Source: http://mondaq.com/unitedstates/x/779400/employee+rights+labour+relations/PAGA+A+Call+To+Arms
Timestamp: 2019-04-26 06:39:55+00:00

Document:
Whatever good intentions its proponents may claim, the Labor Code Private Attorneys General Act of 2004 (PAGA) created perverse incentives for plaintiff's lawyers to file representative actions seeking civil penalties for violations of the California Labor Code on behalf of all "aggrieved employees" of the named plaintiff's employer. The named plaintiff often does not know she is being used for purposes of bringing a PAGA action. The alleged violations are often hyper-technical or trivial, if a violation at all � "gotcha" claims, as plaintiff's lawyers like to call them. The "aggrieved employees" � who can number in the tens of thousands if the target is a large employer � most often have suffered no injury. The employer, facing potentially business-destroying liability, too often settles for an amount of money bearing no relationship to the violations allegedly committed. And the plaintiff's lawyers pocket 30-35 percent of the settlement for themselves.
This article addresses some of the pressing issues around PAGA, in three parts. First, it provides an overview of salient aspects of PAGA and the case law interpreting it. Next, it discusses a recently-filed lawsuit that seeks to have PAGA declared unconstitutional. Finally, it offers suggestions for warding off a PAGA action or winning the action if brought.
The takeaway: In today's climate, virtually every California employer is vulnerable to a PAGA attack and taking steps to avoid or defeat PAGA liability should be given high priority.
"Are California business owners who inadvertently make a payroll error equivalent to the worst perpetrators of hate crimes? That's the twisted logic that, more than a decade ago, led the state legislature to pass a harmful law called the Private Attorneys General Act (PAGA).
"PAGA was conceived as a means to help employees right workplace wrongs without further burdening the state bureaucracy. Trial attorneys quickly discovered that they could use the law for their own benefit; today, thousands of PAGA complaints are filed annually against large and small businesses, nonprofit charities, and even labor unions.
This author wishes the association success in overturning PAGA. But best case, it will take years to achieve that result. What does an employer do in the meanwhile? That question is addressed next.
There are many things an employer can do to minimize the risk of getting sued in a PAGA action, and many ways to successfully defend itself if sued; surveying all of them is beyond the scope of this article. Rather, we focus on two important issues.
Given the ever increasing number of new PAGA filings, it is critical that employers have policies and practices that comply with the Labor Code and the IWC Wage Order applicable to the employer's business. Periodically conducted audits to ensure that these policies and practices remain legally compliant are advised. Human resource professionals must stay current on legal developments to address any needed updates. PAGA makes unique the challenges a California employer faces, and these challenges should not be underestimated. While perhaps trite, it is no less true: an ounce of prevention is worth a pound of cure.
Unmanageability has thus emerged as a powerful weapon in defendants' arsenal. It is the plaintiff's burden to show how her PAGA action can be manageably tried, and if she fails to meet her burden, the action cannot go forward. While unmanageability may not apply in a particular case, it should at least be considered in every case, in the course of devising a winning strategy.
1 Cal. Lab. Code, � 2699, subd. (c).
2 Id., � 2699, subd. (i).
3 Id., � 2699, subd. (g)(1).
4 (2009) 46 Cal.4th 969.
5 (2014) 59 Cal.4th 348.
6 Atempa v. Pedrazzani (2018) 27 Cal.App.5th 809, review den. Jan. 16, 2019; Huff v. Securitas Security Services USA, Inc. (2018) 23 Cal.App.5th 745, rehg. den. June 13, 2018, review den. Aug. 8, 2018.
7 California Business & Industrial Alliance v. Becerra, Orange County Superior Court Case No. 30-2018-01035180-CU-JR-CXC (filed Nov. 28, 2018), https://www.cabia.org/pdf/CABIA-Complaint.pdf.
8 Id., Complaint at 2.
9 Cal. Lab. Code, � 2699, subd. (c).
10 See, e.g., Sanchez v. McDonald's Restaurants of California, Inc. (Los Angeles Super. Ct., Dec. 15, 2016, No. BC499888) Court Ruling at pp. 4-5 [striking PAGA representative allegations]; and see Banta v. American Medical Response Inc. (Los Angeles Super. Ct., Apr. 25, 2018, No. BC393113) Order [same]; Martinez v. California Pizza Kitchen, Inc. and Hernandez v. California Pizza Kitchen, Inc. (Los Angeles Super. Ct., Mar. 30, 2015, Nos. BC373758, BC441231) Orders [same]; Bright v. 99 Cents Only Stores (Los Angeles Super. Ct., Dec. 7, 2011, No. BC415527) Order [same]; Munoz v. Acapulco Rest., Inc. (Los Angeles Super. Ct., Oct. 21, 2010, No. BC393912) Order [same].
11 See, e.g., Amiri v. Cox Communications California, LLC (C.D. Cal. 2017) 272 F.Supp.3d 1187, 1195 [striking PAGA claims as unmanageable where the alleged Labor Code violations were based on the plaintiff's experience rather than on policies or practices common to "aggrieved employees," and "liability determinations will require individualized inquiries"]; Salazar v. McDonald's Corp. (N.D. Cal., Jan. 5, 2017, No. 14-cv-02096-RS) 2017 WL 88999, at *9 [granting defendant's motion to strike representative PAGA claim]; Brown v. American Airlines, Inc. (C.D. Cal., Oct. 5, 2015, No. CV 10-8431-AG (PJWx)) 2015 WL 6735217, at *4 ["Court finds manageability issues exist regarding PAGA overtime claims here. There appears to be too many individualized assessments to determine PAGA violations concerning overtime pay."]; Raphael v. Tesoro Ref. and Mktg. Co. LLC (C.D. Cal., Sept. 25, 2015, No. 2:15-CV-02862-ODW) 2015 WL 5680310, at *3 ["Court would have to engage in a multitude of individualized inquires making the PAGA action unmanageable and inappropriate."]; Bowers v. First Student, Inc. (C.D. Cal., Apr. 23, 2015, No. 2:14-CV-8866-ODW (Ex)) 2015 WL 1862914, at *4 [same]; Litty v. Merrill Lynch & Co. (C.D. Cal., Nov. 10, 2014, No. CV 14-0425 PA PJWx) 2014 WL 5904904, at *3 [same]; Ortiz v. CVS Caremark Corp. (N.D. Cal., Mar. 19, 2014, No. C-12-05859 EDL) 2014 WL 1117614, at *3-4 [same].
12 Williams v. Superior Court (2017) 3 Cal.5th 531, 559.

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