The Magic Carpet Ride Comes to an End: PAGA Claims Can No Longer Be Stricken on Manageability Grounds
On January 18th, the California Supreme Court in Estrada v. Royalty Carpet Mills, Inc. ruled that defendants sued under the Private Attorney General Act (PAGA) may no longer strike unmanageable claims. PAGA claims are brought by a single plaintiff who acts as a representative of their fellow employees to recover penalties for violations of the labor code. Because these actions usually involve a large number of employees employers have argued that litigating some claims as to all the affected employees is not manageable and violates their due process rights. Prior to this decision, there was a split of authority among the appellate courts as to whether manageability was a viable means to strike PAGA claims. As is often the case, the California Supreme Court resolved this question in favor of employees.
However, all is not lost. Employers still can, and should, push for trial courts to use the case management tools the Supreme Court affirmed they can use to efficiently manage trials of PAGA claims. Those tools include:
- Limiting Plaintiff’s witnesses;
- Limiting Plaintiff’s other forms evidence;
- Managing discovery, including its scope; and
- Managing the use of Representative testimony, Surveys, and Statistical analysis.
Under this proposed framework, PAGA claims can and should be limited in scope via demurrer, motion for summary judgment, and/or narrowing down the plaintiff’s definition of “aggrieved employees.” While these may not be as efficient as simply striking the overbroad PAGA claims, they still leave some flexibility in limiting the scope of these often unwieldy claims.
Stradling Has Resources To Help You Stay Compliant
We encourage you to reach out to your Stradling attorney if you have any questions, or need assistance with your businesses’ compliance with the ever changing California employment laws.
