From July 1, 2016, employers in the City of Los Angeles must allow for at least 48 hours of employee paid sick leave in each year of employment, calendar year, or 12-month period. Accrued unused paid sick leave will roll over to the following year of employment and may be capped at 72 hours. Paid sick leave may be provided in lump sum at the beginning of the year, or accrued at a rate of at least 1 hour per every 30 hours worked which is the same minimum accrual rate as CA law, but with a higher accrual cap. CA has a cap of 48 hours.
The Labor Code Private Attorneys General Act (PAGA) authorizes aggrieved employees to file lawsuits to recover civil penalties on behalf of themselves, other employees, and the State of California for Labor Code violations. PAGA cases must follow the requirements specified in Labor Code Sections 2698 – 2699.5. SB 836 became effective on June 27, 2016. It made important changes in PAGA requirements. These requirements apply prospectively to all pending PAGA cases as well as new ones.
- All new PAGA claim notices must be filed online, with a copy sent by certified mail to the employer.
- All employer cure notices or other responses to a PAGA claim must be filed online, with a copy sent by certified mail to the aggrieved employee or aggrieved employee’s representative.
- A filing fee of $75 is required for a new PAGA claim notice and any initial employer response [cure or other response] to a new PAGA claim notice.
- The filing fee may be waived if the party on whose behalf the notice or response is filed is entitled to in forma pauperis status.
- The time for the Labor and Workforce Development Agency (LWDA) to review a notice under Labor Code § 2699.3(a) has been extended from 30 to 60 days.
- When filing a new PAGA lawsuit in court, a filed-stamped copy of the complaint must be provided to LWDA. (Applies only to cases in which the initial PAGA claim notice was filed on or after July 1, 2016.)
- Any settlement of a PAGA action must be approved by the court, whether or not the settlement includes an award of PAGA penalties.
- A copy of a proposed settlement must be provided to LWDA at the same time that it is submitted to the court.
- A copy of the court’s judgment and any other order that awards or denies PAGA penalties must be provided to LWDA.
All items that are required to be provided to the LWDA must be submitted online. All PAGA related notices and documents are no longer required to be submitted to LWDA by certified mail.
Employers of 26 or more employees need to update their handbooks and revise their HR policies. They need to provide wage increases to their minimum wage employees effective July 1, 2016, adopting both minimum wage rules and paid sick leave benefits applicable to all employees who perform at least two hours of work in a particular week within the boundaries of the City of Los Angeles.
California law provides that for every four hours of work, an employee must be allowed a ten minute rest break. The employer is not obligated to ensure one is taken, and the employee may opt to not take a rest break. An employer also may require an employee to remain on work premises during a rest period.
It is unclear when the rest period should be taken. It is not required by law that a rest period be taken after a four hour work period, only that a rest period is permitted for every four hours worked.
In 2012, the California Supreme Court decided an important meal and rest break case, Brinker Restaurant Corp. v. Superior Court. The question of whether employers must ensure breaks are taken or must simply provide breaks has been a source of significant litigation in both federal and state courts. The California Supreme Court ruled in Brinker’s favor on the most critical part of the decision – holding that employers do not have to ensure employees take their meal breaks. Once the meal period is provided, there is no duty to police meal breaks to ensure no work is being done. This case has been, in an usual act by the court, “depublished” pending subsequent filings. Although depublished, California courts have followed the decision and cited to the Brinker decision.
Class certification is most often defeated where there is no “community of interest”, and most often for failure of commonality, or “predominance” grounds, rather than on the grounds of typicality, adequacy, ascertainability, and numerosity.
The ‘community of interest’ requirement embodies three factors: (1) predominant common questions of law or fact; (2) class representatives with claims or defenses typical of the class; and (3) class representatives who can adequately represent the class.
In opposing class certification defense has to show plaintiff would not be able to establish liability on the merits, i.e., there is no substance to the allegations complained of. Thus there is no commonality or predominance of class issues. There may be individualized issues but the common issues do not predominate.
Following is a synopsis of California law as it pertains to class certification:
In 2011, the United States Supreme Court raised the bar for plaintiffs seeking class certification by requiring lower courts to conduct a “rigorous analysis” to determine whether the prerequisites for certification are met. Wal-Mart, 131 S. Ct. at 2551 (reversing the grant of class certification due to a lack of commonality under Fed. R. Civ. P. 23(a)(2)). This “rigorous analysis,” the Court explained, often will “entail some overlap with the merits of the plaintiff’s underlying claim.” Id. In the words of the Court, a merits-entwined inquiry for purposes of class certification “cannot be helped.” Id. at 2551-52 (collecting cases).
Two years later, the Supreme Court doubled-down on its “rigorous analysis” requirement for class certification, applying the teachings of Wal-Mart to prospective Rule 23(b)(3) classes as well. See Comcast Corp. v. Behrend, 133 S. Ct. 1426, 1432 (2013) (reversing the grant of class certification due to a lack of predominance under Fed. R. Civ. P. 23(b)(3)). In Comcast, the Court criticized the lower court’s “refus[al] to entertain arguments against respondents’ damages model that bore on the propriety of class certification, simply because those arguments would also be pertinent to the merits determination.” Id. at 1432-33. Rather, the Court’s precedents “flatly” require a determination that Rule 23 is satisfied, “even when that requires inquiry into the merits of the claim.” Id. at 1433.
The third installment in the Supreme Court’s class-action trilogy came in 2014 in Halliburton Co. v. Erica P. John Fund, Inc., 134 S. Ct. 2398 (2014). There, the Supreme Court opened the door even further to merits-based defenses at the class-certification stage—this time in the context of securities class actions. In Halliburton, the Court held that securities defendants can rebut the presumption of reliance under a fraud-on-the-market theory not only during the merits phase but also during class certification. Id. at 2414-15. Securities defendants, moreover, can rebut this presumption through the use of direct and indirect evidence alike. Id. at 2417.
The Wal-Mart/Comcast/Halliburton triumvirate marked big wins for class-action defendants, enabling them to raise merits-based defenses that might otherwise never be presented to a court. That is so because many class cases are settled following certification, given the high stakes of merit-stage proceedings. Now, those merits issues are ripe for consideration at the class stage, to the extent they inform the certification analysis.
Other courts have also followed these decisions discussed above. To the extent the propriety of certification depends upon disputed threshold legal or factual questions, a court may, and indeed must, resolve them”); Bartold v. Glendale Fed. Bank, 81 Cal. App. 4th 816, 829 (2000) (“when the merits of the claim are enmeshed with class action requirements, the trial court must consider evidence bearing on the factual elements necessary to determine whether to certify the class”). Wal-mart Stores, Inc. v. Dukes , 131 S. Ct. 2541, 2551-52 (2011) (citing Gen. Telephone Co. of S.W. v. Falcon, 457 U.S. 147, 102 S. Ct. 2364, 72 L. Ed. 2d 740 (1982)); see also Ellis v. Costco Wholesale Corp., 657 F.3d 970, 984 (9th Cir. 2011) (holding the district court erred by failing to conduct a “rigorous analysis” of the merits to determine whether the plaintiffs had established commonality under Rule 23); In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 318 (3d Cir. 2008) (class certification requires “thorough examination” of factual and legal allegations; “rigorous analysis may include a preliminary inquiry into the merits” and consideration of “the substantive elements of the plaintiffs’ case in chief).
To be fair however, many courts in California are reluctant to quickly dismiss a class certification effort. The abuse of class action lawsuits however, has caused many California courts to direct more attention to the actual facts underlying Plaintiffs’ claims in a class action, to determine whether Plaintiff can produce any substantive claim, prior to a lengthy and costly class action lawsuit.