Advocates for Justice

PAGA allows an aggrieved employee the right to pursue civil penalties on behalf of the State of California.  Under PAGA, the employee can collect and keep 25% of fines that would ordinarily only be collectable by the state.  In addition, the employee can pursue penalties for violations on behalf of other current or former employees who were similarly situated, making it similar to a class action. (Lab. Code, § 2699.)  With fines as high as $100 per employee, per pay period for an initial violation and $200 per employee per pay period for each subsequent violation (if the Labor Code does not already provide for a penalty), there is a huge price to pay for Labor Code violations pursuant to PAGA.

In Williams, Plaintiff Michael Williams sued Marshalls under PAGA alleging a series of wrongdoing against him and other employees.  Marshalls is a retail chain with stores throughout California. Williams worked for Marshalls’ Costa Mesa store beginning in January 2012, and in 2013.

Specifically, Williams alleged that, on a companywide basis, Marshalls understaffed stores, required employees to work during meal periods without compensation, directed managers to erase meal period violations from its time records, and adopted a “systematic, companywide policy” to pay no premiums for missed breaks.  Marshalls also failed to provide Williams and other aggrieved employees timely wage payment or complete and accurate wage statements, in violation of Lab. Code, §§ 204, 226, subd. (a).  Finally, Marshalls adopted a policy and practice of requiring Williams and other aggrieved employees to carry out company business, such as bank runs and travel for training sessions, without reimbursement. (See Lab. Code, §§ 2800, 2802.)  Williams filed a complaint seeking declaratory relief and civil penalties, to be shared between Williams, other aggrieved employees, and the State of California. (Lab. Code, § 2699, subd. (i).)

Early in discovery, Williams issued two special interrogatories asking Marshalls to supply the name, address, telephone number, and company employment history of each nonexempt California employee in the period March 2012 through February 2014, and the total number of such employees.  Marshalls responded that there were approximately 16,500 employees, but refused to provide their information because statewide employment information beyond Williams’s particular store and job classification was overbroad; William’s request for private information was unduly burdensome without a demonstration by him that he or others were aggrieved; and that third parties would suffer an invasion of the privacy. Williams moved to compel responses.

The trial court only ordered Marshalls to provide employee contact information for the Costa Mesa store where Williams worked, subject to a Belaire-West notice designed to ensure protection of third party privacy rights.  For the company’s other approximately 130 stores, the trial court refused, denying his motion to compel.  Recognizing the discovery motion forced it to render a decision in an uncharted area of law, the trial court certified its order for immediate review and requested appellate guidance.  (See Code Civ. Proc., § 166.1.)

Williams sought writ relief from the denial of access to employee contact information for all but one store.  The Court of Appeal denied Williams’ motion, holding that he did not properly justify the discovery he was seeking, (Code Civ. Proc., § 2031.310, subd. (b)(1)), and in the alternative held that third party privacy interests were implicated, and Williams had no compelling need to allay them.  By holding that a PAGA plaintiff’s access to this discovery was limited, the Court of Appeal essentially capped the size of a putative class in a PAGA action. 

The California Supreme Court reversed.  The highest California court held that an employee bringing a PAGA claim is entitled to the identity of all employees statewide.  Thus, an employee bringing a PAGA action can now identify, and thereby seek and collect state fines on behalf of, a much larger pool of employees. 

Quite remarkably, the Court reversed a large swath of published decisions that had included statements that wherever a privacy right of any sort is implicated the party seeking the discovery must show a “compelling need” for production.  This was too aggressive of a statement, according to the Supreme Court here, and the degree of the privacy invasion is not always so great as to require a “compelling need” for production.  The vast majority of the cases that the Court disapproved were not wage and hour cases, so this ruling may have a broader impact on other areas of law where privacy is asserted as a defense to discovery.

California’s highest court was clear: trial courts cannot condition disclosure of employee contact information on the plaintiff making a prima facie showing on the merits of his claims.  While employers still have defenses based on undue burden and the need to protect employee privacy rights to limit such discovery, there is a substantial burden of proof for these defenses.

Cotchett, Pitre & McCarthy LLP has vast experience handling class action, and individual, employment claims.  If you or someone you know believes that they have been the victim of an employers’ failure to give proper rest or meal breaks, pay overtime, or any other such violation please contact Tamarah Prevost at tprevost@cpmlegal.com.