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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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California Supreme Court on California’s Day of Rest Law
The California Supreme Court issued a long-awaited ruling on California’s “Day of Rest” statutes, contained in the Labor Code at sections 551-558. The Court’s ruling is important for employers with workforces that do not work traditional Monday-Friday schedules. Justice Werdegar, who is retiring this summer, wrote the opinion for a unanimous court.
The case arose in the retail context. Mendoza worked at Nordstrom. He filled in for other employees, resulting in more than six consecutive days worked (even spanning over 2 work weeks). Not all his shifts lasted less than six hours. So, he and some other employees sued Nordstrom, the employer, for violating California’s one day’s rest in seven law. The case landed in federal court and before the 9th Circuit Court of Appeals. The court asked the California Supreme Court for clarity on the statutes.
Here are the Ninth Circuit’s questions and the Court’s answers:
1. Is the day of rest required by sections 551 and 552 calculated by the workweek, or does it apply on a rolling basis to any seven-consecutive-day period?
A day of rest is guaranteed for each workweek. Periods of more than six consecutive days of work that stretch across more than one workweek are not per se prohibited.
As the Court explained:
Interpreting sections 551 and 552 as applying on a weekly rather than rolling basis does so. It subjects employees and employers to a single set of consistent day of rest requirements, thereby facilitating the scheduling of work. Reading the day of rest statutes this way, the IWC‘s wage orders provide comparable protection but in clearer language, rather than altering or more narrowly guaranteeing employee day of rest protection.
So, if an employee works Tuesday, Wed., Thurs., Fri. Sat. and Sun in week one, that employee does not have to have that following Monday off. Rather, the seven day rule is measured on a workweek basis. That will make compliance with this part of the Labor Code much easier.
The Court next considered
2. Does the section 556 exemption for workers employed six hours or less per day apply so long as an employee works six hours or less on at least one day of the applicable week, or does it apply only when an employee works no more than six hours on each and every day of the week?
The Court answered this question:
The exemption for employees working shifts of six hours or less applies only to those who never exceed six hours of work on any day of the workweek. If on any one day an employee works more than six hours, a day of rest must be provided during that workweek, subject to whatever other exceptions might apply.
This question related to Labor Code section 556, which says:
Sections 551 and 552 shall not apply to any employer or employee when the total hours of employment do not exceed 30 hours in any week or six hours in any one day thereof.
This statute means that the prohibition on working seven days in a workweek does not apply to employees who are part-time as defined in section 556. But the Supreme Court had to decide whether the term “six hours in any one day” meant that only people who work fewer than six hours per shift, every shift, are not entitled to one day’s rest in seven. Or, did the law mean that an employee who works less than 30 hours per week AND who works at least one shift of fewer than six hours does not have to have a day off?
The Court’s answer was that only employees who work fewer than six hours a day AND fewer than 30 hours in a workweek are not entitled to one day’s rest in seven.
only employees asked to work no more than six hours on any one day, and no more than 30 hours total, may be given a schedule with seven days of work. Both the daily and weekly limit serve a role, as some schedules that involve no more than six hours a day might still require more than 30 hours over the course of the week, while some schedules that involve no more than 30 hours over the week might still include one or more days in excess of six hours.
Third, the Court considered what happens when an employee decides to work seven days in a row by switching or asks to work seven days in a row to earn extra money. Here is the Ninth Circuit’s question:
3. What does it mean for an employer to ―cause‖ an employee to go without a day of rest (§ 552): force, coerce, pressure, schedule, encourage, reward, permit, or something else? (See Mendoza v. Nordstrom, Inc., supra, 778 F.3d at p. 837.)
And here is the California Supreme Court’s answer:
An employer causes its employee to go without a day of rest when it induces the employee to forgo rest to which he or she is entitled. An employer is not, however, forbidden from permitting or allowing an employee, fully apprised of the entitlement to rest, independently to choose not to take a day of rest.
The Court explained
an employer‘s obligation is to apprise employees of their entitlement to a day of rest and thereafter to maintain absolute neutrality as to the exercise of that right. An employer may not encourage its employees to forgo rest or conceal the entitlement to rest, but is not liable simply because an employee chooses to work a seventh day.
So, this means that employers should include in their policies, such as regarding work schedules, switching, timekeeping, etc., that the employee is entitled to one day’s rest in seven, and that the employer does not encourage employees who take on extra shifts to work a seven-day workweek. The employer should also say that it will not retaliate against employees who do not wish to work on the seventh day, and that any employee who feels required to do so should report the matter to human resources or another member of management.
Employers also should review their scheduling policies to ensure that part-time workers are provided with one day off per workweek if they work more than six hours on any one day in that week.
This case is Mendoza v. Nordstrom, Inc. and the opinion is here.
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