Jose Arias filed a lawsuit against Angelo Dairy and its owners for unpaid overtime and meal and rest period violations. In addition to alleging numerous violations of the California Labor Code and other California regulations, he also sought to bring a representative action on behalf of his coworkers under California’s Labor Code Private Attorneys General Act (“PAGA”). However, Arias did not try to comply with California’s class action requirements. Angelo Dairy successfully moved to strike the causes of action brought by Arias in his representative capacity on the ground that Arias did not comply with class action pleading requirements. Arias then sought review of the trial court’s decision in the California Court of Appeal for the Third District.
On appeal, Angelo Dairy argued that a named plaintiff could not recover on behalf of unnamed non-parties in a representative action because this would raise serious fiduciary and constitution- al concerns. In particular, Angelo Dairy stressed that a non-class representative action could potentially deprive absent class members of an opportunity to independently pursue their claims. The Court of Appeal disagreed with respect to the PAGA claims, finding that the PAGA expressly provided for non-class representative actions. The Court held that representative actions brought under the PAGA did not present fiduciary and constitutional challenges because each aggrieved employee and each violation per employee would have to be identified before any penalty could be assessed. Further, the Court held that any penalties recoverable would be paid not just to the representative plaintiff but to all “aggrieved employees.” Thus, the California Court of Appeal vacated the trial court’s order sustaining Angelo Dairy’s motion to strike the PAGA claims. Arias v. Superior Court (Angelo Dairy), Case No. CV028612.
So what now for California employers? Some commentators have interpreted the Arias decision as greatly expanding an employer’s exposure to liability, while others have suggested that this decision does not change the status quo. However, neither of these views may prove to be entirely correct. On one hand, those members of the plaintiffs’ bar who did not believe that the PAGA provided for non-class representative actions will now be aware of a new way to pursue civil penalties. Further, their attention will be re-focused on the PAGA and the potentially crippling civil penalties provided by this statute. On the other hand, plaintiffs pursuing non-class representative actions will still have the task of identifying all of the aggrieved class members and the scope of their injuries as well as proving all the other requirements of a particular claim. In any event, if this decision does nothing else, it should serve as another reminder to California employers of the continuing significance of wage and hour litigation and the need to strictly comply with California wage and hour laws.