High court PAGA ruling will be a boon for plaintiff-employees

In a move that has taken California employers by storm, the California Supreme Court has given plaintiffs the green light to discover state-wide contact information of employees in claims brought against their employers under California's Private Attorneys General Act. Such attempts to discover information of this magnitude have generally been curtailed by employers' objections based on overbreadth, privacy and undue burden grounds.

As a general rule, trial courts have traditionally narrowed the scope of discovery in PAGA actions to the actual site where the employee bringing the PAGA claim worked when the alleged wrongdoing occurred; anything beyond this scope required the employee to establish good cause for the information sought. However, the California Supreme Court clarified in Williams v. Superior Court, 2017 DJDAR 6879 (July 13), that a trial court's decision to narrow the scope of discovery under these circumstances is an impermissible attempt on a trial court's part to "augment the limitations on discovery established by the Legislature."

PAGA

The PAGA is codified at Labor Code Section 2698 et seq., and allows employees to initiate a civil action against their employers for civil penalties for certain violations of the Labor Code. An employee bringing suit under this provision may bring a suit "on behalf of himself or herself and other current or former employees against whom one or more of the alleged violations was committed." Cal. Lab. Code Section 2699(g)(1). Because a claim under PAGA is brought on behalf of other aggrieved employees, it is a representative action that is similar to a class action. However, unlike a traditional class action, recovery is limited to civil penalties. The employee bringing the suit generally retains only 25 percent of any recovery, and the remaining 75 percent goes to the Labor Workforce Development Agency (LWDA) for the purposes of enforcement and education purposes.

Pre-Williams Discovery Under PAGA

In Williams, the plaintiff worked for Marshalls in its Costa Mesa store, and sued Marshalls under the PAGA for failing to provide him with meal and rest breaks as required under the Labor Code. Williams alleged that "on a companywide basis, Marshalls understaffed stores, required employees to work during meal periods without compensation, and directed managers to erase meal period violations from its time records." Before the Williams case, employers defending these suits were usually able to successfully narrow the geographical scope of requests for employee contact information to the place in which the employee bringing the PAGA claim worked based on privacy, overbreadth and undue burden considerations. Discovery beyond this geographical scope required a good cause showing, which necessarily required a trial court to impose a "proof of the merits requirement" on the employee.

Williams' Impact on PAGA Discovery

Breaking with the traditional manner in which California trial courts have handled PAGA discovery previously, the California Supreme Court reversed the trial and appellate court decisions that limited the discovery of employee contact information to the plaintiff's worksite. The court held that under the circumstances, state-wide discovery of this information was appropriate on the following grounds:

• PAGA does not contain an express or implied intent "to impose a heightened preliminary proof requirement" before an employee may discover state-wide employee contact information;

• A plaintiff in a PAGA action "is entitled to demand answers to its interrogatories as a matter of right," including employee contact information; the burden is not on the employee to establish good cause for the information sought, but rather on the employer to show why the information sought was objectionable; Marshalls did not carry that burden;

• Just as in a traditional class action, "the burden is on the plaintiff to establish any violation of the Labor Code, and a complaint that alleges such violations makes any employee an allegedly aggrieved percipient witness and his or her contact information relevant and discoverable [citing to Code of Civil Procedure Section 2017.010]";

• The disclosure of employee contact information implicates "lesser [privacy] interests," and does not require an employee to establish a "compelling interest or compelling need" before it may obtain it (the court expressly disapproved any California court decisions holding otherwise);

• Marshalls made no showing of the burden disclosure would impose; "Marshalls has the burden of supplying supporting evidence, but in response to Williams's motion to compel it offered none"; and

• The court underscored its position that "[t]he eventual proper scope of a putative representative action is as yet uncertain is no obstacle to discovery; a party may proceed with interrogatories and other discovery methods precisely in order to entertain that scope."

Takeaways for Employers

Employers in the position of having to defend against a PAGA claim will likely be compelled to produce state-wide employee contact information if they have multiple facilities within California, and the employee's civil complaint alleges a company-wide and systematic policy of Labor Code violations. The Court rejected Marshalls' assertion that "the pleading of a state-wide PAGA claim is insufficient to support discovery of statewide fellow employee contact information without a further showing of cause."

While the court did not foreclose the possibility of narrowing the scope of permissible discovery on the ground of undue burden, the Williams decision clarifies that the employer will have to produce evidence of same to prevail on that argument.

Finally, the court suggested that the use of a protective order prohibiting the use of employee contact information outside the case, as well as the use of a Belaire notice, should assuage any concerns an employer may have about violating its employees' privacy rights. A Belair notice would provide employees with notice of the PAGA action, clarify that they are under no obligation to speak with plaintiff's counsel, and give an employee the opportunity to opt out of having his or her contact information disclosed.