Mendoza v. Nordstrom, 8/3/17, Ninth Cir.
By statute, employees in California are entitled to one day’s rest in seven. Labor Code section 551. Plaintiffs filed a PAGA action (see Labor Code s. 2699 et seq.) against Nordstrom alleging violations of this principle. Over the years of his employment with Nordstrom, plaintiff had once worked 7, 8 and 11 days consecutively. In each of those instances, plaintiff did not work seven consecutive days in the same workweek, and at least one of his shifts had been less than six hours. Moreover, while Nordstrom hadn’t scheduled him to work that many shifts in a row, he agreed to it after his supervisor asked him to cover a shift for a sick co-worker. After a court trial, the district court found for Nordstrom and dismissed plaintiff’s PAGA claim. Held: Affirmed.
Section 551 says that “Every person employed in any occupation of labor is entitled to one day’s rest therefrom in seven.” Section 552 provides that “No employer of labor shall cause his employees to work more than six days in seven.” Section 556 says that “sections 551 and 552 shall not apply to any employer or employee when the total hours of employment do not exceed 30 hours in any week or six hours in any one day thereof.”
Until now, no published case in California had involved these questions. The Ninth Circuit therefore certified three questions to the California Supreme Court: 1) Is the limit in section 551 calculated by the workweek (versus any consecutive seven-day period); 2) For the section 556 exemption to apply, does the employee have to work 6 hours or less in every shift (versus in at least one shift); and 3) Without violating the statute, can an employer allow an employee (versus inducing the employee) to work a seventh day if, after informing the employee of his rights, the employee voluntarily chooses to work the seventh shift?
The Supreme Court answered: Yes, yes, and yes.
While the district court’s analysis of the applicable law did not match how the California Supreme Court ultimately answered the first two questions, the district court got to the right result. That’s all it takes to be entitled to affirmance.
The Ninth Circuit also affirmed the district court refusal to allow plaintiff to substitute another plaintiff to pursue the Labor Code section 551 in his place. A proper PAGA plaintiff is an “aggrieved employee.” Section 2699(c) provides: “For purposes of this part, “aggrieved employee” means any person who was employed by the alleged violator and against whom one or more of the alleged violations was committed.” Plaintiff was not an aggrieved employee. Because of the mandatory pre-filing procedural requirements under PAGA, one plaintiff can’t simply substitute for another: Even if aggrieved employees do exist, under the requirements of Labor Code section 2699.3, they would have to exhaust their claims administratively before bringing a PAGA action of their own. That is, they would have to file a pre-filing notice with the Labor and Workforce Development Agency (LWDA), after which the LWDA would have 120 days to investigate the purported claim.
The Ninth Circuit rejected plaintiff’s argument that the district court was required to allow a substitution of parties. The district court had previously asked plaintiff if he wanted to add parties and plaintiff declined; while party substitutions are common in class actions, PAGA actions are different in critical respects; and, ultimately, the decision of the district court on this issue would be reviewed under the abuse of discretion standard.
Two thoughts here: First, a request by plaintiff to substitute a new plaintiff after the court trial and after judgment has already been entered against him is, well, startling. The case is over. Second, intuitively I like the court’s ruling on this issue: A PAGA case is not a class action; it’s a qui tam action. The plaintiff is not seeking damages for fellow class members, but civil penalties which go to the state (except for the 25% reward). In a class action, the plaintiff is representing himself and his fellow class members; a substitution (or addition of plaintiffs) as needed is totally appropriate. In a PAGA action, the plaintiff is not working for fellow class members but for the state. It seems odd that a new plaintiff could substitute in for the original plaintiff who never had the right to bring a PAGA claim in the first place. Perhaps it would be different if the original plaintiff was an aggrieved employee but could no longer continue with the case, and if the LWDA itself consented to the substitution. The future will tell.
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