On September 12, 2019, the California Supreme Court issued its decision in ZB, N.A. v. Superior Court, which resolved a split of authority regarding whether an employer may compel arbitration of an employee’s Private Attorneys General Act (“PAGA”) claim seeking unpaid wages under Labor Code section 558. In reaching its conclusion, the Court first answered the “more fundamental question” of whether a plaintiff may seek unpaid wages under PAGA: to which the answer is no. Therefore, ZB’s motion to compel arbitration should have been denied. READ MORE
A recent decision by the California Court of Appeal provides two important reminders for practitioners handling Private Attorneys General Act (“PAGA”) claims. First, exhausting administrative proceedings matters. Second, PAGA claims are representative claims – not individual actions.
Under PAGA, an “aggrieved employee” may file a representative action on behalf of himself or herself and other current and former employees to recover civil penalties for violations of the California Labor Code. READ MORE
In the first federal court in California to issue a rule on classification of gig-economy workers, the Northern District of California recently concluded that restaurant delivery drivers are properly classified as independent contractors instead of employees under California law.
In Lawson v. Grubhub, Inc., No. 15-cv-05128-JSC (N.D. Cal. Feb. 8, 2018), Plaintiff Raef Lawson worked as a restaurant delivery driver for Grubhub for four months in late 2015 and early 2016. Grubhub is part of the growing gig-economy, connecting diners to local restaurants through its internet food ordering app. Lawson brought his claims both in an individual capacity and as a representative action pursuant to the California Private Attorney General Act (PAGA). The critical question before the court was whether Lawson was an employee or an independent contractor. READ MORE
Since its inception, the Private Attorneys General Act of 2004 (“PAGA”) has been a thorn in employers’ sides by allowing “aggrieved employees” to seek civil penalties on behalf of the State of California and other “aggrieved employees” for violations of the California Labor Code. In a small victory for employers, the California Court of Appeal recently bestowed a key limitation on what it means to be an aggrieved employee for purposes of PAGA standing. Specifically, the court held that an employee who settles his individual Labor Code claims against his employer no longer has standing as an “aggrieved employee” under PAGA. READ MORE
The Private Attorneys General Act of 2004 (“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. In January, Governor Brown submitted a budget proposal that sought greater oversight of PAGA claims and amendments to the PAGA statute. On June 15, 2016, the California Legislature approved Governor Brown’s budget proposal which included significant amendments to PAGA (Labor Sections 2698-2699.5). SB 836 went into effect on June 27, 2016 and provides:
- The Labor and Workforce Development Agency (“LWDA”), the agency which coordinates workforce programs by overseeing seven major departments that serve California businesses and workers now has 60 days to review a notice under Labor Code § 2699.3(a). Prior to the amendments, the LWDA had 30 days to review. Additionally, the time for the LWDA to investigate a claim is extended to 180 days (it was 120 days);
- A Plaintiff cannot file a civil action until 65 days after sending notice to the LWDA (previously 33 days);
- The LWDA must be provided with a copy of any proposed settlement of a PAGA action at the time it is submitted to the court;
- A copy of the court’s judgment and any other order that awards or denies PAGA penalties must be provided to LWDA;
- All items that are required to be provided to the LWDA must be submitted online, including PAGA claim notices and employer cure notices or other responses;
- A $75 filing fee is required for a new PAGA claim notice and also for any initial employer response to a new PAGA claim notice. The filing fee may be waived if the party on whose behalf the notice or response is filed is entitled to in forma pauperis status; and
- When a plaintiff files a new PAGA lawsuit in court, a filed-stamped copy of the complaint must be provided to LWDA. This requirement only applies to cases in which the initial PAGA claim notice was filed on or after July 1, 2016.
California Governor Jerry Brown’s administration recently submitted a budget proposal to the California Legislature that would increase State oversight of Private Attorneys General Act (PAGA) claims and amend the PAGA statute accordingly. The proposal has significant implications for the administration of PAGA claims going forward.
On September 28, 2015, the Ninth Circuit held in Shukri Sakkab v. Luxottica Retail North America, Inc. that the FAA does not preempt the rule that the California Supreme Court enunciated in Iskanian v. CLS Transportation that California law bars the waiver of Private Attorneys General Act (“PAGA”) claims. As a result, California employers will likely see an increase in the filing of PAGA cases as employees use them as a vehicle for representative actions outside of arbitration.