California Labor Law Violations & The Private Attorney General Act
In some cases, a California employee may bring a lawsuit against an employer on behalf of all employees affected.
The Labor and Workforce Development Agency (LWDA) is California’s labor law enforcement agency authorized to assess and collect civil penalties for specified violations of the Labor Code committed by an employer. However, the LWDA’s resources are limited and they are unable to fully police employers’ compliance with the Labor Code. The Private Attorney General Act of 2004 (PAGA) was enacted essentially to address this issue with a stated goal of improving enforcement of existing Labor Code obligations. See Cal. Lab. Code § 2698. It permits, as an alternative, an aggrieved employee to initiate a private civil action on behalf of himself or herself and other current or former employees to recover civil penalties if the LWDA does not do so.
When an employee brings an action against an employer, it is on behalf of all the employees who suffered labor violations by that employer. For example, if the employer was not paying any employees overtime, the penalties would be on behalf of all employees that were supposed to receive overtime but did not. If the Labor Code provision underlying the PAGA claim already states what the penalty is, then an employee can seek to collect that penalty on behalf of other aggrieved employees.
Where the underlying Labor Code does not already provide a penalty, the PAGA penalty is equal to $100 per employee per pay period for the initial violation and $200 for each employee per pay period for each subsequent violation. The penalties collected in these private civil actions are to be distributed 75 percent to the State and 25 percent to the aggrieved employee. It is unclear whether the employee filing suit is entitled to the entire remaining 25 percent penalty or whether he or she has to split that with the other employees who suffered the same violation(s).
Pre-requisites for Fiilng: Exhaustion of Administrative Remedies
The statutory time frame for filing a PAGA claim is 1 year. However, as a pre-requisite to commencing a PAGA claim, the employee must first comply with certain administrative and exhaustion procedures. There are three different classes of violations under PAGA and each class has slightly different procedures that are required.
The more “serious” violations are listed in § 2699.5. Where the underlying PAGA claim involves one or more of these serious violations, the pre-filing notice requirements and exhaustion requirements apply. Here, the employee is required to give written notice via certified mail, to both the LWDA and employer describing the “specific provisions” alleged to have been violated, including facts and theories to support the alleged violation. Thereafter, the LWDA has time to do its own investigation and can ultimately decide whether to cite the employer for the alleged violations. Only where the LWDA declines to investigate the matter or neglects to respond to the notice within 33 days can an employee choose to proceed with the PAGA claim. Because a PAGA claim can be dismissed outright for failure to comply with the requirements, consulting with an attorney who is specialized in the area and familiar with the procedural requisites is highly recommended. See Caliber Bodyworks, Inc. v. Superior Court, 134 Cal. App. 4th 365, 376 (2005).
One of the violations listed under § 2699.5 and is thus subject to the pre-filing notice and exhaustion requirements discussed above is Section 1102.5, California’s whistleblower statute. Under this statute, an employee engages in protected activity when he or she discloses to a governmental agency reasonably based suspicions of illegal activity.
Note that this statute only protects an employee who reports suspicious illegal activity to a governmental agency - it does not protect an employee who reports his or her suspicion directly to the employer. Thus, if you go tell your boss that you believe they are engaging in illegal activity and get terminated thereafter, you are not protected under the statute. See Green v. Ralee Eng'g Co., 19 Cal. 4th 66 (1998). Also note that it is not necessary that the employee be correct in his belief that prohibited illegal conduct had occurred, only that he have reasonable cause to believe that statute was being violated. See Devlyn v. Lassen Mun. Util. Dist., 737 F. Supp. 2d 1116 (E.D. Cal. 2010).