In a significant victory for California employers, the U.S. Court of Appeals for the Ninth Circuit reversed a $102 million award against Walmart in a suit alleging that the retailer violated the California Labor Code’s wage statement and meal-break provisions. The decision is Magadia v. Wal-Mart Associates, Inc., May 28, 2021, No. 19-16184.

The Ninth Circuit’s opinion is an important clarification of the cognizable harm required to establish Article III standing under the Private Attorneys General Act (“PAGA”) and the Labor Code’s wage statement requirements.

The critical takeaways:

  • An employee does not have standing to bring PAGA claims in federal court for alleged Labor Code violations that the employee themselves did not suffer.
  • An employer may make lump-sum payments as a retroactive adjustment to employees’ overtime rate to factor in bonus payments without identifying a corresponding “hourly rate” for the payment on employees’ wage statements.