How an employee characterizes his or her claim in its letter to the California’s Labor and Workforce Development Agency (“LWDA”), before he or she pursues a legal action on behalf of all similarly affected employees under the Private Attorneys General Act (“PAGA”), can foreclose such claims.
Generally, PAGA permits individual employees to bring actions on behalf of all similarly situated aggrieved employees of the employer without first satisfying the rigorous requirements necessary to obtain certification of a class action. PAGA does not require the employee to prove any injury in fact from an employer’s alleged violation of wage and hour laws. For example, errors providing legally required information on a pay stub, even if the correct amount was paid, will support a PAGA claim as there is a statutory automatic penalty per paycheck. That does not mean, however, that every claim made for defects in a paystub will necessarily qualify the case for PAGA treatment.
Hamid A. Kahn learned that lesson in the recent case of Kahn v. Dunn-Edwards Corporation (2018) decided by the Second District of the California Court of Appeals. Kahn’s required Notice letter to the LWDA only sought claim penalties for himself for a technical error by Dunn-Edwards Corporation in failing to state, as required by law, the start date for the pay period covered by Kahn’s final paycheck.
Kahn received an exhaustion of administrative remedies letter from the LWDA and then sued Dunn-Edwards, on his behalf and on behalf of all similarly situated employees, under PAGA.
Dunn-Edwards ultimately moved for, and was granted, summary judgment on the basis that Kahn’s original Notice of Claim sent to the LWDA made no mention of other employees. The Court of Appeals affirmed the decision and held the failure of Kahn to include a claim for other
aggrieved employees in the Notice precluded Kahn’s PAGA action.
It is essential that any claim an employer receives from an employee be highly scrutinized by qualified legal counsel to determine the employer’s potential liability and loss, if any, as well as to formulate a solid legal strategy to deal with the claim. Sometimes when the claimant errs procedurally, the employer may be able to use that mistake to completely foreclose the claim.
The information presented is not intended to be, and does not constitute, “legal advice.” Because each situation varies, and only brief summary information is provided here, you should not use this information as a basis for action unless you have independently verified with your own counsel that it applies to your particular situation.
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