Can these cases be defended, and if so, how?


The Private Attorney General Act (PAGA)(1) is highly confusing for California employers. In plain English, PAGA allows a court to award a penalty for each pay period that includes a wage-and-hour violation. It does not include the damages for the underlying violation, just the discretionary penalty, which starts at $100 per employee per pay period, and increases to $200 and even $250 (or in extreme cases of knowing violations: $1,000).

This works as follows:

  • if an employee takes a late meal break, but the system does not generate a meal premium (or the manager incorrectly removed it), that is one PAGA penalty;
  • if the employee was also too busy that day to take a duty-free rest break, but no rest premium was paid, that is another PAGA penalty;
  • if the employer still rounds up time, so that a few minutes were inadvertently removed from that shift, that is three PAGA penalties; and
  • if the employee was paid a shift premium for working a second shift, but it was not included in their overtime rate for that week, that brings the PAGA penalty number to four. This is referred to as stacking.

Assuming there are 100 employees who are paid weekly, that is a possible 5,200 pay periods per year where PAGA penalties can be incurred.

Furthermore, opposing counsel receives attorneys' fees, typically at least one third of the total amount recovered. Sceptics (or realists, depending on one's perspective) will say that attorneys' fees drive these cases. Any employer who has been sued under PAGA will likely agree.

Can these cases be defended, and if so, how?

One way to defend is to have great policies and superb compliance in all areas of wage-and-hour law. The owner can try to explain to opposing counsel why there is nothing to recover (or not enough to warrant their time and energy to pursue). It may be argued that PAGA penalties are discretionary, and that no judge will award stacked penalties, or even any penalties, for a few isolated glitches. This strategy may be successful and it may convince the other side to drop the case. Or it may be possible to reach an agreement to mediate early and to settle expeditiously for less than the cost of litigation.

Another way is to litigate the case and raise the defence of manageability. That defence was recently bolstered by the California Court of Appeal decision in Wesson v Staples(2) which affirmed a court's ability to dismiss a PAGA claim on a motion to strike when the plaintiff's counsel is unable to provide a reasonable trial plan. The trial plan is not reasonable if there is no issue of common proof, and each employee's experiences have to be evaluated on an individualised basis. Notably, this decision came after class certification was denied. That means a lot of time in litigation, and a great deal of discovery. In short, the manageability defence only works after sufficient discovery for the plaintiff to set forth a trial plan. In reality, that means a year (or likely more) of litigation.

Applied to the facts as set forth above, the manageability defence could proceed as follows:

  • the company had the right policies, and did pay a meal premium, but individual managers may have improperly removed it because they did not understand the waivers, so each removed premium needs to be analysed separately;
  • some managers simply forgot to code a missed rest premium, thereby requiring an analysis of the facts surrounding each premium not provided;
  • rounding up benefits employees as much as the employer, and is neutral overall, so the issue would have to be reviewed as to each employee to determine a gain or loss; or
  • shift premium is sometimes included in the overtime rate, and sometimes not, so again, no general rule on which to rely.

This is not quite a watertight defence, but something helpful for employers who want to fight back and litigate their PAGA cases.

For further information on this topic please contact Nancy Yaffe at Fox Rothschild LLP by telephone (+1 215 299 2164) or email ([email protected]). The Fox Rothschild LLP website can be accessed at


(1) Further information is available here.

(2) Further information is available here.