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California Supreme Court Expands Discovery Rights in PAGA Cases
So, let’s say an employee works at a single retail store. He decides to sue under the Private Attorneys General Act for a low-dollar alleged wage-hour violation. A company might fight such a claim because the risk of doing so is limited.
But then the employee asks for the name and contact information and job history of every one of the other employees who might have been subjected to the same alleged wage-hour violation. There’s no class certified. This is PAGA. Does the employee know that other employees were treated the same as him? No. He never worked in the other stores.
So, releasing all that information to the plaintiff’s counsel seems burdensome. It appears to violate thousands of employees’ right to privacy. And if the plaintiffs’ counsel doesn’t know of a violation affecting others, it looks like a situation where you do discovery to find claims after you file the lawsuit. To paraphrase from Soviet history, “Show me the names of the employees, I’ll find the liability.”
That’s how the California Supreme Court ruled in Williams v. Superior Court. Here are the facts as described by the Court:
Williams worked for Marshalls at its Costa Mesa store beginning in January 2012. In 2013, Williams sued Marshalls under PAGA. The operative complaint alleges Marshalls failed to provide Williams and other aggrieved employees meal and rest periods or compensation in lieu of the required breaks. (Lab. Code, §§ 226.7, 512, subd. (a).) According to the complaint, on a companywide basis, Marshalls understaffed stores, required employees to work during meal periods without compensation, and directed managers to erase meal period violations from its time records. Marshalls also adopted a ―systematic, companywide policy‖ to pay no premiums for missed breaks. Relatedly, Marshalls failed to provide Williams and other aggrieved employees timely wage payment or complete and accurate wage statements. (Lab. Code, §§ 204, 226, subd. (a).) Finally, Marshalls adopted a policy and practice of requiring Williams and other aggrieved employees to carry out company business, such as bank runs and travel for training sessions, without reimbursement. (Lab. Code, §§ 2800, 2802.)
As part of discovery, Williams sought the contact information and job history for all 16,500 non-exempt employees at all Marshalls stores. After Marshalls said, er, “no,” Williams filed a motion to compel. The trial court held that Marshalls would have to turn over the information for Williams’ store, and that Williams would have to explain at a deposition how the claims agains the other stores had any merit before the Court would allow discovery of the employees in those stores. The Court of Appeal agreed with the trial court. The Court of Appeal ruled that Williams had to show good cause – some kind of merit to his claims – to overcome employees’ right to privacy and to fall within what is permissible discovery.
But the Supreme Court decided Williams was correct. The Court first explained that the right to discovery is broad. Parties seeking discovery via interrogatory presumptively are entitled to the information, with the burden on the resisting party to show the seeking party has overstepped.
Marshalls made three objections to the interrogatory:
Marshalls contends Williams‘s request for statewide employee contact information ―is overbroad in that it seeks information beyond the scope of permissible discovery in that it extends to individuals outside of the position, job classification, and location, in which Plaintiff worked.‖ Second, Marshalls argues the interrogatory ―is unduly burdensome, in that Plaintiff is requesting private information about thousands of third parties, without making a prima facie showing that he is an aggrieved employee or that any aggrieved employees exist outside of the store where he worked.‖ Third, Marshalls objects to the request ―to the extent it seeks private information that is protected from disclosure by Article I section 1 of the California Constitution without consent.
Regarding overbreadth, the Supreme Court was unconvinced.
Williams‘s interrogatory sought information within, not exceeding, the legitimate scope of discovery. The trial court had no discretion to disregard the allegations of the complaint making this case a statewide representative action from its inception. The Court of Appeal likewise misread the complaint when it described Williams‘s claim as ―parochial‖ and thus affording no basis for statewide contact information. Nothing in the nature of PAGA renders the interrogatory overbroad or justifies the trial court‘s order.
The Court did not care at all that its ruling means plaintiffs will “sue first and ask questions later.” In fact, the ruling suggests that doing so is entirely appropriate.
All stand to gain from proving as convincingly as possible as many Labor Code violations as the evidence will sustain, thereby maximizing the recovery for aggrieved employees as well as any potential attorney fee award. (See Lab. Code, § 2699, subds. (g)(1), (i).) Legally, a trial court may issue a protective order conditioning discovery ―on terms and conditions that are just‖ such as requiring confidentiality and prohibiting use outside a given case. (Code Civ. Proc., § 2030.090, subd. (c); see id., subd. (b).)
California law has long made clear that to require a party to supply proof of any claims or defenses as a condition of discovery in support of those claims or defenses is to place the cart before the horse. The Legislature was aware that establishing a broad right to discovery might permit parties lacking any valid cause of action to engage in ―fishing expedition[s],‖ to a defendant‘s inevitable annoyance. (Greyhound Corp. v. Superior Court, supra, 56 Cal.2d at p. 385.) It granted such a right anyway, comfortable in the conclusion that ―[m]utual knowledge of all the relevant facts gathered by both parties is essential to proper litigation. (Id. at p. 386.)
The Court also considered Marshalls’ argument that turning over contact information for 16,000 employees posed an undue burden, given Williams made no showing that he or any of the other 16,000 employees had experienced a wage-hour violation.
Marshalls made no showing of the burden disclosure would impose, and the statutory scheme imposes no good cause requirement for seeking information by interrogatory. Accordingly, on the record here, claims of undue burden do not support the trial court‘s refusal to permit Williams discovery of statewide employee contact information until he supplies Marshalls with discovery and establishes both some merit to his personal claim and reason to be certain others had similar claims.
With all due respect to the Court, the Court doesn’t care about the cost of discovery, or whether a plaintiff has a good faith basis for seeking it. It’s totally fine to file a complaint and then figure out if the “allegations” have merit. I don’t know if Marshalls mentioned that there are laws (like CCP 128.7) and ethical rules requiring a basis for making claims on behalf of 16000 people. If they didn’t they should have.
Finally, the Court addressed the privacy objection.
The Court reaffirmed that employees have a privacy right in their contact information held by their employer. But then the Court “assumed” that employees would want their information turned over to a plaintiff’s attorney trying to find labor law violations. Never mind that none of these employees signed up for a lawsuit, or that any of the PAGA penalties would be awarded to these other employees. Plus, the Court is simply “assuming” what employees want, which is not a strong basis for making such a broad pronouncement.
The Court then analyzed the right to privacy under traditional principles. The Court decided that although there was a privacy interest in contact information, the employees did not have a “reasonable expectation” that contact information would be withheld from plaintiff lawyers. Then the Court held that turning over the data, subject to a procedure allowing the employees to refuse consent, would not be a “serious invasion” of the employees’ rights.
But take heart, employees and employers, the Court threw you a very dry and meat-free bone:
when a discovery request seeks information implicating the constitutional right of privacy, to order discovery simply upon a showing that the Code of Civil Procedure section 2017.010 test for relevance has been met is an abuse of discretion.
The Court also clarified, however, that the plaintiff is not required to show a “compelling interest” in every case to justify an invasion of privacy. Rather, the courts are to balance the seriousness of the invasion, the sensitivity of the privacy right, and the employee’s expectations to decide if invasion of privacy is warranted. Some cases still will require compelling interests. Most won’t.
So, not a good day at the California Supreme Court for employers. Great day for plaintiff attorneys seeking leverage to extract settlements from California employers even when lawsuits have little or no merit.
This case is Williams v. Superior Court and the opinion is here.
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Reminders to San Francisco Employers…
The San Francisco minimum wage goes up to $14.00 per hour on July 1. Go to a restaurant to celebrate. No, not that restaurant. It closed last month. No, not that one either. Might have to settle for a coffee. Anyone know where to find a place that sells coffee in San Francisco?
Anyway, the City’s Office of Labor Standards Enforcement has a new poster and other information for you right here.
Also on July 1, employers with 35 employers or more must comply with San Francisco’s Parental Leave Ordinance. Information is here.
Happy July 4 all.
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