PAGA and Intervention: Replacing a Plaintiff Who Wants Out
One of the seminal cases in the world of California’s Private Attorneys General Act, or PAGA, is Iskanian v. CLS Transportation. Iskanian wound its way up to the California Supreme Court, which ultimately held that arbitration agreements that attempt to limit a plaintiff’s right to bring PAGA actions are unenforceable.
Now Iskanian is back in the news. After years of struggle, the plaintiff, Mr. Iskanian, decided that he did not want to proceed with the case. (It is unclear why he reached that decision.) In an interesting twist, he then filed a motion, representing himself, to dismiss his individual claims (which were being arbitrated) as well as his PAGA claims. His attorneys then sought to replace him with Mr. Frost, another individual from the group of limousine drivers that Mr. Iskanian belonged to. (more…)
New PAGA Rules Take Effect July 1, 2016
Governor Jerry Brown’s budget for 2016-17 contains several significant amendments to the procedural requirements of the Private Attorneys General Act, or PAGA. These amendments apply to PAGA cases 
filed on or after July 1, 2016. They are limited to cases alleging violations of the California Labor Code provisions listed in Labor Code section 2699.5.
The amendments fall into four large categories: (1) the cost and procedure for filing a PAGA action; (2) the timing of PAGA actions; (3) what information and documents must be provided to the Labor and Workforce Development Agency, or LWDA; and (4) the procedure that an employer must follow to cure PAGA violations. Each amendment goes into effect on July 1, 2016, and does not affect PAGA notices filed before that date.
First, PAGA notices will require a filing fee of $75, and must be submitted both online and by certified mail.
Second, the LWDA, will have longer to review PAGA notices in order to decide whether to investigate the allegations. If the LWDA does not intend to investigate, it shall notify the employer and the employee within 60 days of the postmark date of the PAGA notice. If the LWDA does not provide any such notice, plaintiffs must wait until 65 days after the postmark date of the notice to file suit. (The current rule is 33 days.)
If the LWDA intends to investigate a PAGA complaint, it has 65 days from the postmark date of the notice to inform a plaintiff and his or her employer that it intends to do so. The LWDA then has 120 days to conduct that investigation. The 120 day period can be extended by an additional 60 days.
Third, a plaintiff will need to serve the LWDA with a copy of his or her PAGA complaint. And, if the plaintiff settles his or her PAGA claims, the plaintiff must notify the LWDA of that settlement by providing a copy of the proposed settlement. That must occur when the plaintiff notifies the court of the settlement in order to seek approval under Labor Code 2699(l). (That section requires a court to review and approve any proposed PAGA penalties.) The plaintiff must also provide a copy of any order that denies or approves any PAGA settlement to the LWDA.
Finally, any employer that seeks to cure any PAGA violations must submit its notice electronically.
These amendments follow on the heels of AB 1506, which, as of October 2015, permit employers to cure certain defects on the wage statements that they issue to their employees. In particular, employers are given 33 days to cure defects regarding the dates of the period for which the employees are paid. They can also cure defects regarding the name and address of the employer. However, the burden on an employer seeking to cure these defects is significant: it must provide fully compliant wage statements to each aggrieved employee for each pay period during the three years prior to the date of the notice to the LWDA.
Significantly, the new amendments do not contain additional funding for the LWDA to increase its involvement in PAGA actions. As a result, at least for the immediate future the responsibility for enforcing PAGA claims will continue to rest with plaintiff side employment attorneys.
Commonality, Damages, and Representative Evidence: The Ninth Circuit Properly Cabins Dukes and Comcast, and Underscores Tyson Foods
Over the past decade or so, higher court rulings regarding class actions have tended to dramatically favor either corporations or workers. Corporations have arguably scored the most significant victories. However, with the recent exit of Justice Antonin Scalia from the United States Supreme Court, there are some indications that this tide has begun to turn. At the same time, it is clear that a Republican victory in November 2016 would return a conservative majority to the Court, and devastate any positive momentum in terms of workers’ rights.
Vaquero v. Ashley Furniture Industries, Inc., No. 13-56606 (June 8, 2016), a recent decision of the Ninth Circuit, is a good example of the type of decision that we can hope to see more of in the future. Vaquero does three important things. First, it properly limits the scope of Wal-Mart v. Dukes, 564 U.S. 338 (2011) with respect to the issue of commonality. Second, it limits the impact of Comcast v. Behrend, 133 S. Ct. 1426 (2013) in wage and hour class actions. Finally, it underscores the critical holding in Tyson Foods v. Bouaphakeo, 136 S. Ct. 1036 (2016) that plaintiffs may continue to rely upon representative evidence to prove both liability and damages. As such, Vaquero provides powerful ammunition for workers and their advocates in class actions. (more…)
Arbitration Agreements that Prohibit Class and Collective Actions Violate the National Labor Relations Act
A major storm-the biggest in decades- has been brewing for years in the American workplace. At its center is whether employers can require workers to waive their right to bring class, collection, and representative actions. The implications are enormous: As union membership has declined, workers have relied more on litigation to stop companies from breaking the law. If employers succeed in stripping workers of the right to do so, the results will be grim indeed.
Until recently, the field of combat had consisted of, on the workers’ side, the National Labor Relations Board, which held in D.R. Horton that such agreements violate Section 7 of the National Labor Relations Act (NLRA). On the employers’ side is a series Circuit Court decisions, D.R. Horton v. NLRB (5th Cir. 2013); Owen v. Bristol Care, Inc. (8th Cir. 2013); Sutherland v. Ernst & Young LLP (2d Cir. 2013); and Richards v. Ernst & Young, LLP (9th Cir. 2013). Each of those cases, to some degree, rejected the NLRB’s decision in D.R. Horton.
That field shifted dramatically on May 26, 2016. In Lewis v. Epic Systems Corporation, the Court of Appeals for the Seventh Circuit held that an arbitration agreement that prohibited class and collective actions violates Section 7 of the NLRA and was therefore not enforceable. [In a post dated February 2, 2016, I discussed a similar ruling by the Hon. Dolly M. Gee, a courageous federal judge.] As the first Circuit Court to reach this holding, Lewis changed the legal landscape significantly in a manner that benefits workers. (more…)
Hunter Pyle to speak about Workers’ Rights at Swiss Conference
I will be speaking at two conferences in Lausanne, Switzerland on May 27 and 27, 2016, along with a colleague, Todd Jackson, of Feinberg, Jackson, Worthman & Wasow. We have been invited by a Swiss attorney and law professor, Bettina Kahil. Professor Kahil audited our employment law course at Berkeley Law School in 2015. (more…)
Article III Standing and the U.S. Supreme Court
One of the big picture struggles playing out in federal courts is how much injury a plaintiff must suffer in order to have standing to sue under Article III of the U.S. Constitution. This issue is important because many laws provide rights to employees that are procedural in nature. For example, California Labor Code section 226 requires companies to provide certain information on an employee’s pay stub. Similarly, California’s Investigative Consumer Reporting Agencies Act (ICRAA) requires that companies give notice before running a background check on an employee. A heightened standing requirement could impact the ability of employees to pursue such claims in federal court. (more…)
Representative Evidence May Be Used to Prove Class Action Wage Claims
In a case of national importance, the U.S. Supreme Court ruled that workers could use representative or statistical evidence to prove their claims for overtime under the Fair Labor 
Standards Act (“FLSA”). Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036 (2016) (“Tyson Foods”). The case involved workers at a meat-processing plant in Iowa. They claimed that Tyson Foods did not pay them for the time they spent putting on and taking off (“donning and doffing”) protective equipment for their dangerous work, or for the time they spent walking to and from their workstations in the plant. At trial the workers used a report from an industrial relations expert to show the amount of time they spent donning and doffing. The expert had done videotaped observations to find out how long these activities usually took and then averaged the times. The average times were added to each employee’s timesheets to determine which employees worked more than 40 hours per week if their donning and doffing time was taken into account. The trial court accepted this evidence and the jury awarded the workers $2.9 million in unpaid wages. (more…)
Is Your Employer Required to Provide You With a Seat?
California employers require many employees to stand all day, despite the fact that they could provide seats if they wanted to. This practice is common in the retail industry, among others. But is it legal?
For certain employees, under certain circumstances, the answer is no. Many of the California wage orders contain language requiring that “[a]ll working employees shall be provided with suitable seats when the nature of the work reasonably permits the use of seats.” They also provide that “[w]hen employees are not engaged in the active duties of their employment and the nature of the work requires standing, an adequate number of suitable seats shall be placed in reasonable proximity to the work area and employees shall be permitted to use such seats when it does not interfere with the performance of their duties.”
When an employer fails to meet either of these requirements, it may be subject to penalties under California’s Private Attorney General Act (“PAGA”). Although the wage orders themselves do not provide for penalties for violating seating requirements, California Labor Code section 1198 prohibits employers from violating the wage orders. PAGA permits employees to bring claims for civil penalties based upon violations of the Labor Code. Therefore, employees can bring PAGA claims for failure to provide suitable seating in violation of the wage orders. (more…)
9th Circuit follows Supreme Court: Paying Off Lead Plaintiffs Doesn’t Moot Class Actions
In Chen v. Allstate Insurance Co., the first decision to take up the matter since Campbell-Ewald Co. v. Gomez, the Ninth Circuit has held that a company cannot pick off lead plaintiffs in a class action by paying them a full settlement. This is an important ruling because some companies were attempting to argue that while Campbell-Ewald held that settlement offers did not moot potential class actions, settlement payments were somehow different. Thus, in Chen, the defendant had offered $20,000 to settle the plaintiff’s claims. When the plaintiff rejected that offer, the defendant put the money in an escrow account. The defendant then argued that there was no longer any case or controversy because it had satisfied the plaintiff’s claims.
Both Chief U.S. District Judge Phyllis Hamilton and the Ninth Circuit disagreed. The court held that a claim becomes moot when a plaintiff receives complete relief on their claim, not when such relief is offered. Depositing money in an escrow account is offering relief, but it not receiving it.
Class actions are an important tool for protecting the rights of large groups of people who have been wronged. If you have a question about your rights, please feel free to contact Hunter Pyle Law for a free initial consultation.
The Timing of Rest Breaks: Before or After Meal Breaks, and Can a Company Combine Breaks into One Long Break?
Two questions have bedevilled practitioners representing workers in California ever since the California Supreme Court issued Brinker Restaurant Corp. v. Superior Court in 2012: In a shift that qualifies for two rest breaks and one meal break, are employers required to provide one rest break before the meal break and the other one after? And, on a related note, can an employer combine multiple rest breaks into one long rest break?
In Rodriguez v. E.M.E., Inc. (April 22, 2016), the employees worked eight hour shifts. The defendant provided them with one meal break and one 20 minute rest break that fell either before or after the meal break. The Second District Court of Appeal used this scenario to provide some critical guidance with respect to when and how employers must schedule rest breaks. (more…)