California PAGA Wage Action Allowed to Proceed

The California Private Attorneys General Act is a law that grants standing to individual employees to sue employers that commit violations of the labor code on behalf of the state. These actions can be representative claims filed on behalf of all similarly situated employees. Employers can be assessed civil penalties per employee and per violation for each pay period during which they occurred, and a successful plaintiff can recover a percentage of the penalties the state recovers as a reward. When an employer has a pattern of committing ongoing labor code violations, the penalties can quickly stack up, leading to potentially large verdicts and settlements.

In Balderas v. Fresh Start Harvesting, Inc., Cal. Ct. App, No. B326759, the Court of Appeal considered whether an individual employee must first pursue an individual claim against their employer before filing a representative action or if they can instead opt only to file a representative PAGA claim. The trial court had ruled against the plaintiff, finding that her complaint could not be filed because she had not pursued an individual claim first. However, the plaintiff alleged the trial court relied on language in a US Supreme Court decision that wasn't binding on PAGA cases under state law.

Lizbeth Balderas was employed by Fresh Start Harvesting. She filed a lawsuit against the company in June 2022 under the Private Attorney Generals Act (PAGA) on behalf of herself and other employees with similar grievances. Balderas alleged several Labor Code violations, including the company's failure to provide compliant meal and rest breaks, untimely wage payments, erroneous wage statements, and failure to pay wages when she was terminated.

Fresh Start responded by filing a motion to compel arbitration. However, the court moved sua sponte to strike Balderas's complaint. The trial court judge stated her complaint should be stricken because Balderas had failed to pursue a private action before filing a PAGA lawsuit. Balderas opposed the court's motion, arguing that she had properly filed her case as a representative action and that it wasn't necessary for her to file a separate individual claim first. The court denied her opposition and entered an order to strike her pleading. Balderas appealed.

Issue: Whether plaintiffs are required to pursue individual actions before filing representative PAGA lawsuits?

The plaintiff argued that the Private Attorneys General Act allows plaintiffs to file representative actions without requiring they first pursue individual complaints. She argued that the trial court erroneously relied on language from a case decided by the U.S. Supreme Court that didn't apply to her case.

Rule: PAGA gives individual employees the right to file representative actions for themselves and similarly aggrieved employees.

The Private Attorneys General Act (PAGA) was enacted to grant employees the right to pursue representative actions against employers that violate their labor rights under the California Labor Code. The statute is remedial and is designed to disincentivize employers from committing labor code violations by giving an individual employee standing to pursue a representative action on the state's behalf regardless of their separate individual claims.

The California Private Attorneys General Act is a law that allows individual employees to file lawsuits on the state's behalf against their employers for alleged labor code violations. They can recover civil penalties on their behalf, the behalf of other aggrieved employees, and the state through a PAGA claim.

Even when employers have forced employees to sign mandatory arbitration clauses, they can still pursue PAGA actions on behalf of all aggrieved employees. This is because the aggrieved employee is stepping into the state's shoes to recover penalties on the state's behalf, and the state is not subject to a mandatory arbitration clause. Workers can file PAGA claims based on a large variety of violations of the California Labor Code, and penalties can quickly add up for ongoing violations since they are assessed by every pay period during which the employer violated the law. However, an employee must demonstrate they meet the statute's standing requirements when they file the complaint.

In Balderas's case, the Court of Appeal began with an examination of standing to file a PAGA representative action. The legislature's goal in passing PAGA was to grant a broad statutory right to employees to pursue representative actions against their employers when they commit violations of the labor code. Filing a single claim might be cost-prohibitive as compared to the potential penalties an individual plaintiff might recover. By contrast, a representative action in which the plaintiff brings a claim on their behalf as well as on behalf of all similarly situated employees is less cost-prohibitive and likelier to stop employers from engaging in patterns of labor code violations.

The California legislature wanted to grant individual employees the right to pursue representative actions on behalf of fellow employees and the state because the state could recover far more penalties from bad actors than it might on its own. The state relies on individual employees to step into the state's shoes and file suits to recover penalties and incentivizes representative actions by allowing successful plaintiffs to recover a percentage of the penalties as a reward.

California courts have consistently ruled that PAGA doesn't require individuals to pursue individual claims separately from representative actions. However, the U.S. Supreme Court ruled in Viking River Cruises Inc. v. Moriana, No. 20-1573 that in PAGA actions, plaintiffs can pursue non-individual claims only when they also pursue an individual claim. The trial court relied on this language to strike Balderas's complaint. However, the Court of Appeal noted that a representative action is not the same as non-individual claims.

Balderas argued the trial court was incorrect because the Supreme Court in Viking River misunderstood California's PAGA standing requirements, which the California Supreme Court has agreed to in several cases. She argued the trial court erred by relying on the Supreme Court's decision because it was not binding on the trial court, but the California Supreme Court's decision is binding.

Under PAGA, a plaintiff has standing to pursue a representative action as long as they allege the company employed them and that they are someone against whom the company committed labor law violations. Balderas met this standing requirement in her complaint and thus did not need to file a separate individual claim to pursue a case under PAGA.

However, FreshStart argued that Balderas's assertions in her complaint were insufficient to meet the standing requirements. However, the California Supreme Court had already decided not to impose other requirements beyond what is included in the PAGA statute. Instead, the Court of Appeal found that it was enough to follow the law's requirements instead of requiring more than what it mandates.

The California Court of Appeal reversed the trial court's decision and remanded the case for further proceedings. Balderas was awarded her costs on appeal.

If you believe your employer has committed labor code violations against you and your co-workers, you might have standing to file a representative action under the California Private Attorneys General Act. If you do, you could recover a percentage of the total penalties collected by the state. To learn more about your options and the right of action under PAGA, consult an experienced Los Angeles labor and employment lawyer at the law firm of Steven M. Sweat, APC. We offer free case evaluations and can explain whether your claim is legally merited. Call us today to request an appointment at 866.966.5240.