California Court of Appeal Upholds Dismissal of ‘Unmanageable’ PAGA Claim

On September 9, 2021, the Second District of the California Courts of Appeal ruled in Fred Wesson v. Staples the Office Superstore, LLC that trial courts have “inherent authority” to strike claims under the California Private Attorneys General Act (PAGA) if they will not be manageable at trial. As the first precedential decision on this issue from a California court, this case provides employers with a welcome potential defense to some PAGA claims.

Facts and Background

Under PAGA, employees in California are empowered to bring claims on behalf of other employees (and the state of California) for violations of the California Labor Code. Critically, plaintiffs need not meet class action requirements or go through class action procedures to bring claims under PAGA on behalf of other employees. As a result, unlike class actions, employers have had relatively limited recourse to challenge wide-reaching PAGA claims, sometimes brought on behalf of hundreds or thousands of employees.

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California Supreme Court: Paying Meal and Rest Period Penalty Based on Employee’s Base Hourly Rate Is Not Enough

On July 15, 2021, the California Supreme Court ruled that an employee’s “regular rate of compensation” for the purposes of meal and rest break penalties includes all nondiscretionary payments, not just hourly wages. This decision will have significant impact on all employers in California because (1) going forward, employers cannot simply pay the employee’s base hourly rate for meal and rest break violations, and (2) this decision is retroactive.

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New California Laws for 2021: What Employers Should Know

Several new laws in California impact employers in a multitude of operational areas. From leave regulations to workers’ compensation, safety enforcement, wages and more, business leaders have much to research when it comes to compliance. All employers with operations in California should be aware of these new laws, understand how these laws may affect their operations and consult with counsel to address any questions on these new obligations.

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