Wage and Hour Case Notes

• Publication year: 2021
• Author: By Leonard H. Sansanowicz

WAGE AND HOUR CASE NOTES

By Leonard H. Sansanowicz

Leonard H. Sansanowicz is the principal of Sansanowicz Law Group, P.C. and represents employees in all aspects of employment law. He is a member of the Executive Board of the California Employment Lawyers Association, as well as the Executive Committee of the Labor and Employment Section of the Los Angeles County Bar Association. He can be contacted at: leonard@law-slg.com.

(SOME) PAGA CLAIMS MAY BE BROUGHT AGAINST THE CALIFORNIA STATE UNIVERSITY

Sargent v. Bd. of Trustees of the Calif. State Univ., 55 Cal. App. 5th 982 (2021)

Plaintiff was a health and safety technician at Sonoma State University, a campus of the California State University (CSU) system. Plaintiff sued for whistleblower retaliation and civil penalties pursuant to the Labor Code Private Attorneys General Act of 2004 (PAGA)¹ for violations of the California Occupational Safety and Health Act of 1973 (Cal/OSHA).² Plaintiff prevailed at trial and defendant appealed, arguing it was exempt from PAGA as a public entity and because California Education Code section 66606.2 barred PAGA claims against the university.

Section 66606.2(b) provides that no legislation enacted after January 1, 1997 "that applies generally to the state or to state agencies, departments, or boards" may be applied to CSU unless the statute specifically provides that CSU "is to be governed by that statute." The Sargent court found defendant's argument "far too expansive," as the section was not meant to apply to all laws of general applicability, only those directed to the state or its agencies, departments, or boards, which PAGA is not. Moreover, the appellate court noted, no court had yet applied section 66606.2 to any new statute.

The Court of Appeal further held PAGA civil penalties could be applied to CSU, but only those California Labor Code sections that specifically provide for a civil penalty (as opposed to the default penalty under section 2699(f) on violations of California Labor Code sections for which a civil penalty is not provided). The Court reasoned that section 2699(a) allows an aggrieved employee to bring a civil action to recover civil penalties that the Labor and Workforce Development Agency (LWDA) could assess and collect, based on "any provision of [the California Labor Code] that provides for a civil penalty." However, the Court found the term "person" under the California Labor Code, which applies to the default penalty, did not cover CSU, because the definition does not contain words or phrases commonly used to refer to public entities or governmental agencies.³ The Court acknowledged that public employees have successfully sued under PAGA, so that CSU was not immune from suit simply because it is a public employer.⁴ Ultimately, though, the appellate court reversed the PAGA award in its entirety, since the plaintiff had not been affected personally by the alleged CalOSHA violations and his whistleblower claim (Cal. Lab. Code § 232.5) did not have an independent civil penalty attached to it.

THE FAA DOES NOT PREEMPT PAGA CLAIMS, AND THE ISSUE OF "AGGRIEVED EMPLOYEE" IS NOT ARBITRABLE

Contreras v. Super. Ct., 61 Cal. App. 5th 461 (2021)

Plaintiffs alleged that the defendant misclassified them as independent contractors. Defendant moved to compel arbitration, and the trial court granted the motion as to whether plaintiffs were "aggrieved employees." The Second Appellate District overruled the order, finding that the delegation of that question to the arbitrator would frustrate PAGA's purpose and therefore was prohibited as a matter of law.

The arbitration agreement had a waiver of class and representative actions. The Contreras court noted that in Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal. 4th 348 (2014), the California Supreme Court held that PAGA claims are not waivable, nor are they arbitrable, because the State is the real party in interest and the State is not a party to a private arbitration agreement. The Court of Appeal rejected defendant's argument that PAGA claims are subject to the Federal Arbitration Agreement (FAA) because of the United States Supreme Court's rulings in AT&T Mobility, LLC v. Concepcion, 563 U.S. 333 (2011), and Epic Systems Corp. v. Lewis, 138 S.Ct. 1612 (2018). The Court of Appeal joined two other recent California appellate decisions—Correia v. NB Baker Elec., Inc., 32 Cal. App. 5th 602 (2019) and Olson v. Lyft, Inc., 56 Cal. App. 5th 862 (2020)—that previously had rejected the argument that Epic Systems meant the FAA...