On February 7, 2022, a California appellate court issued the latest decision regarding the Private Attorneys General Act (PAGA). Representative PAGA actions, which typically involve a relatively brief statute of limitations, permit California employees to collect civil penalties on behalf of the State of California for Labor Code violations committed against them and other employees. The recent decision in Hutcheson v. Superior Court of Alameda County, No. A159861, arises from an appeal in a lawsuit in which the original PAGA plaintiff decided not to continue as the plaintiff in the action and a substitute PAGA plaintiff intervened in the action. The substitute PAGA plaintiff, who would ordinarily have been limited to claims arising one year prior to when he identified the allegedly unlawful conduct, sought to maintain a longer statute of limitations period based on the actions of the original PAGA plaintiff, effectively extending the lawsuit’s reach back in time—and potential civil penalty exposure—by at least an additional year.

The Court of Appeal of the State of California, First Appellate District, Division Two, ruled on the facts of this particular case that the doctrine of relation back allowed a substitute PAGA plaintiff to maintain the original liability period based on the original plaintiff’s filing date. The court emphasized the following facts: the substitute plaintiff had timely filed his own PAGA notice letter, he was already pursuing a separate and timely filed lawsuit, and he had timely intervened in the earlier-filed action. The substitute plaintiff’s PAGA notice letter was also virtually identical to the notice letter of the original plaintiff. Thus, the Court of Appeal stipulated that where the claims in the substitute plaintiff’s amended complaint in substitution “rest[ed] on the same general set of facts, involve[d] the same injury, and refer[red] to the same instrumentality as the claims in the original complaint filed,” the relation back doctrine would apply and the substitute plaintiff could pursue civil penalties for alleged Labor Code violations for a period of time based on the original plaintiff’s identification of the alleged unlawful conduct.

Hutcheson appears limited to its specific facts. Perhaps most importantly, the second PAGA plaintiff, prior to the dismissal of the first-filed action, sought intervention in the action and then substitution for the original plaintiff. Had the second plaintiff failed to intervene but instead continued to pursue a separate lawsuit, there would have been no basis to argue relation back. Further, Hutcheson makes clear that a substitute plaintiff must still comply with each of the notice, standing, and timeliness requirements of PAGA to pursue a PAGA representative action. Namely, a PAGA representative-action plaintiff must (a) be an aggrieved employee (meaning, an employee of the defendant company who alleges that he or she personally suffered one or more violations of the Labor Code), (b) have provided pre-lawsuit notice to the California Labor and Workforce Development Agency (LWDA) and to the defendant before commencing the action, and (c) have provided the pre-lawsuit notice and initiated the lawsuit within one year and sixty-five days of filing the notice.

The effects of the Hutcheson ruling are limited to a narrow set of circumstances, including situations in which a second PAGA plaintiff timely seeks intervention in an existing lawsuit. Employers facing a similar scenario may want to scrutinize the substitute plaintiff’s compliance with each of the requirements. Moreover, Hutcheson does not affect an employer’s existing right to challenge the sufficiency of the pre-lawsuit PAGA notice and seek to strike some or all of the PAGA claims based on inadequate notice. Nor does this decision affect a trial court’s inherent power to strike or limit unmanageable PAGA lawsuits that would require an overly burdensome trial process to adjudicate.

Key Takeaways

Since 2014, thousands of PAGA notices have been submitted annually to the LWDA. As we previously highlighted, a number of PAGA-related decisions in 2021 are likely to facilitate a further uptick in PAGA litigation in 2022. Hutcheson will make it easier in some limited circumstances to maintain PAGA actions, and the decision may further fuel the trend of rising PAGA actions as the year progresses. Employers may be able to mitigate the risk of PAGA lawsuits by ensuring that their workplace policies and practices are up to date and compliant with recent developments in California wage and hour law.