California Supreme Court Holds Representative Claims Under PAGA Need Not Meet Class Action Requirements

July 1, 2009

Summary

On June 29, 2009, the California Supreme Court issued an opinion in Arias v. Superior Court, holding that an employee bringing a "representative" claim under the Labor Code's Private Attorneys General Act ("PAGA") need not satisfy the strict procedural requirements applicable to class actions. Thus, under PAGA, an employee can bring an action to recover civil penalties for Labor Code violations on behalf of himself, and other current and former employees, without ever having to certify a class action.

However, in the same opinion, the Supreme Court confirmed that an employee bringing claims in a representative capacity under the Unfair Competition Law must satisfy class action requirements.

Discussion

The PAGA allows an employee to bring a representative civil action to recover penalties for Labor Code violations that could otherwise be brought by state labor enforcement agencies.

Arias sued his former employer alleging the employer failed to provide proper itemized wage statements, failed to maintain adequate payroll records, failed to pay all wages upon termination, failed to provide meal and rest periods, and failed to provide necessary tools and equipment.

The employer argued that allowing PAGA claims to proceed without class certification would constitute a violation of the employer's due process rights. The California Supreme Court rejected this argument, stating that a representative action brought under PAGA confers upon the employee the same rights and interests as the state labor enforcement agencies. Due process rights were not implicated because the state could bring a similar enforcement action.

What This Means

An aggrieved employee suing under PAGA can recover civil penalties on behalf of other similarly situated employees without bringing the case as a class action. This significantly lowers the bar for litigious employees and their counsel.

This case serves as a cautionary reminder to all California employers of the importance of closely monitoring pay practices to ensure complete compliance with the strict requirements of California law. Particularly, employers should schedule routine audits of meal and rest break, overtime, payroll, posting and record keeping practices, all of which give rise to numerous potential penalties under PAGA.

This E-Update was authored by Aaron Buckley and Timothy Keegan.  For more information, or questions, please contact Mr. Buckley, Mr. Keegan or any Paul, Plevin attorney at (619) 237-5200.

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