Litigating California Wage & Hour and Labor Code Class Actions

against an employer on behalf of employees who do not expressly consent to the LWDA’s
efforts. If an employee can establish a violation affects a group of aggrieved employees,
then he may prove his case, recover the penalties, and the result of the case will be res
judicata (i.e., precluding litigation of the claim) as to the Labor Commissioner and the
“aggrieved employees” on whose behalf the action was brought. 255 The Court also stated
that while PAGA actions need not be brought as class actions, they can be. 256
The Arias decision raised many questions. For example, if a plaintiff were to pursue a meal
period class action as well as a derivative PAGA action for penalties, and a court denied
certification of the case on the ground that individualized issues predominate as to whether
different employees experienced meal period violations, could the case proceed
nonetheless on a collective basis? Presumably, this would require that the plaintiff
individually prove each employee’s claim to meal period violations, but if that could be done
in a manageable manner, the court likely would have certified a class. If it required each
aggrieved employee individually to prove a violation, would each of possibly hundreds of
such employees be required to appear and testify? And if they failed to do so, would that
provide a basis for the court to rule against them on the merits?
The most sensible reading of Arias was not that it endorsed the notion that every action for
Labor Code civil penalties could proceed collectively without class certification, but rather
that it was not always necessary to use class action procedures. In cases where the
violation can be proven through records or some other collective mechanism (e.g., a
minimum wage violation that could be proven by reference to payroll records), an employee
could prove it on behalf of a group of aggrieved employees without the need to obtain class
certification. Of course, if it were that simple, a plaintiff presumably could obtain class
certification, and likely would want to do so. It remains to be seen if appellate courts
interpret Arias more broadly and if it will lead to a wave of PAGA-only non-class group
actions. Thus far, this wave has not materialized.
D. Release of PAGA Claims Through Class Settlement
Plaintiffs’ lawyers generally try to avoid characterizing any money from a settlement as
being attributed to PAGA claims, 257 as three-quarters of any such money must be paid to
the state. 258 Indeed, it is fairly common for plaintiffs’ counsel not to assert PAGA claims at
255
256
257
258
Id. at 985-86.
Id. at 981 n.5 (“Actions under the Labor Code Private Attorneys General Act of 2004 may be brought as class actions.”).
See Nordstrom Com’n Cases, 186 Cal. App. 4th 576, 589 (2010) (affirming trial court’s approval of a class wide
settlement that apportioned zero dollars to PAGA claims).
It is unclear in a class settlement whether the attorney may recover a percentage of the gross on a common fund basis
or whether the state is entitled to three-quarters of the gross sum, with the lawyer being limited to recovering a separate
sum on a lodestar basis (reasonable number of hours times a reasonable hourly rate).
Seyfarth Shaw LLP | www.seyfarth.com Litigating California Wage & Hour Class Actions (12th Edition) 60