After Epic Systems, you can almost hear the vibranium humming

Last week, the U.S. Supreme Court in 5-4 decision, authored by newly minted Justice Neil Gorsuch, ruled in Epic Systems Corporation v. Lewis that class action waivers in arbitration agreements are enforceable in employment agreements notwithstanding the National Labor Relations Act. 2018 DJDAR 4705 (May 21, 2018).

While this result seemed to be preordained since late into the night on Nov. 8, 2016, when Donald Trump shocked the world and was elected president of the United States, it still stung the bit of hope left over. "Justice" Merrick Garland likely would have reached the opposite result which would have allowed workers to pursue collective actions in court or arbitration through the National Labor Relations Act, which provides that employees can band together to engage in "concerted activity."

Alas, this is not the case. Justice Gorsuch, however, makes clear various times in his opinion that the future of class actions and arbitral waivers lies in the hands of Congress. As such, a future President Joe Biden, Kirsten Gillibrand, Kamala Harris or Bernie Sanders could sign a bill into law in 2021 changing the practice. This remains a dream nonetheless.

While the rest of the country ponders the best way to enforce employees' rights against unscrupulous employers, California already has a potent tool. The Private Attorneys General Act is California's Black Panther Suit. The Panther Habit, as it is known in the comics and this year's blockbuster movie, is a protective suit worn by the current King of Wakanda, T'Challa. The suit's "secret weapon" as explained by Shuri, T'Challa's sister and "Q" (think Bond) of the family, is that it is "completely bulletproof and it absorbs energy for redistribution." The suit stores kinetic energy from bullets that penetrate it, which can be utilized later. In essence, shooting T'Challa only makes him stronger. Likewise, California courts and litigants understand that as the federal government weaken workers' rights by eliminating the right to bring class actions, state law, including PAGA, must remain as a robust, powerful tool to punish unscrupulous employers and to deter violations of the law. In addition, the plaintiff's bar has a clarion call to double our efforts, potentially at reduced pay, to ensure that workers in California are treated fairly and are paid what is required by law.

While Epic was decided on Monday, May 21, the suit's kinetic energy was released on the following Tuesday and Wednesday by the California Court of Appeal, further strengthening California's PAGA statute.

On Tuesday, May 22, the 3rd District Court of Appeal in Raines v. Coastal Pacific Food Distributors, Inc., 2018 DJDAR 4809, did two things. First, it solidified the holding in Lopez v. Friant, 2017 DJDAR 9491 (2017), that held that one need not prove injury when brining a PAGA claim that flows from a violation of Labor Code Section 226(a) or a wage statement violation. The Raines court held that civil penalties are different than statutory ones because their intention is to deter conduct, i.e., "An act may be wrongful and subject to civil penalties even if it does not result in injury." Additionally, the court held that the penalties for violations of 226(a) are not the default penalties under PAGA, which are $100 for the first violation and $200 for each subsequent one. Rather, violations of 226(a) will be subject to the penalties under Labor Code Section 226.3, which calls for penalties of $250 for the first violation and $1,000 for additional ones.

Is that the sonic boom I hear being released from the Black Panther suit?

On Wednesday, May 23, the 6th District Court of Appeal issued its ruling in Huff v. Securitas Security Services, Inc., 2018 DJDAR 4922. In Huff, the Court of Appeal softened the standing requirements to bring a PAGA claim. While many suggested that a PAGA plaintiff had to have traditional class action standing in order to represent the state and show typicality and/or aggrieved status for each and every Labor Code provision where penalties were sought, the court said that this not the case. Instead, the court held that in order to represent the state as a private attorney general in what it describes as a "qui tam action," an aggrieved employee need only show that he or she merely suffered one of the claims alleged. The defendant argued that such a result would be absurd because this would encourage employees to look out for their fellow workers and bring claims for their benefit despite the fact that they did not suffer some of the violations personally. The court questioned the wisdom of such an argument, "Far from absurd, those consequences are precisely what the Legislature intended when it enacted PAGA as a way to encourage private parties to pursue Labor Code violations, relieving pressure on overburdened state agencies and achieving maximum compliance with labor laws."

You can almost hear the vibranium (the rare metal that energizes the Wakanda tech ) humming.

So while PAGA gets stronger, sending its shock waves out, that's only half of the puzzle. PAGA helps the state's coffers and provides a platform for plaintiff's lawyers to act as prosecutors to enforce violations of the Labor Law. The other half of the puzzle is providing compensation to employees who were wronged but have signed arbitration agreements with class action waivers. On this front, PAGA may have its limitations. Presently, there is a split in authority as to whether or not a PAGA case can merely recover penalties or if it can reach and pursue claims on behalf of the workers themselves through Labor Code Section 558. This mechanism would not only recover the penalties but also the wages that are owed. Esparza v. KS Industries, LP, 2017 DJDAR 7490 (2017), takes the view that claims for violations of 558 must proceed to arbitration. On the other side is Lawson v. ZB, N.A., 2017 DJDAR 12040 (2017), which says one can pursue the 558 claims in court notwithstanding an arbitration agreement.

In March, the California Supreme Court granted review to resolve the split.

It seems clear that the labor commissioner can proceed with claims on behalf of workers and provide them their just compensation for 558 claims. Why then can't an aggrieved employee stepping in the shoes of the state do the same? Will the US Supreme Court threaten to undo PAGA if the California Supreme Court stretches too far? Could our beautiful Wakanda be threatened by other forces in the universe? My hunch is that they will tread carefully and narrowly.

We need to acknowledge that we are at war with some corporate forces, who seek to avoid responsibility for their mistakes, at best, and malfeasance, at worst. We also have to understand and reiterate that arbitration is significantly more expensive than court. The costs are exponentially greater. If we are rebuffed in pursuing class litigation, we must seek an ethical way under the rules to seek out other likeminded workers to vindicate their rights. When hundreds, or even thousands, of arbitrations are filed against a big-shot Fortune 500 company, even the fat cats will be begging to settle as a class action. As defendants claim that they don't consider costs of defense, we need to explore ethical ways to engage in a similar strategy including sharing resources to force corporations to spend millions on arbitral fees. This can send a message to the C-Suites that they should think long and hard before they have their workforce sign arbitration agreements waiving class actions. This is especially true if their workers are being abused.

With that being said, I close with the words of T'Challa, "No more discourse. No more deliberation. No more excuses. No more mercy. We know what this is. It is war, and war is our nation's trade. It has been so for generations. We [represent worker's rights]. We will not be terrorized. We are terror itself."