Very few courts have taken up the issue of the PAGA claim. While the law has been on the books for close to 10 years, PAGA was not initially embraced by the private bar. Many practitioners saw it as an annoyance to have to wait the 33 days before amending. Furthermore, at the conclusion of the case some amount would have to be allocated to the state. This drove people away and claims were not brought.
In the wake of Supreme Court's decision in ATT v. Concepcion and the Court of Appeal in Brown v. Ralph's embracing PAGA as state action not subject to the FAA, many have been giving PAGA a second look as a means to avoid arbitration. Additionally, with certain technical violations like Labor Code Section 226(a) in favor as of late, PAGA offers a more streamlined litigation strategy. Finally, the California Supreme Court's decision in Arias v. Superior Court where it was determined that PAGA claims need not be certified offered significant benefits.
So while the playing field has been largely defined by these prior cases, two major issues remain. One, Iskanian v. CLS, which is pending in the California Supreme court will tell us if arbitration issues can avoid the ire of the FAA. Second, the issue of how a PAGA claim will be tried is largely undefined.
The only published case on a PAGA case post-judgment is Thurman v. Bayshore Transit Management, Inc. (2012) 203 Cal.App.4th 1112. Many questions are not answered by Thurman. Specifically, who has the burden in a post-Brinker world. Consider this example, a company has a non-existent or unlawful policy regarding meal and rest breaks. Under Brinker v. Superior Court, they are “liable.” If there is no policy, then liability attaches is the way Brinker reads.
Unfortunately, defendants argue, they actually got the breaks even if the policy is flawed. For meals breaks, this is unsustainable for them because records are required which will reveal the lack of breaks, but for rest periods no records are required. Defendants then argue for rest periods, how can this be proven up except by representative testimony. We would argue in reply, wait a second, they already lost, the Brinker decision says they are liable, so whether or not the breaks might have actually been taken is irrelevant because the failure to have a proper policy attaches liability. If anything defendant would have the burden to negate this finding to mitigate its damages, if it is even allowed to do that. This implicates Duran v. U.S. Bank currently on review with the California Supreme Court regarding representative testimony in a class context.
So we wait. It would be interesting to see a PAGA decision go up to the Court of Appeal post-judgment to determine how these claims should in fact be tried. While there are many arguments, the law is quite unsettled, and yet our firm continues to prosecute these claims as the best way to create change in corporate America.