Labor & Employment Law Blog

I. Summary

On December 30, 2024, and just before the New Year struck, the California Court of Appeal issued a favorable employer decision on the enforceability of arbitration agreements in Private Attorneys General Act (PAGA) cases. In Leeper v. Shipt, Inc., (2024 WL 5251619), the Second District Court of Appeal, Division One, in Los Angeles, held that because every PAGA action necessarily includes an “individual PAGA claim,” PAGA plaintiffs cannot attempt to avoid arbitration by characterizing their lawsuit as a purely representative PAGA claim made on behalf of only other allegedly aggrieved employees, but not the named representative themself. In other words, the court would not allow a “headless” PAGA action to proceed. Accordingly, the court directed the trial court to order the plaintiff, Christina Leeper’s individual PAGA claim to arbitration and stay the representative action in accordance with California Code of Civil Procedure section 1281.4.  This guidance should help end recent attempts by many plaintiffs attempting to circumvent arbitration by “disclaiming” their own individual claims in order to represent only others.

Lately, Deputy Labor Commissioners have been making unannounced visits to fast food stores in Los Angeles County to conduct audits. They arrive, sometimes alone, and sometimes in pairs, and ask for the manager.  The Deputy Labor Commissioners insist on conducting the audit while they are on the premises, and they have not been amenable to requests to come back on a date and time that is more convenient.  Below, please find useful information about the types of information that will be sought by the Deputy Labor Commissioners if you are subject to such an audit.

As an update to our previous post on the Fast Food Industry Minimum Wage (A.B. 1228:  Implications for Exempt Employees in the Fast Food Industry), on March 26, 2024, Governor Newsom signed Assembly Bill (AB) 610 which amends the definition of “fast food restaurant” to exempt restaurants in airports, hotels, theme parks, museums, event centers, and other locations from the Fast Food Council requirements, which took effect April 1, 2024.

Last year, Governor Newsom signed AB 1228, which repealed the FAST Recovery Act but established a modified version of the Fast Food Council (Council) through January 1, 2029. Importantly, the bill set forth minimum wage increases for fast food restaurant employees, with an increase to a minimum wage of $20.00 per hour for such employees effective April 1, 2024. 

On September 12, 2019, the California Supreme Court decided in a unanimous decision that in a Private Attorneys General Act (PAGA) action seeking to recover penalties under California Labor Code Section 558, a plaintiff may recover civil penalties but may not recover actual unpaid wages. This is an important decision, which now clearly prevents a plaintiff from seeking both statutory penalties and wages under PAGA (as is often argued by the plaintiff). The high court did, however, reinforce that actions seeking statutory penalties under PAGA cannot be compelled to arbitration.