by Grace Lim-Ayres, Esq.
On July 13, 2017, the California Supreme Court in Williams v. Superior Court (Marshalls of CA, LLC) issued an opinion addressing the scope of discovery in representative actions brought under PAGA (Private Attorneys General Act of 2004, codified in Cal. Lab. Code § 2698 et seq.). The Labor Code Private Attorneys General Act (PAGA) authorizes aggrieved employees to file lawsuits to recover civil penalties on behalf of themselves, other employees, and the State of California for Labor Code violations.
The Williams Court unanimously reversed the trial court’s discovery order denying plaintiff access to statewide contact information for fellow employees of other Marshalls stores. It held that plaintiffs in PAGA actions have access to a broad scope of discovery similar to discoverable information in a class action. The plaintiff is entitled to statewide contact information at the onset of the case to determine which cause of action to plead, and whether a broader representative action is warranted.
In what could be considered another blow to employers in an already employee-friendly state, given the relatively low threshold for pleading, employees may now bring more PAGA claims that are in fact “fishing expeditions”, which will in turn require employers to spend more time defending against them. In addition, it is clear that statewide contact information is relevant and discoverable in a PAGA claim at the outset of the case.
What is PAGA?
PAGA (Private Attorneys General Act of 2004, codified in Cal. Lab. Code § 2698 et seq.) authorizes an employee alleging Labor Code violations to file a representative action on behalf of himself or herself, and other aggrieved employees. PAGA was enacted to remedy systemic under-enforcement of many worker protections. The Legislature adopted a schedule of significant civil penalties to deter violations of provisions that lacked non-criminal sanctions. It also gave employees the ability to sue on behalf of the state, and to collect penalties to be shared with the state and other affected employees.
In order to file a PAGA suit, an employee must first provide written notice to the employer and the responsible state agency (Labor and Workforce Development Agency) of the alleged violations of the Labor Code and include the facts and theories behind the allegations. If the agency decides not to investigate or investigates without issuing a citation, the employee may then bring a PAGA action.
Background of Williams
In Williams v. Superior Court (Marshalls of CA, LLC), the Plaintiff was an employee of Marshalls of CA, LLC at one of its retail stores in Costa Mesa. He brought a PAGA action against Marshalls, alleging wage and hour violations. The Plaintiff specifically sought contact information for fellow employees of Marshalls in approximately 130 stores throughout the state, and eventually filed a motion to compel when Marshalls refused to provide the information. The trial court granted the motion as to the Costa Mesa store where Plaintiff worked, but denied it as to every other California store and required that any renewed discovery motion was conditioned upon Plaintiff sitting for a deposition and showing some merit to the underlying action. The Court of Appeal denied the Plaintiff’s writ of relief requesting that the trial court’s discovery order be vacated.
The California Supreme Court’s Analysis
The Supreme Court unanimously decided in favor of the Plaintiff employee, holding that employees have a right to statewide contact information without requiring a heightened standard of proof. Accordingly, the ability to pursue discovery does not depend on the strength or weakness of a plaintiff’s claim. Plaintiffs in a PAGA action need only show that there are facts and theories supporting the alleged violations.
Marshalls first objection was that Plaintiff’s request for contact information for all employees across the state who did not share his position, job classification, and store location was overbroad. The Court stated that contact information was within the proper scope of discovery because it is a first step to prosecution of any representative action. PAGA does not impose a heightened preliminary proof requirement, and Plaintiff needs only to show that there are facts and theories supporting the alleged violations which are not frivolous.
In addition, as to “standing” in a PAGA action, PAGA requires only that a suit is brought by an aggrieved employee — a person who was employed by the alleged violator and against whom one or more of the alleged violations was committed. The lack of more than mere allegations implies that the Legislature did not intend to impose a heightened requirement.
Marshalls also argued that PAGA actions should not have as broad a scope of discovery as wage and hour class action suits because there are distinct procedural differences between the two actions. The Court responded that despite the differences, the reason for seeking contact information in both PAGA actions and class action suits is similar – any aggrieved fellow employee is a potential witness to violations of the Labor Code – therefore, his or her contact information is relevant and discoverable. Moreover, state policy favors access to contact information in PAGA actions just as in class actions because it is a precursor to effective enforcement of consumer and worker protection statues.
Marshalls argued that the request was unduly burdensome without Plaintiff first showing that he or other employees had been subject to Labor Code violations. It contended that Plaintiff should be required to submit proof of his case before being allowed statewide access to discovery. The Court found that Marshalls did not meet its evidentiary burden to show that this discovery request was an undue burden.
The Court responded that despite the possibility that giving broad discovery rights would allow Plaintiff to engage in a “fishing expedition”, the Legislature granted the right anyway because it regarded mutual knowledge of all the relevant facts gathered by both parties as essential to proper litigation. The Court explained that parties may request interrogatories and other discovery methods precisely to determine the scope of a representative action. The ability to pursue discovery does not depend on the strength or weakness of a plaintiff’s claim. Rather, discovery is used to determine which cause of action to plead, and whether a broader representative action is warranted. The Court held that the contact information is a legitimate starting point for further investigations by which plaintiff may determine the proper claims and defenses.
The Court also examined the question of privacy interests held by the other employees. The Court found that despite having a privacy interest in their contact information, fellow employees would have no reason to expect their contact information would be withheld from plaintiffs asserting employment law violations committed against them and to recover civil penalties on their behalf. Any privacy concerns could be protected by issuing a Belaire-West notice to employees affording them an opportunity to opt out of having their information shared by returning an enclosed postcard.
Ramifications of Williams for Employers
Williams states that Plaintiff need only show that there are facts and theories supporting the alleged violations in order to request discovery in a PAGA action. Given the relatively low threshold for pleading, employees may now bring more PAGA claims that are in fact “fishing expeditions” which will require employers to spend more time defending against them.
Second, it is clear that statewide contact information is relevant and discoverable in a PAGA claim at the outset of the case. The trial court may order the name and contact information for all potentially aggrieved employees which will increase the costs of discovery and can be used as leverage against employers to settle, even in cases that lack merit. There is also the potential of additional claims by other employees who are made aware of the original plaintiff’s action.
Furthermore, since it appears that Williams has expanded the scope of discovery in PAGA actions to be as broad as discovery in class actions, employers should expect that plaintiffs may use the Williams decision to make broad discovery requests beyond contact information.
To read the Supreme Court’s Opinion in Williams v. Superior Court (Marshalls of CA, LLC), click here.
Are you the recipient of a PAGA letter? Do you have questions about how to protect your business from a PAGA suit?
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*This article is for informational purposes only, and does not constitute legal advice or create an attorney-client relationship. This article does not make any guarantees as to the outcome of a particular matter, as each matter has its own set of circumstances and must be evaluated individually by a licensed attorney.
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