Surprising New Pro-Employer PAGA Decision

• Published date: 03 November 2021
• Subject Matter: Litigation, Mediation & Arbitration, Class Actions, Trials & Appeals & Compensation
• Law Firm: Kronick Moskovitz Tiedemann & Girard
• Author: Mr Bruce A. Scheidt and Ian B. Sangster

Issue

In Wesson v. Staples the Office Superstore, LLC, (Cal. Ct. App., Sept. 9, 2021, No. B302988) 2021 WL 4099059, Division Four of the Second Appellate District of the California Court of Appeal tackled an issue of first impression: "whether trial courts have inherent authority to ensure that PAGA claims will be manageable at trial, and to strike such claims if they cannot be managed." (Id. at *1.)

Result

After drawing on established principles of the courts' inherent authority to manage litigation, including ensuring the manageability of representative claims, the Court of Appeal concluded that "courts have inherent authority to ensure that PAGA claims can be fairly and efficiently tried and, if necessary, may strike claims that cannot be rendered manageable" and "as a matter of due process, defendants are entitled to a fair opportunity to litigate available affirmative defenses, and a court's manageability assessment should account for them..." (Id. at *2.)

Applying these principles to the factual record before the trial court, the Court of Appeal affirmed the trial court's order striking plaintiff's PAGA claim. Specifically, the Court of Appeal found that, given the state of the record and plaintiff's lack of cooperation with the trial court's manageability inquiry, the trial court did not abuse its discretion in striking his PAGA claim as unmanageable. (Id.)

Facts

In Wesson, plaintiff worked for Staples the Office Superstore, LLC ("Staples") as a store general manager ("GM"). In 2015, plaintiff brought an action against Staples alleging various causes of action including unpaid overtime and failure to provide meal and rest breaks. (Id. at *2.) Each of plaintiff's claims was premised on the theory that Staples had misclassified the GM position as exempt.

Plaintiff subsequently amended his complaint to add a cause of action seeking civil penalties under PAGA. (Id.) Plaintiff's PAGA claim purported to cover 346 GMs and sought $36 million in civil penalties. (Id. at *2.)

Plaintiff later moved to certify a class of GMs in the class action lawsuit, but the trial court denied his motion, concluding he had not demonstrated that his claims were susceptible to common proof. (Id. at *2.) Specifically, the trial court found that important factual questions relating to whether GMs spent most of their time performing exempt, managerial tasks could not be resolved on a classwide basis. (Id.)

Following the trial court's denial of class certification, Staples moved...