On July 13, 2017, the California Supreme Court issued a blockbuster decision in Williams v. Superior Court, holding that plaintiffs who bring representative wage-and-hour actions under California's Private Attorney General Act ("PAGA") have broad discovery rights and are entitled to obtain a the names and contact information of other "aggrieved employees" without making a heightened showing that the employer has violated the law. This is the most significant PAGA decision since the Supreme Court held in Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal. 4th 348 (2014), that an employee’s right to bring a representative PAGA action may not be waived through a forced arbitration agreement.
While employers will undoubtedly bemoan the Williams decision, let's just remember that we are on the precipice of a Supreme Court decision in the 2017-2018 term that will likely eviscerate wage-and-hour class actions on a nationwide basis. If the Supreme Court rules as I suspect they will, PAGA will be the only remaining vehicle for employees to bring representative wage-and-hour actions. This shifting class action landscape was undoubtedly on the minds of the Cal Supremes when they issued the pro-employee Williams decision yesterday.
While employment class actions are likely on their way out the door, employees in California can still pursue representative claims on behalf of themselves and other affected employees under the Private Attorney General Act, aka "PAGA." Under PAGA, an "aggrieved employee" can seek penalties and unpaid wages against an employer for violations like the failure to pay overtime and minimum wage, and the failure to provide meal and rest breaks. In Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal. 4th 348 (2014), the California Supreme Court held that an employee cannot be compelled to waive her right to bring a representative PAGA claim in a predispute arbitration agreement. In a trio of cases decided in the past year, the California Court of Appeals held that employers cannot use predispute arbitration agreements to compel a PAGA case to arbitration. See Betancourt v. Prudential Overall Supply, 9 Cal.App.5th 439 (2017); Hernandez v. Ross Stores, Inc., 7 Cal.App.5th 171 (2016); and Tanguilig v. Bloomingdale’s, Inc., 5 Cal.App.5th 665 (2016). This means that employees who have signed arbitration agreements can still bring their representative PAGA actions in court. In response to Iskanian and its progeny, the employer lobby, including the Chamber of Commerce, is hard at work trying to pass legislation to limit PAGA's reach. Their efforts so far have been largely unsuccessful, but who knows what next year's legislative session will bring.
Lauren Teukolsky is the founder and owner of Teukolsky Law, A Professional Corporation.