United States: California Supreme Court Denies Sequenced Discovery In Representative PAGA Action

On July 13, 2017, the California Supreme Court rejected lower court holdings that limited an employee's ability to secure statewide employee contact and employment information in a representative PAGA action, when the plaintiff only worked in one of the employer's stores.

In Williams v. Superior Court of Los Angeles County (Marshalls of CA, LLC), Case No. S227228, Michael Williams sued Marshalls of CA, a retailer with approximately 130 stores in the state, for alleged wage and hour violations. Williams contended that Marshalls had failed to provide him and other aggrieved individuals with required meal and rest breaks or compensation, and that the retailer had a "systematic company-wide policy" of not paying premiums for missed breaks. Moreover, he alleged that Marshalls failed to give timely wage payment or complete and accurate wage statements to employees.

In discovery, Williams tendered two special interrogatories seeking "the name, address, telephone number, and company employment history of each nonexempt California employee in the period March 2012 through February 2014, as well as the total number of such employees." Marshalls objected, indicating that there were approximately 16,500 employees covered. Williams moved to compel responses.

THE LOWER COURTS

The trial court ordered Marshalls to provide employee contact information only for the store where Williams was employed, Costa Mesa, and required a Belaire-West notice to ensure protection of third-party privacy rights and the parties to share costs. The notice, taking its name from Belaire-West Landscape, Inc. v. Superior Court, (2007) 149 Cal. App. 4th 554, required notice to other employees and their ability to opt out from disclosure. While the court denied the motion to compel, it conditioned consideration of any renewed discovery motion on Williams being deposed for "at least six productive hours" and permitted Marshalls to rely on the deposition to demonstrate that the complaint lacked substantive merit. The trial court certified its order for immediate appeal.

Williams sought writ relief to secure broader employee contact information, but the Court of Appeals denied it.

AT THE CALIFORNIA SUPREME COURT

The California high court found Williams "presumptively entitled to an answer to his interrogatory seeking the identity and contact information of his fellow Marshalls employees."

After determining that Marshalls had the burden to establish cause to refuse to answer Williams' discovery requests, the Court reviewed and rejected Marshall's three objections. The first objection related to Williams' request for statewide contact information for employees outside "the position, job classification and location" where he had worked. Second, Marshalls maintained that the interrogatory was unduly burdensome because the information sought pertained to thousands without any showing that Williams was an aggrieved employee or that any such employees could be found in other stores. Finally, Marshalls objected because the private information was protected by the California Constitution.

As to the first objection, the Court, while recognizing that individual cases may present a basis "to limit or postpone" a representative plaintiff's receipt of contact information, reverted to "the default position" that such information is within the proper scope of discovery and the first step to assert a representative action. The Court also rejected the burdensomeness argument, finding that Marshalls had submitted no supporting evidence. The number of employees for whom information was sought, approximately 16,500, apparently did not alone meet the burden. Indeed, in a footnote the Court commented:

"Marshalls's discovery responses did identify the number of employees for whom information was sought but, while relevant, this information alone could not establish the requisite undue burden without further evidence of the time and cost required to respond. For example, dependent on the nature of any computer database Marshalls might maintain, providing information for 10,000 employees might prove little different than for 1,000, or 100."

Ultimately, the Court concluded that Marshalls did not establish the undue burden of disclosure and that the statute did not require "good cause" for seeking information through discovery requests.

Finally, the Court also found no merit in Marshalls' privacy objection because the interests of employees at other stores could have been protected by a Belaire-West notice discussed previously. This notice was used for discovery relating to Williams's store.

The Court's decision clearly tilts toward plaintiffs and gives them a vehicle to secure vast amounts of information under PAGA without any showing that the employee is "aggrieved" and without the guidelines or protections that would be generally applicable to Rule 23 class actions.

Bottom Line: The Williams opinion means that under PAGA a single employee can inflict significant expense and disruption on an employer with no showing that he or she has viable claims or that the claim is representative of those others might have. Hence, PAGA will continue to be a challenge for many employers, in large part because it lacks standards and meaningful guidance for courts or litigants.

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