Hon Jay C. Gandhi (Ret.) Hon. Jay C. Gandhi (Ret.) is a JAMS mediator and arbitrator. He is known for his thorough, insightful, and fiercely impartial approach to every matter. The parties turn to Judge Gandhi to tirelessly and fairly broker deals in complex business disputes, from headline-making mass torts and class actions to the most sensitive intellectual property matters. Judge Gandhi recently brokered the $1 billion settlement between PG&E and numerous public entities in connection with the California wildfires. Before JAMS, Judge Gandhi served eight years as a United States Magistrate Judge for the Central District of California. He received multiple honors for his judicial qualities and skills and oversaw the Court's Alternative Dispute Resolution program. Judge Gandhi was also an active, hands-on trial judge, known for his commitment to justice. Before the federal bench, Judge Gandhi was a partner at Paul Hastings LLP. He spent 12 years litigating high-profile, high-dollar commercial cases and MDL/class actions in a variety of state and federal jurisdictions across the country. Prior to Paul Hastings, Judge Gandhi was a law clerk to U.S. District Judge Kenneth M. Hoyt, and graduated Order of the Coif from the USC Law School.
Transcript
Hon Jay C. Gandhi (Ret.)
Hon. Jay C. Gandhi (Ret.) is a JAMS mediator and arbitrator. He is known for his thorough, insightful, and fiercely impartial approach to every matter. The parties turn to Judge Gandhi to tirelessly and fairly broker deals in complex business disputes, from headline-making mass torts and class actions to the most sensitive intellectual property matters. Judge Gandhi recently brokered the $1 billion settlement between PG&E and numerous public entities in connection with the California wildfires. Before JAMS, Judge Gandhi served eight years as a United States Magistrate Judge for the Central District of California. He received multiple honors for his judicial qualities and skills and oversaw the Court's Alternative Dispute Resolution program. Judge Gandhi was also an active, hands-on trial judge, known for his commitment to justice. Before the federal bench, Judge Gandhi was a partner at Paul Hastings LLP. He spent 12 years litigating high-profile, high-dollar commercial cases and MDL/class actions in a variety of state and federal jurisdictions across the country. Prior to Paul Hastings, Judge Gandhi was a law clerk to U.S. District Judge Kenneth M. Hoyt, and graduated Order of the Coif from the USC Law School.
Christina Lucio
Farnaes & Lucio, APC
Christina Lucio is an attorney with Farnaes & Lucio, APC and of counsel to the law office of James Hawkins APLC. Ms. Lucio began her career working on the management side with employers. Today, her practice is primarily devoted to employee interest and working on behalf of employees. She maintains an extensive employment law practice and frequently litigates disputes including wrongful termination, harassment, discrimination, defamation, trade secrets, and wage and hour issues. She also litigates general business disputes and false advertising claims. A substantial portion of Ms. Lucio’s practice focuses on class and representative actions. She has served as lead counsel or co-counsel in numerous wage and hour class actions throughout the state of California. Her firm is based out of beautiful Encinitas.
PRACTICESLabor, Employment and Benefits | Wage and Hour |Civil Rights, Discrimination and Retaliation |Labor and Employment Class Actions
Christina "Tina" Tellado is a labor and employment attorney in Holland & Knight’s Los Angeles and Philadelphiaoffices who focuses her practice on the representation of employers in all aspects of employment and labor law, with aparticular emphasis on wage and hour, discrimination and harassment, and trade secret and non-compete issues. Ms.Tellado's practice encompasses counseling clients on workforce issues and representing them when litigation arises.
Ms. Tellado has extensive experience representing employers in nationwide class and collective actions and complexemployment litigation from receipt of the complaint through discovery, class certification and trial. Ms. Tellado regularlydefends complex wage-and-hour litigation involving overtime, minimum wage, off-the-clock, classification of exempt ornonexempt overtime status, misclassification as an independent contractor or contingent worker, and meal and restbreak claims. She is skilled at organizing voluminous data and assisting clients with eDiscovery demands, andmanaging attorney teams to collect and develop facts in cases involving thousands of employees.
Ms. Tellado regularly defends claims brought under the full range of federal and state employment statutes and statecommon laws, including Title VII, the Americans with Disability Act (ADA), Age Discrimination in Employment Act(ADEA) and Family and Medical Leave Act (FMLA) before state and federal trial and appellate courts, and the U.S.Department of Labor (DOL), U.S. Equal Employment Opportunity Commission (EEOC), National Labor RelationsBoard (NLRB) and numerous state agencies. She has successfully represented clients in all phases of litigation,including trials and arbitrations on such claims.
In addition, Ms. Tellado counsels employers on compensation plans to ensure legal compliance, and otherwisecounsels employers on wage-and-hour issues related to compensable time, wage deductions and commissions. Sheroutinely advises employers on implementing and enforcing arbitration agreements with class and collective actionwaivers. Ms. Tellado also counsels clients on workforce reductions, workplace investigations, hiring decisions andprocesses, disability accommodations and medical leaves, termination and discipline decisions, senior managementcontract negotiations, severance negotiations, drafting employee handbooks and policies, and other workforce issues.Ms. Tellado also conducts internal wage-and-hour audits to assist clients in properly classifying employees, protectingagainst off-the-clock liability, and avoiding independent contractor misclassification and joint employer liability.
Represented a national healthcare insurance company in arbitration and alleged representative action allegingvarious claims for alleged unpaid compensation and penalties under the California Labor Code and PrivateAttorneys General Act
Represented an international pharmaceutical company in multiple nationwide class and collective actions assertingthat company improperly classified its sales representatives as exempt outside sales and/or administrativeemployees in violation of the Fair Labor Standards Act (FLSA) and various state laws
Represented a national healthcare provider in series of collective and class actions in which plaintiffs soughtpayment for alleged overtime compensation due as a result of company's purported policy of automaticallydeducting 30-minute meal break each day
Represented an emergency room medical group in arbitration proceeding involving former employee alleginggender discrimination in promotion decisions and constructive discharge claims; obtained a judgment finding onbehalf of the employer on all counts
Represented a medical technology company in federal action alleging disability discrimination and failure to engagein the interactive process claims; obtained summary judgment in employer's favor on all claims and dismissal of thematter
Technology and Telecommunications Labor Matters
Represented a satellite television provider and service provider in 12 separate multiplaintiff cases filed in 10 states,all asserting minimum wage and overtime pay violations under the Fair Labor Standards Act (FLSA) and variousstate laws based on the "piece rate" compensation of satellite technicians and a joint employer theory of liability
Represented a technology company in two nationwide collective actions alleging FLSA violations and state lawclaims, including off-the-clock, overtime, minimum wage, misclassification, meal and rest break, and wagestatement claims
Represented a telecommunications provider in state class action alleging various claims under California LaborCode, involving thousands of employees
Other Industry Sector Labor Matters
Represented a manufacturer of specialized industrial equipment, consumables and related service businesses inputative statewide class action and representative action asserting that in more than 30 corporate locations,employees were subject to alleged unlawful policies resulting in alleged violations of the California Labor Code andpenalties under California's Private Attorneys General Act
Represented a retail mortgage loan company in four class and collective actions asserting that in four differentcorporate locations, company failed to pay its nonexempt retail loan officers for all hours worked; company allegedlyhad an unwritten policy that retail loan officers were not to record hours worked in excess of 40 in a week, resultingin willful violations of Fair Labor Standards Act (FLSA); defeated motions for nationwide certification and notice;cases proceeded individually, conditionally certified on state-by-state basis, until settlement on the eve of trial
Represented a national restaurant chain in multiple nationwide collective actions and individual state action allegingFLSA and state law violations; plaintiffs sought unpaid minimum wage and overtime compensation as a result of,among other things, allegedly working off-the-clock; company allegedly had an unwritten policy that employees werenot to record hours worked in excess of 40 in a week, resulting in willful violations of FLSA.
Represented a national home goods provider in state class actions alleging various claims under California LaborCode and Private Attorneys General Act, involving thousands of employees; plaintiffs sought unpaid compensationand penalties as a result of, among other things, allegedly off-the-clock work, alleged meal and rest period
violations, alleged failure to timely pay final wages, alleged failure to provide accurate wage statements andpenalties
Represented an international food manufacturer in multiple collective actions alleging FLSA violations; plaintiffssought alleged unpaid wages, including overtime, incurred for time spent donning and doffing clothing andassociated personal protective equipment, as well as waiting and/or walking time
Represented a national provider of waste hauling services in putative class and collective under the FLSA and stateanalogues; plaintiffs sought unpaid overtime compensation as a result of, among other things, allegedly workingoff-the-clock and employer's nationwide policy of deducting a 30-minute meal break each day
CredentialsEducation
Georgetown University Law Center, J.D.
Texas Woman's University, B.S.
Bar Admissions/Licenses
California
New Jersey
New York
Pennsylvania
Court Admissions
U.S. District Court for the Eastern District of New York
U.S. District Court for the Southern District of New York
U.S. District Court for the District of New Jersey
U.S. District Court for the Eastern District of Pennsylvania
U.S. District Court for the Middle District of Pennsylvania
U.S. District Court for the Western District of Pennsylvania
U.S. District Court for the Central District of California
U.S. District Court for the Eastern District of California
U.S. District Court for the Northern District of California
U.S. District Court for the Northern District of Florida
U.S. Court of Appeals for the Third Circuit
U.S. Court of Appeals for the Ninth Circuit
Publications
New California Labor and Employment Laws for 2020, Holland & Knight Alert, December 31, 2019
'Chevalier' and the Pa. Supreme Court’s Rejection of the Fluctuating Workweek, The Legal Intelligencer, December26, 2019
Contacting Class Action Members Without Running Afoul of the Law, The National Law Journal, November 4, 2019
Arbitration Options For Calif. Employers After A Case Begins, Law360, August 27, 2019
Ninth Circuit: Dynamex "ABC" Test Unquestionably Applies Retroactively, Holland & Knight Alert, May 3, 2019
Supreme Court Reiterates That Class Arbitration Cannot Be Compelled Absent Explicit Consent, Holland & KnightAlert, April 25, 2019
DOL Issues Long-Awaited Proposed Guidance on Application of "Regular Rate" of Pay, Holland & Knight Alert, April1, 2019
DOL Announces Proposed Rule Increasing Salary Requirements for FLSA Exemptions, Holland & Knight Alert,March 8, 2019
Analysis of the Fluctuating Workweek: A Complex Alternative to Overtime Compensation, Bloomberg Law, February19, 2019
Employers Bring PAGA Lawsuit, Daily Journal, January 8, 2019
New California Labor and Employment Laws for 2019, Holland & Knight Alert, December 31, 2018
Evaluating Obesity As An Impairment At Wash. High Court, Law360, November 7, 2018
Guidance on 'Regular Rate' May Be Forthcoming, Labor & Employment Supplement, Daily Journal, July 18, 2018
Employment Class Waivers: Which Came First, FAA Or NLRA?, Law360, April 26, 2017
Speaking Engagements
Understanding Your Ethical Responsibilities in Wage & Hour Cases, Panelist, Practising Law Institute, Wage & HourLitigation and Compliance 2020 Conference, January 28, 2020
Employment Challenges with the Gig Economy, National Employment Law Council Annual Conference, April 18-20,2018
Sexual Harassment and Entertainment: How Attorneys Can Help Navigate a Way Forward for Survivors and theIndustry, Practising Law Institute Seminar, March 9, 2018
The DOL's Proposed Regulations on Exemptions, Recent Statements Regarding Independent Contractors andRecent Litigation Regarding Home Care Workers, National Employment Law Council Annual Conference, April20-22, 2016
The Private Attorneys General Act: Avoiding the Quicksand
Speakers: Hon. Jay C. Gandhi (Ret.), JAMS, Los Angeles, CAChristina M. Lucio, Farnaes & Lucio, APC, Encinitas, CA Christina T. Tellado, Holland & Knight LLP, Los Angeles, CA
Intake to Pleadings in PAGA Cases
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Private Attorneys General Act of 2004 (Labor Code § 2698 et seq.)
• Labor Code § 2699 (a) of PAGA permits aggrieved employees to recover civil penalties that previously could be collected only by the Labor and Workforce Development Agency (LWDA).
• For violations for which no established civil penalty existed, the statute created a default penalty and a private right of action for aggrieved employees.
• 75% to the LWDA, 25% to aggrieved employees.– Moorer v. Noble L.A. Events, Inc., 32 Cal. App. 5th 736 (2019).
• No recovery of underpaid wages.
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ZB, N.A. v. Superior Court (Lawson) and Labor Code § 558
• Labor Code § 558:– (a)(1)-(2): Provides for the recovery of a civil penalty of $50
for the first violation and $100 for subsequent violations, and – (a)(3): “Wages recovered pursuant to this section shall be paid
to the affected employee.”
• ZB, N.A. v. Superior Court (Lawson), 8 Cal. 5th 175, 197 (2019):
– “Iskanian established an important principle: employers cannot compel employees to waive their right to enforce the state's interests when the PAGA has empowered employees to do so… The Legislature used the PAGA to delegate enforcement of civil penalties. In contrast, we now hold that the “amount sufficient to recover underpaid wages” authorized in section 558, subdivision (a) constitutes compensatory relief—a type of recovery separate from its civil penalties.”
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ZB, N.A. v. Superior Court (Lawson) – The Takeaway
• No private right of action under Labor Code § 558.
• PAGA claim does not include underpaid wages under Labor Code § 558.
• There is a one-year statute of limitations for PAGA civil penalties under Labor Code § 558.
• Iskanian remains good law.
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Client Intake “Essentials”
• Who is the defendant? Joint employer?
• Arbitration agreement?
• Handling of individual claims? Wage and hour? Wrongful termination?
• Violation of the Labor Code giving rise to penalties?
• Is the individual an aggrieved employee? – Standing– Settlement
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Violations
• Identify conduct giving rise to penalties. – Violation of the Labor Code? – Violation of Wage Orders?
• Thurman v. Bayshore Transit Mgmt., Inc., 203 Cal. App. 4th 1112, 1132 (2012): “PAGA does not create any private right of action to directly enforce a wage order.” Must have statutory predicate.
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Is Individual an Aggrieved Employee?• Standing• Suffered violation
– Labor Code § 2699(c) defines as “any person who was employed by the alleged violator and against whom one or more of the alleged violations was committed.”
– Huff v. Securitas Sec. Servs. USA, Inc., 23 Cal. App. 5th 745 (2018): PAGA action may only be brought on behalf of aggrieved employee. An employee aggrieved as to one violation may pursue penalties for all that are pleaded even if the employee did not personally experience the other violations.
• Settlements– PAGA Search– Individual Settlement
• Kim v. Reins Internat. Cal., Inc., 18 Cal. App. 5th 1052 (2017): no standing to bring PAGA claim for employee that settled individual claims because no longer aggrieved employee. (Cal. Supreme Court review)
– Prior representative settlement which released claims for PAGA penalties
• Notice
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Notice to the LWDA in PAGA Cases
• Notice to the Labor & Workforce Development Agency (LWDA): set forth the specific provisions of the Labor Code alleged to have been violated, including the facts and theories to support the alleged violation (Labor Code §2699.3)
– Online Filing with LWDA– Certified Mail to Employer
• Employee may file action: – LWDA notifies of intent not to investigate within 60 days, or does not
respond within 65 days; or – Agency investigates and within 120 days from notice of intent to
investigate (up to 65 days), agency does not issue a citation
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Notice “Essentials”
• Pre-filing requirements strictly construed
• Williams v. Superior Court, 3 Cal. 5th 531, 545-47 (2017): Purpose of notice is to give the LWDA opportunity to decide whether to allocate resources to investigate. Notice must include specific provisions of the Labor Code alleged to have been violated, including the facts and theories to support the alleged violation.
• Must specify the aggrieved group that the aggrieved employee seeks to represent.
– Esparza v. Safeway, 36 Cal. App. 5th 42 (2019): An untimely PAGA claim may relate back to an earlier complaint only if the complaint was preceded by timely notice to the LWDA.
– Brown v. Ralphs Grocery Co., 28 Cal. App. 5th 824 (2018): Later-added PAGA claims for violations of provisions not disclosed in prior notice were time barred.
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Forum Considerations
• Employee's predispute agreement waiving the right to bring representative claims under PAGA is unenforceable. ZB, N.A. v. Superior Court, 8 Cal. 5th 175 (2019).
• State Court v. Federal Court– No need to certify class in state court. Arias v. Superior Court, 46
Cal. 4th 969 (2009).– Open question regarding certification in federal court. – Manageability issues.
• Removal to Federal Court
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Amount in Controversy: Penalties
• Baumann v. Chase, 747 F.3d 1117 (9th Cir. 2014): PAGA actions not removable under CAFA.
• Penalties considered to determine amount in controversy– Urbino v. Orkin Servs. of Cal., 726 F.3d 1118 (9th Cir. 2013): PAGA
penalties cannot be aggregated among members of the aggrieved group to satisfy diversity.
– Portion of 25% payable to plaintiff as aggrieved employee: Van Steenhuyse v. UBS Fin. Servs. 317 F. Supp. 3d 1062 (N.D. Cal. 2018); Prestwood v. Marriott Ownership Resorts, Inc., 2019 U.S. Dist. LEXIS 102842 (C.D. Cal. June 18, 2019); Proctor v. Helena Agri-Enters., LLC, Case No.: 18-CV-2834 JLS (NLS) (S.D. Cal. Apr. 30, 2019); Hernandez v. Dunbar Armored, Inc., Case No.: 18-CV-1046 JLS (LL) (S.D. Cal. Mar. 25, 2019).
– But see, Patel v. Nike Retail Servs., Inc., 58 F. Supp. 3d 1032, 1047-48 (N.D. Cal. 2014); Mitchell v. Grubhub Inc., No. CV 15-05465-BRO(ASx), 2015 U.S. Dist. LEXIS 114861 (C.D. Cal. Aug. 28, 2015).
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Amount in Controversy: Attorneys’ Fees
• Are attorneys’ fees part of amount in controversy?– Attorneys’ fees are included, but defendant retains burden of proving
the amount of future attorneys’ fees by a preponderance of the evidence.
• Fritsch v. Swift Transportation Co. of Arizona, 899 F.3d 785 (9th Cir. 2018).
– Plaintiff's pro-rata share of the total lodestar is included as part of the amount in controversy calculation.
• Van Steenhuyse v. UBS Fin. Servs. 317 F. Supp. 3d 1062 (N.D.Cal. 2018).
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Mediating PAGA Cases
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Mediation Considerations
• Preparing a case for mediation
• Effective negotiation
• Using the mediator
• Getting beyond impasse
• Creative settlement terms
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PAGA Mediation & Settlement
• Rise in activity
• Prior settlements as a “market price”
• Flexibility in allocation
• Scope of release
• Court approval
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Recent Key Settlement Cases
• Delgado v. MarketSource, Inc., 2019 WL 4059850 (N.D. Cal. Aug. 28, 2019).
• In re Walgreen Wage & Hour Litig., 747 Fed. Appx. 619 (9th Cir. 2019).
• Zakaryan v. Men’s Wearhouse, 33 Cal. App. 5th 659 (2019), disapproved on other grounds by ZB, N.A. v. Superior Court(scope of settlement)
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Case Management in PAGA Cases
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PAGA - Manageability Issues
• Courts’ ability to control their dockets is central to efficiently managing PAGA litigation.
– California state courts “have inherent equity, supervisory and administrative powers as well as inherent power to control litigation before them.” Cottle v. Sup. Ct. (Oxnard Shores Co.), 3 Cal. App. 4th 1367 (1992), citing Baugess v. Paine, 22 Cal. 3d 626, 635 (1978).
– Courts can fashion “new forms of procedures when required to deal with the rights of the parties and to manage the caseload of the court. See Cottle, 3 Cal. App. 4th at 1377.
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PAGA - Manageability Issues
• Duran v. U.S. Bank Nat. Assn., 59 Cal. 4th 1 (2014): California Supreme Court cautioned trial courts to consider whether individualized issues can be managed fairly and efficiently in class context.
• Arias v. Superior Court (Angelo Dairy), 46 Cal. 4th 969 (2009): a plaintiff seeking civil penalties for alleged Labor Code violations in a representative capacity under the PAGA does not have to meet class requirements.
• Labor Code section 2698: PAGA statute contains no language concerning manageability.Defense counsel – Contend PAGA claims subject to manageability
considerations/challengesPlaintiff’s counsel – Contend there is no manageability requirement
for PAGA claims
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Federal Courts & Manageability Considerations in PAGA Cases
• Federal Courts split on issue –Manageability Requirement
Ortiz v. CVS Caremark Corp., 2014 WL 1117614, at *3-5 (N.D. Cal. Mar. 19, 2014) (denying PAGA representative status based on unmanageability for business expense reimbursement for car mileage due to required individual inquiries)
Litty v. Merrrill Lynch & Co., 2014 U.S. Dist. LEXIS 160448, at *6 (C.D. Cal. Nov. 10, 2014) (“This Court has already determined that Plaintiff’s state law claims cannot be adjudicated on a class basis and concluded that ‘individual issues predominate.’ [Citation.] The circumstances of this case make the PAGA claim unmanageable because a multitude of individualized assessments would be necessary.”)
Brown v. American Airlines, Inc., 2015 WL 6735217 (C.D. Cal. Oct. 5, 2015) (dismissing PAGA claims for overtime violations based on the presence of numerous individualized issues that render the case unmanageable)
No Manageability Requirement Zackaria v. Wal-Mart Stores, Inc., 142 F.Supp.3d 949, 958 (C.D. Cal. 2015)
(“[T]he court finds defendant’s manageability argument inconsistent with PAGA’s purpose and statutory scheme.”)
Tseng v. Nordstrom, Inc., 2016 WL 7403288, at *5 (C.D. Cal. Dec. 19, 2016) (declining to impose a manageability requirement on PAGA claims in light of PAGA’s purpose as a law enforcement action to benefit the public)
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State Courts & Manageability Considerations in PAGA Cases
• State Courts split on issue –No Manageability Requirement– Rusom v. Tissue Banks I, 2017 WL 1047145, at *2 (Cal. Sup. Ct.
Contra Costa Cty., Feb. 16, 2017) (“There is no law in California that PAGA claims have to be manageable.”)
– Pickett v. 99 Cents, 2017 WL 3837815, at *3 (Cal. Sup. Ct. Los Angeles, May 26, 2017) (denying motion to strike PAGA claim as unmanageable, finding that a phased trial could address any management concerns)
Manageability Requirement– Khan v. Dunn-Edwards Corp., 2016 WL 1243588, at *1 (Cal. Sup. Ct.
Los Angeles, Jan. 29, 2016) (court imposed a manageability requirement on PAGA claim)
– Koplian v. Anthem Blue Cross Life and Health Insurance Co., BC679300 (Cal. Sup. Ct. Los Angeles Cnty., Nov. 13, 2018) (court granted motion to sequence discovery limiting discovery and first trial to individual only)
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Practice Pointers
• Utilize early motion practice to raise manageability issues with the court -
Pleadings
Discovery
• Court’s adoption of early case management procedures in PAGA cases
Parties provide insight on claims, burdens of proof, and scope of discovery necessary.
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Practice Pointers (Continued)
• Defense approachEmphasize difficulty in establishing liability across groupEmphasize need for individualized liability determinations or
mini-trialsConsider pre-trial motion practice to strike representative
claims• Plaintiff approach
Precisely define groupPrecisely state how case can be tried and structuredExplain how variations can be addressed or are irrelevant to
adjudicating PAGA claim
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PAGA Discovery
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PAGA – Broad Discovery
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• No need to satisfy class-action requirements but entitled to broad discovery including the lead plaintiff’s entitlement to discover contact information for other allegedly aggrieved employees.
– Williams v. Sup. Ct. (Marshalls of CA, LLC), 3 Cal. 5th 531, 547-48 (2017) (holding that a plaintiff’s right to discover contact information of other “aggrieved employees” in a PAGA action is the same as a putative class plaintiff’s right to discover contact information of putative class members)
Canela v. Costco Wholesale Corp. – Ninth Circuit considering whether PAGA claims must satisfy Rule 23 class action pleading requirements.
Argument heard January 6, 2020.
Discovery in PAGA Cases
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• Gordon v. Aerotek, Inc., 2017 WL 4351744, at *4 (C.D. Cal., Sept. 29, 2017) (finding PAGA discovery to be premature where the pleadings were not yet settled with regard to the scope of the PAGA claims)
• Hernandez v. Sun Valley Group Inc., 2018 WL 7916721, at *2 (Cal. Super. Ventura Cnty., Oct. 4, 2018) (granting plaintiff’s motion to compel PAGA-related discovery conditioned on the use of the Belaire-West notice and opt-out procedure, rejecting relevance/overbreadth/privacy objections).
• Nunez v. Nevell Group, Inc., 2017 WL 11479174, at *2 (Cal. Super. Orange Cnty., Oct. 20, 2017) (ordering defendant to meet and confer with plaintiff on a Belaire-West notice and opt-out procedure as to contact information, finding that the Williamsdecision “makes clear that the requirement to provide contact information for potentially aggrieved employees in a PAGA case is, if anything, equal to or more compelling than in a class action.”)
PAGA Trials
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PAGA Trials
• PAGA Trials = Wild West
• There is a Clear Need to Manage PAGA Trials
Driscoll v. Granite Rock Co., 2011 WL 10366147 (Cal. Super. Ct. Sept. 20, 2011): PAGA bench trial lasting 14 days with 55 witnesses and 285 exhibits, including expert statistical evidence to prove violations as to each “aggrieved” employee.
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Right to a Jury Trial?
• Equity v. compensatory damages• Courts held PAGA Claim subject to bench trial
– Thomas v. CVS Health Corp., 2019 WL 3526344, at *3 (C.D. Cal. 2019) (“[Employee]” has a right to a jury trial on her individual claims, which is not true of the PAGA claims….”)
– Espinoza v. Bodycote Thermal Processing, Inc. (Super. Ct. Los Angeles County, 2017, No. BC501617) (finding no right to jury trial on PAGA claim because PAGA claim is an equitable, rather than legal, claim)
– Banta v. AMR (Super. Ct. Los Angeles County, 2016, No. BC393113)
– O'Connor v. Uber Techs., Inc., 2015 WL 8587589, at *3 (N.D. Cal. 2015) (no right to a jury trial on PAGA claim because “the statute is focused on the civil penalties that may be awarded by a court.”)
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Bifurcation
PAGA trial structure
Where there are class and PAGA claims, which claim(s) go forward first?
If PAGA claim only, consider bellwether trial phase:
Bellwether by individual
Bellwether by location
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Hybrid MattersState court
Evidence Code section 320: “Except as otherwise provided by law, the court in its discretion shall regulate the order of proof.”
Hoopes v. Dolan, 168 Cal. App. 4th 146 (2008): court may decide the equitable issues first and the decision may result in factual and legal findings that dispose of the legal claims. Support that the adjudication of PAGA claim precedes individual or class
Labor Code violations
Federal courtBeacon Theatres, Inc. v. Westover, 359 U.S. 500 (1958): The Court
will try legal issues before the equitable issues in mixed action cases.
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Bifurcation Cases• Owens, Jr. v. O'Reilly Automotive Stores, Inc., 2017 WL 3251631, at
*1 (Cal. Super. Los Angeles Cnty., June 19, 2017) (managing trial by bifurcating individual wage and hour claims from PAGA claims)
• Pickett v. 99 Cents Only Stores, 2017 WL 3837815, at *2 (Cal. Super. Los Angeles Cnty., May 26, 2017) (granting defendant’s motion to phase PAGA trial such that the first phase would be limited to the locations where the plaintiffs worked and, following that trial, the court would determine whether to hold any broader trial involving employees working at other locations, with the trial court finding that “phasing of the trial in this manner will be in furtherance of convenience, and be conducive to expedition and economy.”)
• Saillant v. Gibson Dunn & Crutcher Inc., 2017 WL 4434800, at *1 (Cal. Super. Los Angeles Cnty., Mar. 20, 2017) (trial court proposing to bifurcate a PAGA case such that the PAGA claims would be tried to a different jury after the completion of a successful trial on behalf of the plaintiffs)
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Bench Trial Strategy
• Issues complex or technical?
Consider Experts
Statistical Information
• Who is the Assigned Judge?
• Claims
PAGA only vs. PAGA + Labor Code claims
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PAGA Trial - Due Process• Defined Scope of Trial
– Plaintiff may be required to specifically define scope including all locations where violations occurred.
• Tseng v. Nordstrom, 2016 WL 7403288 (C.D. Cal. Dec. 19, 2016) – Defendants will emphasize differences between locations preventing
representative trial.• Representative Proof
– Bell v. Farmers Ins. Exch., 115 Cal. App. 4th 715 (2004) (approving survey or statistical sampling methods for proving liability and damages)
– Duran v. U.S. Bank Nat’l Ass’n, 59 Cal. 4th 1 (2014) (providing guidance on reliability of statistical methods of proof for liability and damages)
– Tyson Foods v. Bouaphakeo, 136 S. Ct. 1036 (2016) (approving representative proof of time spent donning and doffing for FLSA overtime pay claims)
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PAGA Penalty Awards
• Amaral v. Cintas Corp., 163 Cal. App. 4th 1157, 1213 (2008): PAGA civil penalties are “mandatory, not discretionary” and cannot be denied outright where the plaintiff has demonstrated that the employer was otherwise liable.
• PAGA trials may result in modest amounts when viewed against the plaintiff’s requested penalties due to Labor Code section 2699(e)(2).
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Imposed Penalties
• Labor Code section 2699(e)(2) – courts have discretion to reduce PAGA civil penalties if award of full amount would be “unjust, arbitrary and oppressive, or confiscatory.”
• Factors considered by courts to reduce amount of penalties:– Egregiousness of the violation(s),
– The employer’s efforts at compliance,
– The employer’s ability to pay.
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PAGA Penalties Strategy
• Trial evidence on penalties:
Evidence of number of violations
Evidence of number in aggrieved group
Evidence of factors affecting court’s discretion under Labor Code section 2699(e)(2)
Consider use of party stipulations to streamline trial determinations
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Penalty Reduction CasesCarrington v. Starbucks Corp., 30 Cal. App. 5th 504 (2018): The Court of Appeal affirmed the trial court’s reduced award of a $150,000 penalty under PAGA where the plaintiff requested penalties in excess of $70 million based on a $25 to $75 penalty per violation. The trial court instead awarded $5 per penalty finding reduction was warranted because imposing the maximum penalty would be unjust, arbitrary, and oppressive based on Starbucks’s “good faith attempts” to comply with meal period obligations and the violations were minimal.
In re Taco Bell Wage and Hour Actions, 2016 U.S. Dist. LEXIS 48555 (E.D. Cal. April 8, 2016): court awarded no PAGA penalties notwithstanding jury verdict in favor of plaintiff on liability for meal break premiums because plaintiffs had not proven the precise number of violations with certainty.
Thurman v. Bayshore Transit Mgmt., Inc., 203 Cal.App.4th 1112, 1136 (2012): affirming the trial court’s reduction of PAGA civil penalties by 30%, finding awarding the full penalties would have been unjust because “the evidence showed…defendants took their obligations…seriously and attempted to comply with the law,” and that the defendant’s financial condition “rendered them unable to pay penalties from ongoing revenues.”
Fleming v. Covidien, 2011 WL 7563047, at *4 (C.D. Cal. Aug. 12, 2011): the court reduced PAGA civil penalties for wage statement violations from $2.8 million to $500,000 because “the aggrieved employees suffered no injury” as a result of the violations, the defendants were not aware their wage statements violated the law, and the defendants “took prompt steps to correct all violations once notified.”
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Other Notable PAGA Penalty Case
• Magadia v. Wal-Mart Assocs. Inc., 384 F. Supp. 3d 1058 (N.D. Cal. 2019):
After a bench trial, US District Judge Lucy Koh awarded the plaintiffs $48 million in statutory penalties under the California Labor Code and $54 million in civil penalties under PAGA, primarily due to perceived deficiencies in the wage statements. At issue were competing interpretations of Labor Code Section 226(a).
The $102 million judgment against Wal-Mart is on appeal. Magadia v. Wal-Mart Assocs. Inc., No. 19-16184 (9th Cir.).
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Recent PAGA TrialsSolely PAGA Claim
– Lawson v. Grubhub, Inc., 2018 WL 6190316 (N.D. Cal. 2018)– Carrington v. Starbucks, 30 Cal.App.5th 504 (2018)– Atempa v. Pedrazzani, 27 Cal.App.5th 809 (2018)– Huff v. Securitas Security Services, USA, Inc., 23 Cal.App.5th 745
(2018)
Included PAGA Claim– Bernstein v. Virgin American, No. 3:15-cv-02277-JST (N.D. Cal.
Feb. 4, 2019) (PAGA penalties $24.9 million)– Sanchez v. McDonald’s Restaurants of California, No. BC499888
(Cal. Sup. Ct., Los Angeles) (PAGA penalties sought $41 million reduced to $770,000)
– Kaanaana v. Barrett Business Svcs., 29 Cal.App.5th 778 (2018)– Robinson v. Open Top Sightseeing, 2018 WL 895572 (N.D. Cal.
