120 | 2024 Cal-Peculiarities ©2024 Seyfarth Shaw LLP www.seyfarth.com federal court. While the annual number of PAGA notices sent to the LWDA remained under 700 during the first four years of PAGA’s existence, annual LWDA notices numbered in a much higher range—from 1,338 to 2,001— during 2008-2013, then jumped to a range of 3,703 to 6,307 during 2014-2018, and ranged from 2,690 to 6,431 during 2019 to 2021.411 PAGA notices sent to the LWDA decreased to 5,817 in 2022, but rebounded to 7,909 PAGA in 2023.412 A 2021 development further incentivizing PAGA actions was a Court of Appeal decision holding that venue is proper for a PAGA action in any California county where Labor Code violations allegedly occurred, even if the defendant’s principal place of business is not in that county and even though the plaintiff never worked there. Noting that a PAGA plaintiff is suing as the State of California’s designated proxy, the Court of Appeal stated: “We see no reason why the Legislature would restrict the proper venue to the location of an individual employee when she is suing on behalf of all aggrieved employees, not herself, and she has no individual claim.”413 5.15.1 The PAGA legislation When federal and state governments create civil penalties for certain statutory violations, the mission of enforcing these penalties is typically entrusted to public officials who exercise prosecutorial discretion. In California it’s different. PAGA414 created two significant problems for California employers. First, as of 2004, new civil penalties apply to violations of all Labor Code provisions “except those for which a civil penalty is specifically provided.” (See § 7.25.2.)415 Second, “aggrieved employees”416 may sue, in lieu of the Labor Commissioner, to recover the civil penalty, with the plaintiff and other aggrieved employees to collect 25% of the penalties (the remainder going to the state).417 The prevailing plaintiff also can recover costs and attorney fees.418 Recovery of civil penalties is not available, however, if the LWDA or its agencies or employees already have cited the employer for a violation of the same section(s) of the Labor Code based on the same facts and theories.419 The California Supreme Court enhanced PAGA’s power still further in 2009, when it held that PAGA authorizes individuals to sue under PAGA without having to satisfy the requirements of a class action, on the rationale that “an action to recover civil penalties ‘is fundamentally a law enforcement action designed to protect the public and not to benefit private parties.’”420 Calculation of PAGA penalties. PAGA vaguely calls for penalties of $100 for each aggrieved employee per pay period for “the initial violation” and $200 for “each aggrieved employee per pay period for each subsequent violation.”421 How does one determine when a “subsequent violation” has occurred? The Court of Appeal has stated that penalties reach $200 per pay period once the employer “has learned its conduct violates the Labor Code.”422 Does this language indicate that until the Labor Commissioner or a court finds a Labor Code violation, the employer can be assessed only the $100 per pay period for an “initial” violation? Or does it indicate that the employer has been notified of a violation—and thus now faces penalties of $200 per pay period—whenever an employee submits a PAGA notice to the LWDA and the employer? The California Supreme Court has yet to clarify the point.423 Anti-retaliation provision. California employers must not retaliate against any employee for bringing a PAGA claim.424 5.15.2 PAGA amendments Reform legislation mitigated certain aspects of PAGA. The principal reform measures were as follows. DLSE exhaustion requirement. Employees challenging certain Labor Code violations must, before suing, give written notice to the LWDA of the specific violation, to enable the LWDA to investigate and cite the employer for the violation, in which case a private lawsuit cannot proceed.425 The LWDA has 60 days to notify the employee that it intends to investigate the alleged violation, in which case a private lawsuit cannot proceed.426 If the LWDA
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