Kelly A. Knight is an attorney and mediator based in Los Angeles, CAlifornia. He handles matters throughout California.

Khan v. Dunn-Edwards Corp.: a bizarre situation leads to grant of MSJ based on defective PAGA notice that failed to allege that there are other aggrieved employees

Here's a short take on a bizarre case. 

In Khan v. Dunn-Edwards Corp., Cal. Ct. App. no. B270382 (2d Dist. Jan. 22, 2018) (slip opinion linked here), the 2nd District of the California Court of Appeal affirmed the trial court's grant of a defendant's motion for summary judgment in an employment wage-hour PAGA case. (This one comes out of Judge Richard Fruin's courtroom in the Stanley Mosk courthouse.)

After termination of employment, the plaintiff filed a purported class-action lawsuit premised on receiving his final paycheck eleven days after termination in violation of Labor Code sections 201 to 203.

During the litigation, the plaintiff sent a notice to the employer and Labor and Workforce Development Agency ("LWDA") to satisfy the requirements of the Labor Code Private Attorneys General Act of 2004, Labor Code section 2698 et seq. ("PAGA").

Bizarrely, the plaintiff's notice never mentioned or alleged any violations of the Labor Code by the employer against any employee other than the plaintiff himself:

This correspondence shall constitute written notice under Labor Code § 2699.3 of my claims against my former employer, Dunn-Edwards Corporation (‘Dunn Edwards’ or ‘Defendant’). Specifically, I allege that Dunn Edwards:

1. Violated Labor Code § 226(a) by failing to identify all of the required information on my final paycheck stub/itemized wage statement that I received, including but not limited to the pay period begin date, the correct pay date, and the total hours worked.

2. Violated Labor Code §§ 201-203 by failing to pay all of my earned wages immediately upon termination and failure to pay waiting time penalties as a result thereof. 

Slip op. at 2-3 (italics added by the court).  And, according to the Khan court, the plaintiff “admitted that his notice ‘makes no mention of any other Labor Code violations and does not reference any other current or former employee besides Khan.’” Id. at 3.  

After the required waiting period, the plaintiff filed a first amended complaint and included a PAGA cause of action.

The trial court later granted the defendant’s motion for summary judgment on grounds that the PAGA notice was deficient for failure to allege that there were any other aggrieved employees.

Prior to filing a PAGA action, the aggrieved-employee plaintiff must give notice to the employer that includes notice of the Labor Code provisions that were violated and “the facts and theories to support the alleged violation.”  Id. at 6, quoting Williams v. Super. Ct., 3 Cal. 5th 531, 545 (2017). One purpose is to provide the LWD”A with “the opportunity to decide whether to allocate scarce resources to an investigation, a decision better made with knowledge of the allegations an aggrieved employee is making and any basis for those allegations." Id. Another purpose is to provide the employer an opportunity to respond to the LWDA. Id.

Affirming, the Court of Appeal was clear in affirming that the plaintiff's PAGA notice was defective because it expressly alleged violations only with respect to him:

Because his notice expressly applied only to him, it failed to give the Labor and Workforce Development Agency an adequate opportunity to decide whether to allocate resources to investigate Khan’s representative action. Because Khan referred only to himself, the agency may have determined that no investigation was warranted. Additionally, the notice failed to provide Dunn-Edwards with an adequate opportunity to respond to the agency since the notice suggested only an individual violation.
Because Khan failed to give fair notice of the individuals involved, he failed to comply with the administrative requirement, and the trial court properly granted summary judgment.

Id. at 7, 8.

The basic lesson is clear: when seeking to bring a PAGA claim on behalf of other aggrieved employees, the PAGA plaintiff's notice must actually allege that there are other aggrieved employees(!). Otherwise, as happened in Khan, the employer may be able to defeat the claim with a simple dispositive motion.

What specificity is required (e.g., naming each aggrieved employee, describing them ("all employees in the cook position from date X to Y" or "all employees at the employer's worksite located at [address]"), or something else) remains to be seen as the courts continue to hash out interpretation of the PAGA.

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