In California, PAGA representative actions are filed daily alleging that employees have purportedly suffered extensive statewide violations of the Labor Code. While PAGA allows employees to bring representative actions against employers on behalf of themselves and other “aggrieved employees” for alleged violations of the Labor Code, PAGA plaintiffs are taking things one step further by filing lawsuits purely on “information and belief” that there are all sorts of Labor Code violations going on statewide.
At least one California trial court is considering the propriety of this practice in Mercado v. Atria Management Co., LLC, 2015 WL 5704376. In Mercado the Court – on its own motion – moved to strike or order a judgment on the pleadings as to plaintiff’s PAGA claims. The court noted that it “may decline to entertain the action as a representative one” where the complaint appears to fail to state a cause of action. And, even though the Plaintiff repeatedly asserted on “information and belief” that statewide Labor Code violations were occurring, he failed to plead (after being given more than one chance to do so) any facts showing that anyone other than he had suffered a purported Labor Code violation. This motion is set for hearing later this month.
Meanwhile, the California Supreme Court is scheduled to consider whether broad PAGA allegations (which were not challenged at the pleading stage) can open the floodgates to statewide discovery in the absence of any evidence of statewide violations. In Williams v. Superior Court, 187 Cal. Rptr. 3d 321 (Ct. App. 2015), the California Court of Appeal affirmed the trial court’s decision to restrict discovery in a PAGA case to Plaintiff’s one work location. The Court found that “PAGA states only that a private individual may bring a ‘civil action’ to enforce labor laws, not that the individual may… demand unlimited information upon pain of criminal conviction.” Thus, before an employee may obtain statewide discovery under PAGA, the employee must first establish that (1) she was actually subjected to violations of the Labor Code and (2) that such violations were a result of a uniform employer practice and/or policy that occurred in locations other than where the plaintiff worked.
Predictably, Williams appealed this decision and the California Supreme Court has granted review. Should the California Supreme Court put a nail in this PAGA discovery coffin, perhaps some of the issues identified by the Mercado court might also be resolved. Even though Williams is a discovery (and not a pleading) case, the trial court based its decision on the allegations in complaint before any reasonable discovery had taken place. So, to the extent the Supreme Court addresses pleadings issues, trial courts, like the one in Mercado, may have further guidance on the pleading (and discovery) standard in PAGA cases.