Gregory W. Knopp

Knopp handles many of the nation's most closely watched employment disputes involving class action and Private Attorneys General Act claims for industry giants, including Starbucks Corp., Ernst & Young and Michaels. The outcomes often hold important implications for future case law in California and nationwide.

Over the last decade, as California courts have expanded the reach of PAGA, these types of claims represent a growing challenge to employers. PAGA penalties can add up to a significant amount very quickly. An initial violation carries a $100 penalty per employee per pay period, and every subsequent violation carries a $200 penalty. Employees can also recover attorney fees.

"Beyond that, there's a lot of uncertainty regarding what a plaintiff needs to do in order to proceed on behalf of a group of employees," Knopp said. "That uncertainty generally works in the plaintiff's favor, because there are no clear hurdles in the plaintiff's way as there are in the class action context."

Knopp represented Starbucks in Carrington v. Starbucks Corp., 37-2014-00018637 (San Diego Super. Ct., filed June 10, 2014).

The ruling was affirmed by the 4th District Court of Appeal in November and published the following month.

The plaintiff brought a PAGA action against Starbucks, claiming the coffee chain violated California meal break laws systematically throughout the state. It was one of the few PAGA cases to go to trial. While plaintiffs asked for an award of $68 million, the court ruled the plaintiff had shown "minimal" violations and awarded only $150,000.

The case is important, Knopp said, because it reflects a road map of how to defend against a PAGA claim when class action rules don't apply. The decision may also prove helpful to employers in terms of how a court should calculate PAGA penalties.

"The court has wide discretion to award PAGA penalties. While the potential penalties can be enormous, there are often good arguments for why they should be far less than the maximum, and that decision is very supportive of those sorts of arguments," he said.

While employment laws are often enacted with the best intentions, they can sometimes be exploited in litigation, Knopp said. As an example, he cited wage statement requirements, which he said are certainly reasonable.

"But because there are substantial penalties with getting it wrong, employers often face class or PAGA cases where plaintiffs seek penalties that could be an existential threat to a company based on a very technical violation of the law where it's debatable whether anyone was even injured," he said.

-- Jennifer Chung Klam