United States: PAGA: A Call To Arms

Whatever good intentions its proponents may claim, the Labor Code Private Attorneys General Act of 2004 (PAGA) created perverse incentives for plaintiff's lawyers to file representative actions seeking civil penalties for violations of the California Labor Code on behalf of all "aggrieved employees" of the named plaintiff's employer. The named plaintiff often does not know she is being used for purposes of bringing a PAGA action. The alleged violations are often hyper-technical or trivial, if a violation at all – "gotcha" claims, as plaintiff's lawyers like to call them. The "aggrieved employees" – who can number in the tens of thousands if the target is a large employer – most often have suffered no injury. The employer, facing potentially business-destroying liability, too often settles for an amount of money bearing no relationship to the violations allegedly committed. And the plaintiff's lawyers pocket 30-35 percent of the settlement for themselves.

This article addresses some of the pressing issues around PAGA, in three parts. First, it provides an overview of salient aspects of PAGA and the case law interpreting it. Next, it discusses a recently-filed lawsuit that seeks to have PAGA declared unconstitutional. Finally, it offers suggestions for warding off a PAGA action or winning the action if brought.

The takeaway: In today's climate, virtually every California employer is vulnerable to a PAGA attack and taking steps to avoid or defeat PAGA liability should be given high priority.

PAGA: An Overview

PAGA deputizes an "aggrieved employee" – any person employed "by the alleged violator and against whom one or more of the alleged violations was committed"1 – to file suit as proxy for the State of California to recover civil penalties on behalf of himself and other "aggrieved employees" for alleged violations of the Labor Code. Seventy-five percent of any penalties recovered in the action, whether by settlement or judgment, go to the State, and the remaining 25 percent go to the alleged aggrieved employees.2 While a single penalty for a single violation suffered by a single individual may be trifling, when aggregated across an entire workforce for multiple alleged violations, the amount of these penalties can be staggering. And, attorneys' fees are awardable to the plaintiff employee who prevails in the action, but not to the prevailing employer.3

Starting in 2009, a number of court decisions eliminated several defenses theretofore available to employers defending PAGA actions. Notably among them, in Arias v. Superior Court,4 the California Supreme Court held that PAGA actions are not subject to state-law requirements for a case to be certified as a class action. In Iskanian v. CLS Transportation Los Angeles, LLC,5 the Supreme Court held that an arbitration agreement waiving representative PAGA claims is unenforceable as a matter of California public policy. In light of Arias and Iskanian, plaintiff's lawyers increasingly join class action claims with PAGA claims or solely allege PAGA claims in their complaints. In the past year, two additional court of appeal decisions addressing the scope of PAGA have emboldened plaintiffs' lawyers to interpret it even more broadly, resulting in increasingly expansive – and expensive – PAGA suits.6


Apparently deciding enough is enough, a recently-organized association holding itself out as representing California-based employers filed suit against the State of California on November 28, 2018, seeking to have PAGA declared unconstitutional on separation of powers, procedural and substantive due process, excessive fines and unusual punishment, and equal protection grounds.7 The association's complaint is well-researched, thorough, and thoughtful. The opening paragraphs sum up its position:

"Are California business owners who inadvertently make a payroll error equivalent to the worst perpetrators of hate crimes? That's the twisted logic that, more than a decade ago, led the state legislature to pass a harmful law called the Private Attorneys General Act (PAGA).

"PAGA was conceived as a means to help employees right workplace wrongs without further burdening the state bureaucracy. Trial attorneys quickly discovered that they could use the law for their own benefit; today, thousands of PAGA complaints are filed annually against large and small businesses, nonprofit charities, and even labor unions.

"PAGA, as written and practiced, is unconstitutional. With this complaint, we're asking the state to enforce its own laws – rather than transferring the state's power to private attorneys who operate for their own personal gain."8

This author wishes the association success in overturning PAGA. But best case, it will take years to achieve that result. What does an employer do in the meanwhile? That question is addressed next.


There are many things an employer can do to minimize the risk of getting sued in a PAGA action, and many ways to successfully defend itself if sued; surveying all of them is beyond the scope of this article. Rather, we focus on two important issues.

An Ounce of Prevention

Given the ever increasing number of new PAGA filings, it is critical that employers have policies and practices that comply with the Labor Code and the IWC Wage Order applicable to the employer's business. Periodically conducted audits to ensure that these policies and practices remain legally compliant are advised. Human resource professionals must stay current on legal developments to address any needed updates. PAGA makes unique the challenges a California employer faces, and these challenges should not be underestimated. While perhaps trite, it is no less true: an ounce of prevention is worth a pound of cure.

Defeating a PAGA Action as Unmanageable

PAGA empowers an "aggrieved employee" only to sue on behalf of other employees who are "aggrieved," i.e., employees "against whom one or more alleged violations was committed."9 California trial courts are increasingly striking PAGA claims where the experience of every allegedly aggrieved employee would be required to show that they were, in fact, aggrieved, rendering the claim unmanageable because countless mini-trials would be necessary before the aggrieved employees were known and the claim could proceed.10 So too are federal district courts striking PAGA claims when they cannot be manageably tried.11 Consistent with this emerging body of law, the California Supreme Court recently recognized the common-sense fact that PAGA actions must be "manageable."12

Unmanageability has thus emerged as a powerful weapon in defendants' arsenal. It is the plaintiff's burden to show how her PAGA action can be manageably tried, and if she fails to meet her burden, the action cannot go forward. While unmanageability may not apply in a particular case, it should at least be considered in every case, in the course of devising a winning strategy.


1 Cal. Lab. Code, § 2699, subd. (c).

2 Id., § 2699, subd. (i).

3 Id., § 2699, subd. (g)(1).

4 (2009) 46 Cal.4th 969.

5 (2014) 59 Cal.4th 348.

6 Atempa v. Pedrazzani (2018) 27 Cal.App.5th 809, review den. Jan. 16, 2019; Huff v. Securitas Security Services USA, Inc. (2018) 23 Cal.App.5th 745, rehg. den. June 13, 2018, review den. Aug. 8, 2018.

7 California Business & Industrial Alliance v. Becerra, Orange County Superior Court Case No. 30-2018-01035180-CU-JR-CXC (filed Nov. 28, 2018), https://www.cabia.org/pdf/CABIA-Complaint.pdf.

8 Id., Complaint at 2.

9 Cal. Lab. Code, § 2699, subd. (c).

10 See, e.g., Sanchez v. McDonald's Restaurants of California, Inc. (Los Angeles Super. Ct., Dec. 15, 2016, No. BC499888) Court Ruling at pp. 4-5 [striking PAGA representative allegations]; and see Banta v. American Medical Response Inc. (Los Angeles Super. Ct., Apr. 25, 2018, No. BC393113) Order [same]; Martinez v. California Pizza Kitchen, Inc. and Hernandez v. California Pizza Kitchen, Inc. (Los Angeles Super. Ct., Mar. 30, 2015, Nos. BC373758, BC441231) Orders [same]; Bright v. 99 Cents Only Stores (Los Angeles Super. Ct., Dec. 7, 2011, No. BC415527) Order [same]; Munoz v. Acapulco Rest., Inc. (Los Angeles Super. Ct., Oct. 21, 2010, No. BC393912) Order [same].

11 See, e.g., Amiri v. Cox Communications California, LLC (C.D. Cal. 2017) 272 F.Supp.3d 1187, 1195 [striking PAGA claims as unmanageable where the alleged Labor Code violations were based on the plaintiff's experience rather than on policies or practices common to "aggrieved employees," and "liability determinations will require individualized inquiries"]; Salazar v. McDonald's Corp. (N.D. Cal., Jan. 5, 2017, No. 14-cv-02096-RS) 2017 WL 88999, at *9 [granting defendant's motion to strike representative PAGA claim]; Brown v. American Airlines, Inc. (C.D. Cal., Oct. 5, 2015, No. CV 10-8431-AG (PJWx)) 2015 WL 6735217, at *4 ["Court finds manageability issues exist regarding PAGA overtime claims here. There appears to be too many individualized assessments to determine PAGA violations concerning overtime pay."]; Raphael v. Tesoro Ref. and Mktg. Co. LLC (C.D. Cal., Sept. 25, 2015, No. 2:15-CV-02862-ODW) 2015 WL 5680310, at *3 ["Court would have to engage in a multitude of individualized inquires making the PAGA action unmanageable and inappropriate."]; Bowers v. First Student, Inc. (C.D. Cal., Apr. 23, 2015, No. 2:14-CV-8866-ODW (Ex)) 2015 WL 1862914, at *4 [same]; Litty v. Merrill Lynch & Co. (C.D. Cal., Nov. 10, 2014, No. CV 14-0425 PA PJWx) 2014 WL 5904904, at *3 [same]; Ortiz v. CVS Caremark Corp. (N.D. Cal., Mar. 19, 2014, No. C-12-05859 EDL) 2014 WL 1117614, at *3-4 [same].

12 Williams v. Superior Court (2017) 3 Cal.5th 531, 559.

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions