In a blow to employers, the California Supreme Court ruled July 13, 2017, that employers can be required to turn over statewide employee information to allow a plaintiff to discover information about other potentially “aggrieved” employees in a Private Attorneys General Act (PAGA) action. The PAGA statute allows private citizens to sue on behalf of the state for violations of California wage and hour laws and allows the recovery of substantial penalties for proven violations. In the Williams v. Superior Court case, the Supreme Court unanimously held that a PAGA plaintiff is entitled to the same discovery regarding other employees as a Plaintiff in a wage and hour class action. This decision could make it exponentially more expensive for employers to defend themselves against PAGA litigation. 

In Williams, the plaintiff sought the names and addresses of 16,500 employees who worked at Marshalls stores throughout the state of California. Although Marshalls objected to the discovery requests as overbroad and burdensome, the Court held that the Plaintiff was entitled to learn information about potential employee witnesses who observed “alleged illegalities.” The Court cited the strong public policy in favor of broad discovery and “the vindication of consumer protections.”

In a minor concession to employers, the Court stated “[w]e recognize that in a particular case there may be special reason to limit or postpone a representative plaintiff‘s access to contact information for those he or she seeks to represent.” However, the Court failed to clarify or provide any examples of what would qualify as a “special reason” and instead reiterated that “the default position is that such information is within the proper scope of discovery, an essential first step to prosecution of any representative action.”

What steps should employers take? 

Wage and hour litigation continues to proliferate in California, and the Williams decision could significantly increase defense costs for employers. To prevent liability, employers are strongly encouraged to conduct regular wage and hour audits to ensure that they are fully complying with the many complex and technical applicable laws. Employers should also immediately seek the advice of qualified employment counsel if they receive a letter to the Labor Workforce Development Agency regarding potential PAGA claims. 

Many wage and hour lawsuits commence because a disgruntled employee feels mistreated or disrespected by an employer and he or she embraces the opportunity to become a plaintiff in a PAGA action. Accordingly, employers are also encouraged to foster a workplace where employees can openly redress grievances and be treated with respect (especially during the termination process) in order to reduce the likelihood that a current or former employee will be successfully recruited as a plaintiff in a PAGA action.