Notwithstanding the recent limitations on class action lawsuits nationwide, California courts continue to expand the scope of representative actions brought under Private Attorneys General Act (PAGA). On May 23, 2018, the California Court of Appeal held that an employee bringing an action under PAGA against his or her employer may seek penalties for every Labor Code violation committed by that employer – including those that did not apply to the employee personally – as long as the employee was affected by at least one Labor Code violation.
Under the PAGA, an aggrieved employee has the authority to bring a representative lawsuit against a current or former employer to recover civil penalties based on violations of the California Labor Code. The employee may bring the lawsuit on behalf of themselves, as well as other aggrieved employees and the State of California, without the need to satisfy the class certification requirements. Notably, the California Supreme Court has held that class action waivers in employment arbitration agreements do not apply to PAGA actions.
In Huff v. Securitas Security Services USA, Inc., the California Court of Appeal addressed the issue of whether a plaintiff bringing an action under PAGA may seek penalties not only for the Labor Code violations that affected him or her, but also for different violations that affected other employees. In reaching its decision, the Court relied on the statutory language of PAGA, which defines an "aggrieved employee" as a person affected by "one or more of the alleged violations" of the Labor Code. Based on this language, the Court held that as long as the employee could prove he or she was affected by at least one Labor Code violation in the PAGA action, he or she is permitted to pursue penalties on behalf of other employees for additional violations, even those that did not affect him or her.
The Huff decision is a prime example of how California courts continue to expand the scope of the PAGA to the detriment of employers. As a direct result of this holding as well as other employee-friendly PAGA decisions issued by California courts, employers in California can expect to see an increased number of PAGA actions, alleging an even wider range of potential Labor Code violations. In light of the direction PAGA case law is headed in California, employers should take steps to ensure that their employment policies and practice are compliant with all applicable Labor Code provisions and conduct an audit of their employment practices when appropriate.
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