Lately, we've had to defend a number of frivolous motions claiming that plaintiffs cannot proceed with wage claims until they have exhausted their remedies under the Labor Code Private Attorneys General Act of 2004 (PAGA). We're starting to work on a sanctions motion form that we are going to start filing when we see these things in the future.
The defendants typically raise both issues in a motion to strike and/or a demurrer, claiming that (as if they really want this to happen) the plaintiffs are first required to give notice under Labor Code § 2699 before proceeding with an action for wages or penalties under the Labor Code. The motions were always denied, even before Caliber Bodyworks, Inc. v. Superior Court (2005) 134 Cal. App. 4th 365.
Labor Code § 2699(a) allows "an aggrieved employee on behalf of himself or herself" to recover civil penalties in addition to the Labor and Workforce Development Agency. Subsection (f) defines the amount of the penalties. ($100 for each aggrieved employee per pay period for the initial violation and $200 for each aggrieved employee per pay period for each subsequent violation.) Such penalties may only be sought after notice to the employer and to the Labor and Workforce Development Agency.
However, if a plaintiff is not seeking penalties under Labor Code § 2699, there is no requirement that notice be given to the state, nor any requirement that defendants be given notice or an opportunity to cure. Exhaustion of administrative remedies is only required where a civil action is brought by an aggrieved employee "pursuant to subdivision (a) or (f) of Section 2699 alleging violation of any provision listed in Section 2699.5…"Labor Code § 2699.3(a).
In Caliber, the employees did not allege that they had satisfied the pre-filing notice and exhaustion requirements of Lab. Code, § 2699.3, subd. (a), before initiating their lawsuit, and their complaint made no reference to the PAGA. The court logically held that the employees could not maintain a private action under Labor Code § 2699, because the pre-filing notice and exhaustion requirements were mandatory as to causes of action that alleged a violation of one of the provisions listed in Labor Code § 2699.5, and that sought recovery of a civil penalty assessable by the California Labor and Workforce Development Agency. However, the court also held that workers could maintain private causes of action for unpaid wages, statutory penalties, including unfair business practice claims, because those were not subject to the notice and exhaustion requirements.
Because Caliber is now final (no petition for review was filed), employers and their counsel can not longer argue that they are making a good faith argument on an unsettled area of law. Sanctions under Code of Civil Procedure § 128.7 should be granted every time this ridiculous tactic is employed.