E-Blasts

Recently, the California Court of Appeals held in Huff v. Securitas Security Services USA, Inc., that an employee alleging a single violation of the California Labor Code under the Private Attorneys General Act (“PAGA”) may also bring PAGA claims against the employer for all other alleged Labor Code violations, even those suffered by other employees of the same employer. According to the decision, an employee affected by at least one Labor Code violation may pursue penalties on behalf of the State for unrelated Labor Code violations by the same employer.

In this case, plaintiff Forrest Huff was employed as a security guard for Securitas Security Services USA, Inc., (“Securitas”) for about a year. During that time, he was removed from an assignment at the request of a client, and he subsequently resigned. He then sued Securitas under PAGA, seeking penalties for several Labor Code provisions. The first phase of the trial involved determining whether employees had been paid weekly, as is required for a temporary services employee. Since the evidence established Huff was not a temporary services employee as defined by section 201.3, subdivision (b)(1), the court found that Huff could not effectively show how he personally was affected by a violation of that section, and it was further decided that Huff therefore “had no standing to pursue penalties under PAGA on behalf of others who were affected by that violation.” Judgment was entered in favor of the employer.

Huff then moved for a new trial, and the court found that it had made an error in its previous decision. This time, the court concluded that, because under PAGA an “aggrieved employee” can pursue penalties for Labor Code violations on behalf of other employees and the statute defines an aggrieved employee as someone who suffered “one or more of the alleged violations,” so long as Huff could prove he was affected by at least one Labor Code violation, he could pursue penalties on behalf of other employees for additional violations. Since his complaint alleged another violation that affected him personally, the court decided that “the failure to establish a violation of the weekly pay requirement did not preclude his entire PAGA cause of action” and found in favor of the plaintiff. Securitas appealed, but the appellate court held the decision in favor of Huff.

COUNSEL TO MANAGEMENT:

As we’ve reported before, plaintiff attorneys are increasingly asserting PAGA claims, and though recovery is limited to a one-year period – as opposed to three or four years for class action claims – it can still result in significant liability to employers, as PAGA’s civil penalties are based upon the number of violations, the number of aggrieved employees, and the total number of pay periods those aggrieved employees worked. In general, under PAGA, employers are liable for a civil penalty of one hundred dollars ($100) for each aggrieved employee per pay period for the initial violation and two hundred dollars ($200) for each aggrieved employee per pay period for each subsequent violation. Even companies that employ a small number of employees can face seven-figure exposures due to PAGA’s punitive multiplier for civil penalties, in addition to any other Labor Code violations they may face.

In a regular class action lawsuit, the named employee must, in general, suffer the same injury as the employees they seek to represent. Unfortunately, this decision opens up employers to even more liability under PAGA lawsuits, as it makes clear that plaintiffs can allege broader violations than the specific violations experienced by the named employee as a tactic to squeeze employers. Employers facing PAGA lawsuits are encouraged to reach out to the experts at The Saqui Law Group for assistance.

Built For Employers