Why it matters

On July 13, 2017, the California Supreme Court in Williams v. Superior Court (Marshalls) issued its first opinion addressing the scope of discovery in representative actions brought under the state’s Private Attorneys General Act (Cal. Labor Code §§ 2698 et seq.). In a unanimous decision, the high court reversed a trial court’s discovery order limiting and conditioning discovery of employee contact information in PAGA actions, and held that PAGA plaintiffs have essentially the same broad discovery rights to employer records containing names and contact information for other employees that they would have if the case was filed as a class action.

PAGA has been an increasingly used tool for the California plaintiffs’ bar in employment cases since the California Supreme Court ruled in 2014 that PAGA claims cannot be compelled to individual arbitration. The statute “deputizes” employees to bring claims against their employers on behalf of the state for violations of the California Labor Code which had previously been recoverable only through or by the state’s labor commissioner. The statute can carry expensive penalties for employers, as employees must bring such claims as “representative” actions on behalf of other allegedly aggrieved employees, without having to meet the requirements for class certification.

Previous to this ruling, Williams had been hailed as an important limitation on a plaintiff’s ability to propound burdensome discovery requests on an employer before making a factual showing that “some reason exists to suspect [the employer’s] local practices extend statewide.” In Williams, the plaintiff sought, among other things, contact information for all nonexempt employees in any position at all the employer’s approximately 130 California stores (approximately 16,500 employees), despite the fact that plaintiff had never worked anywhere but the employer’s Costa Mesa location. The trial court and lower appellate court both held that plaintiff would be entitled to such sweeping information only by first showing his claims had some merit. The California Supreme Court rejected such a requirement, endorsing liberal discovery at the onset of a PAGA action, and holding that statewide contact information should be provided before any determination of merit.

The opinion is concerning for employers in that broad (and expensive) discovery rights, like those approved of in Williams, can be used to leverage a company to settle, even when the alleged claims have little or no merit. Moreover, in addition to the burden and expense that come with defending even meritless statewide litigation, the release of employee contact information allows for the potential solicitation of other plaintiffs and the threat of hundreds, if not thousands, of individual claims. The opinion will have broad application in PAGA cases, and may also be used to support discovery of employee names and contact information in class actions and civil litigation, generally.

Detailed discussion

After a little over a year of employment, plaintiff Michael Williams filed a representative action against Marshalls under the Private Attorneys General Act (PAGA), alleging that his former employer failed to provide its employees with meal and rest breaks or premium pay in lieu thereof, among other violations of the state’s Labor Code.

Shortly after bringing his lawsuit, the plaintiff served special interrogatories seeking, among other things, production of the names and contact information of all nonexempt Marshalls employees in California who had worked for the company over a roughly two-year period (approximately 16,500 employees). Marshalls objected to the discovery on the ground it was irrelevant, overbroad and unduly burdensome given that the requests sought information beyond the store at which plaintiff worked and beyond the particular job classification he held. Marshalls also objected on the grounds that the request implicated the privacy rights of its employees and because the plaintiff had provided no proof he actually suffered any injury.

The plaintiff then moved to compel the discovery, arguing the contact information was routinely discoverable in representative employee actions and vital to the prosecution of his PAGA claims.

The trial court granted the motion in part, ordering Marshalls to produce the contact information only for the employees at the Costa Mesa store where the plaintiff worked, and denied production of the contact information of employees at the other 128 Marshalls stores statewide. The trial court added that the plaintiff could renew his bid to get information from the other 128 stores, but that the plaintiff would first have to be deposed so Marshalls could investigate his case and oppose any such renewed bid by showing that the plaintiff’s substantive claims had no factual merit in its opposition to such a motion.

An appellate panel affirmed the order, ruling that discovery of Marshalls’ employees’ contact information statewide was premature.

On July 13, 2017, however, the California Supreme Court reversed those decisions, holding that the “default position” must be that contact information is within a representative action’s proper scope of discovery given PAGA’s public policy goals:

“Our prior decisions and those of the Courts of Appeal firmly establish that in non-PAGA class actions, the contact information of those a plaintiff purports to represent is routinely discoverable as an essential prerequisite to effectively seeking group relief, without any requirement that the plaintiff first show good cause. Nothing in the characteristics of a PAGA suit, essentially a qui tam action filed on behalf of the state to assist it with labor law enforcement, affords a basis for restricting discovery more narrowly. Such discovery, is ‘routinely discoverable as an essential prerequisite to effectively seeking group relief,’ without any preliminary showing of good cause, as a ‘first step to identifying other aggrieved employees and obtaining admissible evidence of the violations and policies alleged in the complaint.’”

In rendering its unanimous ruling, the court rejected Marshalls’ argument that PAGA plaintiffs should have to offer some prima facie showing of the merits of the alleged violations before such broad discovery is permitted: “California law has long made clear that to require a party to supply proof of any claims or defenses as a condition of discovery in support of those claims or defenses is to place the cart before the horse.”

With respect to privacy concerns, the court held that while personal contact information is private, the disclosure of it in this context is not a “serious invasion of privacy.” The court did note, however, that in this instance the plaintiff was “willing to accept as a condition of disclosure, and share the costs of, a Belaire-West notice to employees affording them an opportunity to opt out of having their information shared” and that trial courts “may issue protective orders conditioning discovery ‘on terms and conditions that are just,’ such as requiring confidentiality and prohibiting use outside of the case.”

In sum, the court, in reversing the trial court’s discovery order denying plaintiff’s motion seeking contact information, held that the interrogatory “sought information within, not exceeding, the legitimate scope of discovery” and that “the trial court had no discretion to disregard the allegations of the complaint making this case a statewide representative action from its inception.”

To read the Supreme Court’s Opinion in Williams v. Marshalls of CA, click here.