to which the 
employee is a party, or the commissioner may “prosecute a civil 
action.”  (Palo/Haklar, at p. 946; see also §§ 98, 98.3, 1193.6.)  
Separate from processing an employee’s individual wage claim, 
the Labor Commissioner may also enforce Labor Code 
requirements by investigating and issuing a citation to the 
employer 
through 
the 
Division 
of 
Labor 
Standards 
Enforcement’s (DLSE) Bureau of Field Enforcement.  (See 
§§ 90.5, 1194.2, 1197.1.)  So, the commissioner may pursue a 
civil action or issue a citation to recover the unpaid wages 
payable to the employee — just as the employee could recover 
the wages through her private civil action or a section 98 
administrative hearing (Berman hearing).  (See §§ 98, 98.3, 
1193.6, 1197.1.)  The PAGA neither added to nor subtracted 
from these procedures for securing employees’ unpaid wages. 
With respect to civil penalties, however, the landscape was 
quite different prior to enactment of the PAGA.  Before the 
PAGA was enacted, only the Labor Commissioner could also 
seek civil penalties against the employer.  (See § 1197.1; 
Iskanian, supra, 59 Cal.4th at p. 378.)  Now, the PAGA makes 
civil penalties equally recoverable through a civil action brought 
by an aggrieved employee.  (§ 2699, subds. (a), (g)(1); see, e.g., 
Alvarado v. Dart Container Corp. of California (2018) 4 Cal.5th 
542, 551.)  Pursuing civil penalties does not prevent an employee 
from separately or concurrently pursuing unpaid wages and 
other remedies already available to her.  (Id., subd. (g)(1).) 
ZB, N.A. v. SUPERIOR COURT 
Opinion of the Court by Cuéllar, J. 
 
11 
So how do we map this distinction between civil penalties 
and statutory damages onto our understanding of the relief 
available under section 558?  The Legislature enacted section 
558 as part of the Eight-Hour-Day Restoration and Workplace 
Flexibility Act of 1999.  (Stats. 1999, ch. 134, § 14; see, e.g., 
Bearden v. U.S. Borax, Inc. (2006) 138 Cal.App.4th 429, 434.)  
The act sought to restore and protect the eight-hour workday 
(see § 510) and overtime pay requirements.  (See, e.g., Assem. 
Com. on Appropriations, Analysis of Assem. Bill No. 60 (1999-
2000 Reg. Sess.) as amended Mar. 22, 1999, pp. 1-4; Bearden, at 
p. 434.)  Through section 558, the Legislature authorized the 
Labor Commissioner to issue citations, including an assessment 
of civil penalties, for overtime and other workday violations.  
(See Legis. Counsel’s Dig., Assem. Bill No. 60 (1999-2000 Reg. 
Sess.) 5 Stats. 1999, Summary Dig., p. 62.)  Under section 558, 
subdivision (a), any employer who violates these provisions 
“shall be subject to a civil penalty as follows: [¶] (1) For any 
initial violation, fifty dollars ($50) for each underpaid employee 
for each pay period for which the employee was underpaid in 
addition to an amount sufficient to recover underpaid wages. [¶] 
(2) For each subsequent violation, one hundred dollars ($100) for 
each underpaid employee for each pay period for which the 
employee was underpaid in addition to an amount sufficient to 
recover underpaid wages.”  (Italics added.)  The next paragraph 
directs that “[w]ages recovered pursuant to this section shall be 
paid to the affected employee.”  (§ 558, subd. (a)(3).)  For clarity, 
we will refer to section 558’s fixed dollar amount ($50 or $100) 
as its “fixed amount” and the “amount sufficient to recover 
underpaid wages” as the “amount for unpaid wages” or “unpaid 
wages.” 
ZB, N.A. v. SUPERIOR COURT 
Opinion of the Court by Cuéllar, J. 
 
12 
The amount of unpaid wages recovered through section 
558 will vary by employee.  The crux of the parties’ dispute 
concerns whether this employee-specific amount is the kind of 
“civil penalty” the PAGA and Iskanian contemplated the 
employee pursuing on the state’s behalf — and whose recovery 
Iskanian thus immunized from predispute waivers in 
arbitration agreements. 
III. 
Initially, ZB argues that not all civil penalties are created 
equal.  ZB posits that the PAGA may well permit employees to 
recover two distinct types of civil penalties:  (1) “traditional” civil 
penalties 
like 
section 
558’s 
fixed 
amount; 
and 
(2) 
“nontraditional” civil penalties, like unpaid wages under section 
558, that are “victim specific” and were paid directly to the 
employee before the PAGA.  From ZB’s perspective, Iskanian 
forbids predispute waivers of claims for the former; but 
employers may require such waivers for the latter.  (See 
Esparza, supra, 13 Cal.App.5th at p. 1243 [“[a] determination 
that an award of unpaid wages under Labor Code section 558 is 
a civil penalty does not control how we interpret the term civil 
penalty as it is used in the Iskanian rule”].)  Alternatively, ZB 
asserts that unpaid wages recovered through section 558 fail to 
qualify as a civil penalty of either kind and are better 
understood as compensatory damages.  That would mean 
Lawson cannot seek those unpaid wages in her PAGA action 
since, as even Lawson concedes, the PAGA only creates a cause 
of action for civil penalties.  (See § 2699, subd. (a).)  Lawson, in 
contrast, urges us to read section 558’s reference to unpaid 
wages as part of an integrated civil penalty recoverable under 
the PAGA.  Because section 558 has no private right of action 
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Opinion of the Court by Cuéllar, J. 
 
13 
and she can only seek its unpaid wages remedy through the 
PAGA, Iskanian provides no basis for distinguishing it from any 
other civil penalty “ ‘previously enforceable only by the state’s 
labor law enforcement agencies.’ ”  (Iskanian, supra, 59 Cal.4th 
at p. 381.)  That section 558 requires this amount to be paid to 
the affected employee makes no difference, she says, since only 
the Labor Commissioner could secure such payment for 
employees prior to the PAGA. 
We agree in part with Lawson:  section 558 lacks a private 
right of action.  An aggrieved employee can make use of section 
558’s remedy only when she acts as the state’s proxy — and 
that’s a role she can play only through a PAGA action.  
Nevertheless, a close, contextual analysis of the statutory 
scheme reveals that the amount for unpaid wages referenced in 
section 558 is not part of that section’s civil penalty and is not 
recoverable through a PAGA action.  Instead, as ZB says, this 
part of a section 558 citation represents compensatory damages.  
Section 558, in other words, authorizes only the Labor 
Commissioner to issue a citation that includes both a civil 
penalty and the same unpaid wages Lawson can alternatively 
recover under section 1194 through a civil action or an 
administrative hearing.  But section 2699, subdivision (a) does 
not authorize employees to collect section 558’s unpaid wages 
through a PAGA action.  This reading best harmonizes section 
558 with the procedural provisions in section 1197.1, with 
analogous remedies elsewhere in the Labor Code, and with the 
broader enforcement scheme for unpaid wages.  It also fits with 
the understanding of the agency in charge of issuing these 
citations, and with the relevant legislative history. 
 
 
ZB, N.A. v. SUPERIOR COURT 
Opinion of the Court by Cuéllar, J. 
 
14 
 
A. 
We review the Court of Appeal’s interpretation of sections 
2699, subdivision (a) and 558 de novo.  (United Riggers & 
Erectors, Inc. v. Coast Iron & Steel Co. (2018) 4 Cal.5th 1082, 
1089 (United Riggers).)  Statutory interpretation requires us “to 
ascertain and effectuate the intended legislative purpose.”  
(Ibid.)  We consider the provisions’ language in its “broader 
statutory context” and, where possible, harmonize that 
language with related provisions by interpreting them in a 
consistent fashion.  (Ibid.)  If an ambiguity remains after this 
preliminary textual analysis, we may consider extrinsic sources 
such as legislative history and contemporaneous administrative 
construction.  (See id. at p. 1093; Murphy, supra, 40 Cal.4th at 
p. 1103.)  Because statutes governing employment conditions 
tend to have remedial purposes, we “liberally construe” them “to 
favor the protection of employees.”  (Augustus v. ABM Security 
Services, Inc. (2016) 2 Cal.5th 257, 262 (Augustus); accord, 
Murphy, supra, 40 Cal.4th at p. 1103; see also Sav-On Drug 
Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 340.) 
Lawson offers what appears to be, at first glance, a 
plausible reading of the statute.  Subdivision (a) of section 558 
uses a familiar structure:  identifying a class (“civil penalty”) 
then using a colon to introduce the members of that class; or, 
alternatively, identifying a term then using a colon to introduce 
that term’s definition.  Under this reading, “civil penalty” is the 
class of remedy, while the fixed amount and unpaid wages are 
members of that class:  the employer “shall be subject to a civil 
penalty as follows: [¶] . . . fifty dollars ($50) . . . in addition to an 
amount sufficient to recover underpaid wages.”  (§ 558, subd. 
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Opinion of the Court by Cuéllar, J. 
 
15 
(a)(1).)  The lack of a comma between the fixed amount and the 
amount for unpaid wages tends to support this reading. 
But other language in the statute gives us reason to doubt 
Lawson’s construction.  Section 558, subdivisions (a)(1) and (2) 
state that the “civil penalty” is “in addition to an amount 
sufficient to recover underpaid wages.”  (Italics added.)  What 
“in addition to” appears to indicate is that these provisions 
subject the employer to a civil penalty on top of, not including, 
an amount meant to compensate for unpaid wages.  Moreover, 
the “[w]ages recovered” through that amount “shall be paid to 
the affected employee.”  (§ 558, subd. (a)(3).)  It is not unheard 
of for the state to direct payment of civil penalties to private 
citizens — this is precisely what the PAGA authorizes by 
awarding aggrieved employees 25 percent of civil penalties 
recovered.  Yet this directive could suggest the unpaid wages 
address the injury to the employee, compensating her for what 
she’s lost, whereas civil penalties address the conduct of the 
employer and so typically redound primarily to the state.  In 
Murphy, we suggested that where an ambiguous Labor Code 
provision can plausibly be categorized as either employee-
focused or employer-focused, the former understanding better 
reflects the principle of interpreting such provisions broadly in 
favor of protecting employees.  (See Murphy, supra, 40 Cal.4th 
at p. 1104.)  Just as Lawson’s reading finds support in the 
language of section 558, so too, then, does ZB’s alternative 
assertion that the better reading treats those monies collected 
“to recover underpaid wages” as compensatory damages.   
Indeed, a closely related statute deploys precisely the 
same construction –– “in addition to an amount sufficient to 
recover underpaid wages” — to introduce compensatory 
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Opinion of the Court by Cuéllar, J. 
 
16 
damages for unpaid wages, not civil penalties.  Section 1197.1 
sets out the procedures for issuing, contesting, and enforcing 
judgments for citations issued under section 558.  (See §§ 558, 
subd. (b), 1197.1.)  That section also provides its own civil 
penalties, analogous to section 558’s, for minimum wage 
violations.  According to section 1197.1’s terms, an employer 
who fails to pay minimum wage “shall be subject to a civil 
penalty, restitution of wages, liquidated damages payable to the 
employee, and any applicable penalties imposed pursuant to 
Section 203 as follows: [¶] (1) For any initial violation that is 
intentionally committed, one hundred dollars ($100) for each 
underpaid employee for each pay period for which the employee 
is underpaid.  This amount shall be in addition to an amount 
sufficient to recover underpaid wages, liquidated damages 
pursuant to Section 1194.2, and any applicable penalties 
imposed pursuant to Section 203.”  (§ 1197.1, subd. (a)(1), italics 
added.) 
Section 1197.1 is remarkably similar in structure to 
section 558.  Like section 558, section 1197.1 authorizes the 
Labor Commissioner to issue a citation that includes a fixed 
component and an underpaid wages component (and also adds 
liquidated damages and statutory penalty components).  Section 
1197.1 follows section 558 in providing for a graduated civil 
penalty system for initial and subsequent violations.5  As in 
                                        
5  
“For each subsequent violation for the same specific 
offense, two hundred fifty dollars ($250) for each underpaid 
employee for each pay period for which the employee is 
underpaid regardless of whether the initial violation is 
intentionally committed.  This amount shall be in addition to an 
amount sufficient to recover underpaid wages, liquidated 
damages pursuant to Section 1194.2, and any applicable 
ZB, N.A. v. SUPERIOR COURT 
Opinion of the Court by Cuéllar, J. 
 
17 
section 558, section 1197.1 requires that amounts beyond its 
fixed component “be paid to the affected employee.”  (Id., subd. 
(a)(3).)  And citations under sections 558 and 1197.1 share the 
same procedures for issuance, contest, and enforcement.  (See 
§ 558, subd. (b); compare ibid. with § 1197.1, subd. (b).) 
Unlike section 558, section 1197.1’s punctuation and 
parallelism make clear that the underpaid wages component of 
its citation functions as relief in addition to civil penalties.  Yet 
the provisions’ overall similarities in structure and language 
tend to support a conclusion that the Legislature’s broad 
purpose was essentially the same in section 558.  (See Winn v. 
Pioneer Medical Group, Inc. (2016) 63 Cal.4th 148, 161 (Winn) 
[“We generally presume that when the Legislature uses a word 
or phrase ‘in a particular sense in one part of a statute,’ the word 
or phrase should be understood to carry the same meaning when 
it arises elsewhere in that statutory scheme”].)   
Admittedly, in some respects the analysis of section 1197.1 
could conceivably cut the other way.  Although distinguishing 
the unpaid wages section 558 references from its civil penalty is 
consistent with the statute’s language, why would the 
Legislature communicate somewhat more obliquely in that 
statute a delineation made clear in section 1197.1?  But Lawson 
gives us no reason to consider overtime violations “unique” 
relative to minimum wage violations, so we have no basis to 
conclude that the Legislature treated unpaid wages as a civil 
penalty in one context but not the other.  (See United Riggers, 
supra, 4 Cal.5th at p. 1091.)  In these circumstances, we think 
certain quirks reflected in the statutes’ distinct legislative 
                                        
penalties imposed pursuant to Section 203.”  (§ 1197.1, subd. 
(a)(2).)   
ZB, N.A. v. SUPERIOR COURT 
Opinion of the Court by Cuéllar, J. 
 
18 
histories, rather than any difference in underlying purpose, 
explains the discrepancy.  When the Legislature added section 
558 to the Labor Code in 1999, it included both the fixed amount 
and the amount for unpaid wages.  Meanwhile, section 1197.1 
as originally enacted, before it was amended in 2011, included 
only a fixed component in its citation.6  A legislature 
incrementally accomplishing what it has previously instituted 
all at once might well express the same concept with more 
clarity.  (See United Riggers, supra, 4 Cal.5th at p. 1093 
[“Different bills, drafted by different authors, passed at different 
times, might well use different language to convey the same 
basic rule, so the absence of an express limit in section 8814 
need not imply a departure in meaning from other like 
statutes”].)  And, of course, the Legislature amended section 
1197.1 to add unpaid wages and distinguish them from civil 
penalties years after the PAGA’s passage, when the importance 
of differentiating between the two was evident.  In contrast, 
section 558’s enacting Legislature likely did not foresee the 
                                        
6  
Prior to amendment in 2011, former section 1197.1, 
subdivision (a), read:  “Any employer or other person acting 
either individually or as an officer, agent, or employee of another 
person, who pays or causes to be paid to any employee a wage 
less than the minimum fixed by an order of the commission shall 
be subject to a civil penalty as follows: [¶] (1) For any initial 
violation that is intentionally committed, one hundred dollars 
($100) for each underpaid employee for each pay period for 
which the employee is underpaid. [¶] (2) For each subsequent 
violation for the same specific offense, two hundred fifty dollars 
($250) for each underpaid employee for each pay period for 
which the employee is underpaid regardless of whether the 
initial violation is intentionally committed.”  (Stats. 2003, ch. 
329, § 8, p. 2677.) 
ZB, N.A. v. SUPERIOR COURT 
Opinion of the Court by Cuéllar, J. 
 
19 
ramifications of failing to emphasize the dual nature of section 
558’s remedy. 
Another reason cuts even more decisively in favor of 
treating the amount for unpaid wages as something other than 
civil penalties:  its relationship with section 1197.1’s procedural 
provisions.  We must harmonize related statutes with each other 
“so that all parts of the statutory scheme are given effect.”  
(Lexin v. Superior Court (2010) 47 Cal.4th 1050, 1090-1091; 
accord, Winn, supra, 63 Cal.4th at p. 161.)  Section 1197.1, 
subdivision (c)(3) establishes a bond requirement for employers 
petitioning for a writ of mandate to contest citations governed 
by section 1197.1’s procedures.  Legislators approved this bond 
requirement in 2016 (Stats. 2016, ch. 622, § 1) to ensure that 
unscrupulous employers cannot avoid paying withheld wages by 
filing frivolous petitions.  (See Assem. Com. on Labor and 
Employment et al., Assem. Floor Analysis, 3d reading analysis 
of Assem. Bill No. 2899 (2015-2016 Reg. Sess.) as amended May 
4, 2016, pp. 1-2.)  To have a petition heard, the employer must 
post a bond with the Labor Commissioner “equal to the total 
amount of any minimum wages, liquidated damages, and 
overtime compensation that are due and owing as determined 
pursuant to subdivision (b) of Section 558.”7  (§ 1197.1, subd. 
(c)(3), italics added.)  In turn, subdivision (b) of section 558 
                                        
7  
The use of the plural verb “are” in the relative defining 
clause creates some ambiguity as to whether the adjectival 
phrase “due and owing . . .” modifies only “overtime 
compensation” or also “minimum wages” and “liquidated 
damages.”  (§ 1197.1, subd. (c)(3).)  But whether we use the 
series-qualifier principle or last antecedent rule (see, e.g., White 
v. County of Sacramento (1982) 31 Cal.3d 676, 680-681), “due 
and owing . . .” at least refers to overtime compensation. 
ZB, N.A. v. SUPERIOR COURT 
Opinion of the Court by Cuéllar, J. 
 
20 
explains that the commissioner may issue a citation when she 
or he “determines that a person had paid or caused to be paid a 
wage for overtime work in violation” of the law.  (Italics added.)  
The Legislature frequently uses “compensation” and “wage” as 
synonyms for one another.  (Murphy, supra, 40 Cal.4th at p. 
1104, fn. 6.)   
Reading 
the 
two 
statutes 
together 
supports 
a 
straightforward conclusion:  the citations issued under section 
558 include some amount intended to compensate for a withheld 
“wage for overtime work” — relief of the same class as 
“minimum wages” and “liquidated damages” in section 1197.1, 
subdivision (c)(3).  And because we presume the Legislature 
used the terms “wage” and “wages” consistently throughout 
section 558, we may further conclude that the “amount 
sufficient to recover underpaid wages” in subdivision (a) is the 
same compensatory component of the citation that subdivision 
(b) references.  Moreover, section 1197.1, subdivision (c)(3) 
instructs that the bond amount — which includes “overtime 
compensation . . . due and owing as determined pursuant to 
subdivision (b) of Section 558” — “shall not include amounts for 
penalties.”  (Italics added.)  What follows from this language is 
that “overtime compensation,” meaning the unpaid wages 
assessed under section 558, does not “include [an] amount[] for 
penalties.”  (§ 1197.1, subd. (c)(3).)  Nonetheless deeming the 
unpaid wages in section 558 a civil penalty would render 
subdivision (c)(3) of section 1197.1 internally inconsistent. 
Construing the unpaid wages as compensatory relief that 
an employee may not recover in a PAGA claim also avoids 
another potential inconsistency between the PAGA and section 
558.  The PAGA requires 25 percent of civil penalties recovered 
ZB, N.A. v. SUPERIOR COURT 
Opinion of the Court by Cuéllar, J. 
 
21 
to go to aggrieved employees (§ 2699, subd. (i)), whereas section 
558, subdivision (a)(3) requires 100 percent of any recovered 
wages to be paid to the affected employee.  Several courts of 
appeal have come to different conclusions about which provision 
controls the allocation of unpaid wages under section 558 when 
recovered as civil penalties in a PAGA claim.  (Compare 
Zakaryan v. The Men’s Wearhouse, Inc. (2019) 33 Cal.App.5th 
659, 673-674, review granted July 10, 2019, with Thurman, 
supra, 203 Cal.App.4th at p. 1145.)  If it were in the ambit of the 
Legislature’s purpose for PAGA plaintiffs to recover unpaid 
wages as civil penalties, it presumably would have addressed 
this apparent conflict directly.  But our holding today makes 
clear the conflict is illusory, because unpaid wages are not 
recoverable as civil penalties under the PAGA in the first place. 
One final aspect of the Labor Code’s remedial scheme also 
cuts against treating unpaid wages in section 558 as a civil 
penalty.  The “vast majority” of civil penalties in the Labor Code 
are “fixed, arbitrary amount[s].”  (Murphy, supra, 40 Cal.4th at 
p. 1107; see, e.g., §§ 225.5, subd. (a), 226.3, 226.8, subd. (b), 
1174.5, 1197.1, subd. (a).)  The PAGA itself creates a similar 
default civil penalty scheme: $100 for each aggrieved employee 
per pay period for an initial violation and $200 for each 
aggrieved employee per pay period for subsequent violations.  
(§ 2699, subd. (f).)  This suggests the Legislature understood 
civil penalties to consist primarily of dollar-denominated fines.  
In some cases, the Legislature does calculate a “civil penalty” 
based partially on an employee’s unpaid wages.  (E.g., §§ 210, 
subd. (a)(2) [“two hundred dollars ($200) for each failure to pay 
each employee, plus 25 percent of the amount unlawfully 
withheld”], 225.5, subd. (b) [same], 230.8, subd. (d) [“a civil 
ZB, N.A. v. SUPERIOR COURT 
Opinion of the Court by Cuéllar, J. 
 
22 
penalty in an amount equal to three times the amount of the 
employee’s lost wages and work benefits”].)  What makes it 
difficult to equate section 558 with those provisions is that none 
of them describe a fixed amount “in addition to an amount 
sufficient to recover underpaid wages” as sections 558 and 
1197.1 do.  Lawson makes no argument for analogizing section 
558’s amount for unpaid wages to the relief in these statutes 
rather than the “restitution of wages” in section 1197.1.  Section 
1197.1 has a closer relationship and parallel scheme, and shares 
with section 558 a language construction appearing nowhere 
else in the Labor Code. 
Accordingly, what we conclude is that section 558 
authorizes the Labor Commissioner to issue citations for a fixed 
civil penalty amount “in addition to” a compensatory amount 
“sufficient to recover underpaid wages.”  Treating the amount 
for unpaid wages in this way best harmonizes section 558’s 
provisions with each other and with the broader statutory 
scheme.  
To the extent the statutory text is ambiguous, legislative 
history likewise supports this interpretation.  As we have 
explained, the purpose of the PAGA was to authorize aggrieved 
employees to seek civil penalties, which are distinctly an 
interest of the state and were previously unrecoverable by 
private parties.  (Iskanian, supra, 59 Cal.4th at p. 381.)  
Although the Legislature created section 558 five years before 
the PAGA, it is notable that the enacting Legislature 
characterized only the fixed amount as the new civil penalty it 
was creating for the Labor Commissioner’s sole enforcement.  
Legislative analyses of Assembly Bill No. 60 (1999-2000 Reg. 
Sess.) consistently described the new section 558’s “civil 
ZB, N.A. v. SUPERIOR COURT 
Opinion of the Court by Cuéllar, J. 
 
23 
penalties” as “$50 per employee for each pay period for a first 
violation of the overtime pay requirements of the bill, and $100 
per employee for each pay period for subsequent violations.”  
(Assem. Com. on Appropriations, Analysis of Assem. Bill No. 60 
(1999-2000 Reg. Sess.) as amended Mar. 22, 1999, pp. 3-4; 
Assem. Com. on Labor and Employment, Analysis of Assem. Bill 
No. 60 (1999-2000 Reg. Sess.) as amended Mar. 15, 1999, p. 4; 
Assem. Com. on Labor and Employment, Republican Analysis of 
Assem. Bill No. 60 (1999-2000 Reg. Sess.) as amended Mar. 15, 
1999, p. 15.)  Analysis of a bill later amending section 558 did 
the same — years after the significance of designating or failing 
to designate something as a civil penalty would have been 
apparent because of the PAGA.  (Sen. Rules Com., Off. Of Sen. 
Floor Analyses, 3d reading analysis of Assem. Bill No. 970 
(2015-2016 Reg. Sess.) as amended Aug. 24, 2015, p. 2 
[describing existing law].)   
A contemporaneous internal DLSE memorandum on the 
new law further supports our interpretation.  The Labor 
Commissioner’s memorandum characterized the unpaid wages 
as the same compensatory relief already available to employees 
through other means.  A premise of its analysis was that section 
558 established “a civil penalty citation system” as a “new 
method for enforcing overtime obligations.”  (Chief Counsel 
Miles E. Locker and Labor Commissioner Marcy V. Saunders, 
mem. to DLSE Professional Staff, Dec. 23, 1999.)  A “citation” 
could include:  “1) a civil penalty that is payable to the State (set 
for an initial violation, which we interpret as a first citation, at 
$50 per employee per pay period for which the employee was 
underpaid; and for a subsequent violation, at $100 per employee 
per pay period in which the employee was underpaid), and 2) an 
ZB, N.A. v. SUPERIOR COURT 
Opinion of the Court by Cuéllar, J. 
 
24 
additional amount representing the unpaid overtime wages 
owed to the employees, with any such wages that are recovered 
to be paid by DLSE to the affected employees.”  (Ibid., original 
italics.)  The commissioner praised that second part of the 
citation as both “a significant enforcement mechanism” and “a 
means of expeditiously pursuing the collection of unpaid 
overtime wages.”  (Ibid.)  Expeditious, she meant, relative to 
existing means of “enforcing a worker’s right to overtime 
compensation”:  DLSE could “still prosecute overtime violations” 
through a civil action pursuant to section 1193.6 or a Berman 
hearing.  (Ibid.)  But the citation power was important because 
DLSE could issue citations without an advance hearing.  (See 
§ 558, subd. (b).)  The commissioner, then, saw the amount 
corresponding to unpaid wages as a faster means of collecting 
the compensatory damages DLSE could already recover through 
a civil action and that employees could pursue directly by 
requesting a Berman hearing or filing a section 1194 claim. 
Deeming the unpaid wages amount to be a civil penalty 
despite the existing enforcement mechanisms for those wages 
cannot be squared with the understanding of that term under 
the PAGA.  Civil penalties are an interest of the state.  
Employees could not recover them until the PAGA authorized 
aggrieved employees to do so as agents of the state.  In contrast, 
section 558’s amount for unpaid wages merely supplemented 
pre-existing procedures available to employees for recovering 
their individual unpaid wages.  Contrary to Lawson’s 
contentions, these features make the unpaid wages the Labor 
Commissioner recovers under section 558 fundamentally 
different from the civil penalties an employee recovers under the 
PAGA.  (See Iskanian, supra, 59 Cal.4th at p. 381.) 
ZB, N.A. v. SUPERIOR COURT 
Opinion of the Court by Cuéllar, J. 
 
25 
B. 
 
Lawson takes a different view of section 558 and the 
Legislature’s purpose in this context.  As several courts of appeal 
have reasoned or assumed, she urges us to conclude that a 
straightforward reading of section 558 renders the amount for 
unpaid wages a civil penalty.  (See Thurman, supra, 203 
Cal.App.4th at p. 1145; Bradstreet v. Wong (2008) 161 
Cal.App.4th 1440, 1451, abrogated on other grounds by 
Martinez v. Combs (2010) 49 Cal.4th 35; Jones v. Gregory (2006) 
137 Cal.App.4th 798, 809, fn. 11, abrogated on other grounds by 
Martinez, supra, 49 Cal.4th 35; Caliber Bodyworks, Inc. v. 
Superior Court (2005) 134 Cal.App.4th 365, 378-379, 381.)  She 
also relies on dictum in Reynolds v. Bement (2005) 36 Cal.4th 
1075 (Reynolds), abrogated on other grounds by Martinez, 
stating the same.  (Id. at p. 1089.)   
Yet reading the relevant provisions in context, it becomes 
clear that unpaid wages the Labor Commissioner recovers 
through section 558 are separate from and additional to, rather 
than thoroughly included within, the civil penalty a private 
plaintiff may recover in a PAGA action.  (See United Riggers, 
supra, 4 Cal.5th at p. 1089 [“Our role in interpreting statutes is 
to ascertain and effectuate the intended legislative purpose . . . 
[and] constru[e] words in their broader statutory context”].)  
Indeed, most of the cases Lawson cites did not have the benefit 
of considering section 1197.1’s amended 2011 language, and 
even the Thurman court had no opportunity to consider the 2016 
amendment’s reference to “overtime compensation” under 
section 558.  (§ 1197.1, subd. (c)(3).)  Moreover, we did not 
squarely confront this issue in Reynolds, which concerned 
whether employees could seek recovery from individual 
ZB, N.A. v. SUPERIOR COURT 
Opinion of the Court by Cuéllar, J. 
 
26 
corporate agents, not the nature of that recovery under section 
558.8  (See Reynolds, supra, 36 Cal.4th at p. 1089.) 
 
Lawson also stresses the Legislature’s presumed goals of 
increasing the government’s authority to enforce existing and 
newly enhanced overtime protections and deterring employer 
violations of those protections.  According to her, we must read 
the amount for unpaid wages as a civil penalty in light of these 
purposes.  (See Home Depot, U.S.A., Inc. v. Superior Court 
(2010) 191 Cal.App.4th 210, 225 [“ ‘Civil penalties are 
inherently regulatory, not remedial,’ and are intended to secure 
obedience ‘to statutes and regulations validly adopted under the 
police power’ ”].)  Yet even compensatory relief intended “first 
and foremost to compensate employees for their injuries” 
(Murphy, supra, 40 Cal.4th at p. 1111)  may have an “incidental 
behavior-shaping purpose” (id. at p. 1110).  That the Legislature 
or Labor Commissioner believed the amount for unpaid wages 
would serve a compliance function does not necessarily make it 
a civil penalty. 
Nor do we find the conclusion we have reached — that 
unpaid wages under section 558 must be distinguished from the 
civil penalty aggrieved employees may recover under the PAGA 
                                        
8  
To the extent Thurman v. Bayshore Transit Management, 
supra, 203 Cal.App.4th 1112, Bradstreet v. Wong, supra, 161 
Cal.App.4th 1440, Jones v. Gregory, supra, 137 Cal.App.4th 798, 
and Caliber Bodyworks, Inc. v. Superior Court, supra, 134 
Cal.App.4th 365 are inconsistent with our holding that unpaid 
wages under section 558 may not be recovered through a PAGA 
action, we disapprove them.  We also disapprove Zakaryan v. 
The Men’s Wearhouse, Inc., supra, 33 Cal.App.5th 659, and 
Mejia v. Merchants Building Maintenance, LLC (2019) 38 
Cal.App.5th 723, to the extent they are inconsistent with this 
holding. 
ZB, N.A. v. SUPERIOR COURT 
Opinion of the Court by Cuéllar, J. 
 
27 
— inconsistent with the Labor Code’s broader remedial purpose 
or “the protection of employees” (Augustus, supra, 2 Cal.5th at 
p. 262).  The citation procedure meaningfully enhanced 
enforcement of the Labor Code by establishing new civil 
penalties for wage and hour violations while also accelerating 
recovery of employees’ unpaid wages.  The Legislature could 
reasonably choose to make the former but not the latter 
available under the PAGA, as other remedies were already 
provided to resolve employees’ unpaid wage claims.  (See ante, 
at pp. 9-10.)  This interpretation still lets employees pursue 
those remedies alongside PAGA claims to obtain full recovery.  
(See § 2699, subd. (g)(1).)  As we explained in Arias, nonparty 
employees may even use the proof of a Labor Code violation in a 
successful PAGA action against an employer in a subsequent 
action for “lost wages” and other “remedies in addition to civil 
penalties.”  (Arias, supra, 46 Cal.4th at p. 987.)  Nonparty 
employees are bound by the judgment in an action under the 
PAGA, but only with respect to recovery of civil penalties.   (Id. 
at p. 986.)  This is because the PAGA “authorizes a 
representative action only for the purpose of seeking [civil] 
penalties for Labor Code violations [citation], and an action to 
recover civil penalties ‘is fundamentally a law enforcement 
action,’ ” not one for the benefit of private parties.  (Ibid.)   
Yet there is no question that nonparty employees may 
“invoke[e] collateral estoppel” in the future, “us[ing] the 
judgment against the employer to obtain remedies other than 
civil penalties for the same Labor Code violations.”  (Id. at p. 
987.)  This limited, non-mutual issue preclusion is permissible 
because the purpose of the underlying PAGA action itself is “to 
protect the public, and the potential impact on remedies other 
ZB, N.A. v. SUPERIOR COURT 
Opinion of the Court by Cuéllar, J. 
 
28 
than civil penalties is ancillary to the action’s primary 
objective.”  (Ibid.)  And our holding today tracks this distinction 
in Arias between civil penalties and additional remedies 
available under the Labor Code. 
Finally, Lawson contends that unpaid wages recovered 
under section 558 meet the definition of “civil penalty” because 
prior to the PAGA, only the state could bring an action under 
section 558.  (See Iskanian, supra, 59 Cal.4th at p. 381.)  Yet 
while section 558 gave the state exclusive power to collect 
unpaid wages through its citation procedure, we have already 
explained that section 558 achieves the same result with respect 
to unpaid wages as the private right of action under section 
1194.  So only the fixed amount qualifies as a “civil penalty.”   
IV. 
We now address the consequences of our holding for ZB’s 
motion to compel arbitration.  Iskanian established an 
important principle:  employers cannot compel employees to 
waive their right to enforce the state’s interests when the PAGA 
has empowered employees to do so.  But for Iskanian to apply, 
the state must in fact have delegated enforcement of its interests 
to private citizens.  The Legislature used the PAGA to delegate 
enforcement of civil penalties.  In contrast, we now hold that the 
“amount sufficient to recover underpaid wages” authorized in 
section 558, subdivision (a) constitutes compensatory relief –– a 
type of recovery separate from its civil penalties.  This reading 
properly reflects both the PAGA’s purpose and section 558’s 
purpose to enhance and streamline enforcement of the Labor 
Code’s overtime and workday requirements. 
When the Court of Appeal determined that the motion to 
compel arbitration should have been denied, it was operating on 
ZB, N.A. v. SUPERIOR COURT 
Opinion of the Court by Cuéllar, J. 
 
29 
the faulty premise that section 558’s civil penalty includes 
unpaid wages.  Yet the court’s ultimate conclusion about ZB’s 
motion was justified.  We agree with the Court of Appeal that 
section 558 has no private right of action.  Nor can employees 
recover the unpaid wages described in section 558 in a PAGA 
claim — even though section 558 permits the Labor 
Commissioner to include that amount in a citation.  Simply put, 
Lawson’s complaint alleges entitlement to relief she cannot seek 
because she lacks a cause of action:  an amount for unpaid wages 
under section 558.  ZB’s motion sought to compel arbitration of 
only that impermissible request for relief rather than any valid 
claim the court could compel to arbitration.  Accordingly, while 
we disagree with its reasoning, we conclude that the Court of 
Appeal correctly granted ZB’s writ petition and ordered the trial 
court to deny ZB’s motion to compel arbitration. 
Given this conclusion, ZB has suggested the trial court 
strike from the complaint Lawson’s allegation requesting 
unpaid wages.  (See Code Civ. Proc., § 436.)  Lawson, for her 
part, has indicated she would like to amend her complaint to 
request unpaid wages under an appropriate cause of action.  
(See id., § 472.)  The trial court may consider these issues on 
remand. 
V. 
 
An employee’s predispute agreement to individually 
arbitrate her claims is unenforceable where it blocks an 
employee’s PAGA claim from proceeding.  But a PAGA claim 
does not include unpaid wages under section 558.  Because ZB’s 
motion to compel arbitration concerned relief that was not 
cognizable under the sole cause of action in Lawson’s complaint, 
ZB, N.A. v. SUPERIOR COURT 
Opinion of the Court by Cuéllar, J. 
 
30 
we affirm the judgment of the Court of Appeal and remand for 
proceedings consistent with this opinion. 
 
 
 
 
 
 
 
CUÉLLAR, J.  
We Concur: 
CANTIL-SAKAUYE, C. J. 
CHIN, J. 
CORRIGAN, J. 
LIU, J. 
KRUGER, J. 
GROBAN, J. 
 
 
See next page for addresses and telephone numbers for counsel who argued in Supreme Court. 
 
Name of Opinion ZB, N.A., and Zions Bancorporation v. Superior Court 
__________________________________________________________________________________ 
 
Unpublished Opinion 
Original Appeal 
Original Proceeding 
Review Granted XXX 18 Cal.App.5th 705 
Rehearing Granted 
 
__________________________________________________________________________________ 
 
Opinion No. S246711 
Date Filed: September 12, 2019 
__________________________________________________________________________________ 
 
Court: Superior 
County: San Diego 
Judge: Joel M. Pressman 
 
__________________________________________________________________________________ 
 
Counsel: 
 
Rutan & Tucker, James L. Morris, Brian C. Sinclair and Gerard M. Mooney for Petitioners. 
 
Greines, Martin, Stein & Richland, Robert A. Olson and Cynthia E. Tobisman for California New Car 
Dealers Association as Amicus Curiae on behalf of Petitioners. 
 
O’Melveny & Myers, Apalla U. Chopra, Andrew Lichtenstein, Adam J. Karr, Ryan W. Rutledge and Kelly 
Wood for the Employers Group and California Employment Law Council as Amici Curiae on behalf of 
Petitioners. 
 
No appearance for Respondent Superior Court. 
 
Altshuler Berzon, Michael Rubin, Kristin M. García; Lawyers for Justice, Edwin Aiwazian, Arby Aiwazian 
and Joanna Ghosh for Real Party in Interest. 
 
Bryan Schwartz Law, Bryan J. Schwartz, Logan T. Talbot, Eduard R. Meleshinsky, DeCarol A. Davis for 
California Employment Lawyers Association as Amicus Curiae on behalf of Real Party in Interest. 
 
 
 
 
 
 
 
 
 
 
Counsel who argued in Supreme Court (not intended for publication with opinion): 
 
Brian C. Sinclair 
Rutan & Tucker 
611 Anton Boulevard, Suite 1400 
Costa Mesa, CA  92626-1931 
(714) 641-5100 
 
Michael Rubin 
Altshuler Berzon 
177 Post Street, Suite 300 
San Francisco, CA  94108 
(415) 421-7151