Employers in California Can Tone Down Their Celebrations about the U.S. Supreme Court Decisions In Wal-Mart and Concepcion

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Understandably, employers have celebrated the U.S. Supreme Court decisions in Wal-Mart Stores, Inc. v. Dukes, 564 U.S. ---, --- S.Ct. ---, 180 L. Ed. 2d 374 (2011) and AT&T Mobility v. Concepcion, 563 U.S. ---, 131 S.Ct. 1740, 179 L.Ed.2d 742 (2011). At the very least, those cases would seem to suggest that the wage-hour class actions and collective actions that have besieged employers might be curtailed significantly, along with the costly settlements triggered by the in terrorem effect of such lawsuits.

California employers can stop celebrating, or at least tone down those celebrations.

Unlike other states, California law provides for a mechanism by which employees can file suit on behalf of other employees without bringing such claims as class actions – the Private Attorneys General Act (“PAGA”). PAGA, often referred to as “The Bounty Hunter Law,” generally allows an employee to file suit against an employer on behalf of all “aggrieved employees” for alleged violations of the California Labor Code. The potential recovery in a PAGA claim can be staggering – while the limitations period is only one year, each “aggrieved employee” can recover up to $100 for the first pay period in which a violation occurs, and up to $200 for each subsequent pay period in which a violation occurs. PAGA also provides for the recovery of costs and attorney’s fees.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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