Huff v. Securitas Sec. Servs. United States, Inc.

23 Cal.App.5th 745

233 Cal.Rptr.3d 502

Forrest HUFF, Plaintiff and Respondent,

v.SECURITAS SECURITY SERVICES USA, INC., Defendant and Appellant.

H042852

Court of Appeal, Sixth District, California.

Filed May 23, 2018

Michael Millen, Los Gatos for Plaintiff/Respondent.

James E. Hart, John Kevin Lilly, Littler Mendelson, Sherry Beth Shavit, Tharpe & Howell, LLP, Sherman Oaks for Defendant/Appellant Securitas Security Services USA, Inc.

Grover, J.

This case presents the question of whether a plaintiff who brings a representative action under the Private Attorneys General Act of 2004 (PAGA; Lab. Code, § 2698, et seq. ) may seek penalties not only for the Labor Code violation that affected him or her, but also for different violations that affected other employees. The trial court granted plaintiff Forrest Huff a new trial, reasoning that Huff's failure to prove he was personally affected by one of the multiple Labor Code violations alleged in his complaint did not preclude his action under PAGA. As we will explain, we conclude that PAGA allows an "aggrieved employee"—a person affected by at least one Labor Code violation committed by an employer—to pursue penalties for all the Labor Code violations committed by that employer. We will therefore affirm the order granting a new trial.

I. BACKGROUND

Huff worked as a security guard for defendant Securitas Security Services USA, Inc. (Securitas). Securitas provides businesses with on-site security. It hires employees to work as security guards, and then contracts with its clients to provide guards for a particular location. Securitas occasionally places guards in temporary assignments, but it more typically provides clients with long term placements. (A standard contract duration, though terminable on 30 days' notice, is three years.)

Huff was employed by Securitas for about a year, during which time he worked at three different client sites. After he was removed from an assignment at the request of the client, Huff resigned his employment. Two months later, he sued Securitas for Labor Code violations. The operative second amended complaint contains a representative cause of action under PAGA, seeking penalties for Labor Code violations committed against Huff and other employees. According to the complaint, the basis for the PAGA claim is that Securitas is subject to penalties for violations of "numerous Labor Code provisions." The Labor Code provisions alleged to have been violated include sections 201 [requiring immediate payment of wages upon termination of employment]; 201.3, subdivision (b) [requiring temporary services employers to pay wages weekly]; 202 [requiring payment of wages within 72 hours of resignation]; and 204 [failure to pay all wages due for work performed in a pay period] (unspecified statutory references are to the Labor Code).

Because of the representative nature of the action, the case was designated complex and the court ordered that the trial would proceed in phases. The parties agreed the first phase of the trial would involve a sample of 20 Securitas employees (10 selected by Huff and 10 by Securitas), and would determine only certain disputed issues as to those employees. Among the issues the parties agreed to have determined in the first phase were whether the sample employees had been paid on a weekly basis as required by Labor Code section 201.3, subdivision (b)(1) ; whether they were assigned to work for a client for over 90 days (and were therefore exempt from the weekly pay requirement under the exemption provided for by section 201.3, subdivision (b)(6) ); and the amount of any penalties to be imposed against Securitas.

The first phase was tried to the court. After Huff presented his case, Securitas moved for judgment under Code of Civil Procedure section 631.8.

The trial court granted the motion, finding that the evidence established Huff was not a temporary services employee as defined by section 201.3, subdivision (b)(1), and as a result could not show he was affected by a violation of that section. The court further decided that Huff had no standing to pursue penalties under PAGA on behalf of others who were affected by that violation. Judgment was entered in favor of Securitas.

Huff moved for a new trial under Code of Civil Procedure section 657, and the trial court granted that motion. The court found that it made an error in law when it entered judgment in favor of Securitas based on Huff's inability to prove a violation of the section 201.3, subdivision (b)(1) weekly pay requirement. Under PAGA an "aggrieved employee" can pursue penalties for Labor Code violations on behalf of other current and former employees, and the statute defines an aggrieved employee as someone who suffered "one or more of the alleged violations" of the Labor Code for which penalties are sought. Relying on that statutory definition, the court concluded that so long as Huff could prove he was affected by at least one Labor Code violation, he could pursue penalties on behalf of other employees for additional violations. Since Huff's complaint alleged that another violation of the Labor Code (separate from the weekly pay requirement) affected him personally, the court decided that the failure to establish a violation of the weekly pay requirement did not preclude his entire PAGA cause of action. Securitas appeals from the order granting Huff a new trial.

II. DISCUSSION

A. THE PRIVATE ATTORNEYS GENERAL MODEL OF LABOR LAW ENFORCEMENT

California law closely regulates the working conditions of employees and the payment of their wages. (See, e.g., §§ 201 [requiring immediate payment of all wages due upon discharge of an employee]; 202 [requiring payment of wages within 72 hours of an employee's resignation]; 201.3 [requiring weekly payment of wages for temporary employees]; 204 [requiring semi-monthly payment of wages during regular employment].) Those labor laws are enforceable in several ways: An employee can file suit to recover wages owed and any statutory damages provided for by the Labor Code (see, e.g., § 203). An employee can file an administrative complaint with the Labor Commissioner, who is authorized to investigate complaints and order employers to pay wages owed (§ 98). Violations of certain provisions are punishable by a monetary penalty, which the Labor Commissioner can recover in an administrative proceeding or in court (§§ 210, 225.5); and some violations may be prosecuted as criminal offenses (§§ 215, 216, 218).

Despite those statutes and remedies, the Legislature found state labor laws were not being effectively enforced. ( Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 379, 173 Cal.Rptr.3d 289, 327 P.3d 129 ( Iskanian ).) Declining funding and staffing levels had left state agencies unable to produce widespread compliance. ( Arias v. Superior Court (2009) 46 Cal.4th 969, 980–981, 95 Cal.Rptr.3d 588, 209 P.3d 923.) The solution the Legislature devised is the statute at issue in this case. PAGA was enacted in 2003 to allow private parties to sue for the civil penalties previously only recoverable by a state agency. ( Iskanian , supra , 59 Cal.4th at p. 379, 173 Cal.Rptr.3d 289, 327 P.3d 129.) As the California Supreme Court recognized in Iskanian , PAGA created a type of qui tam action, authorizing a private party to bring an action to recover a penalty on behalf of the government and receive part of the recovery as compensation. ( Id. at p. 382, 173 Cal.Rptr.3d 289, 327 P.3d 129 ). When an employee brings a representative action under PAGA, he or she does so "as the proxy or agent of the state's labor law enforcement agencies, not other employees." ( Esparza v. KS Industries, L.P. (2017) 13 Cal.App.5th 1228, 1241, 221 Cal.Rptr.3d 594.)

"The purpose of the PAGA is not to recover damages or restitution, but to create a means of ‘deputizing’ citizens as private attorneys general to enforce the Labor Code. [Citation.]" ( Brown v. Ralphs Grocery Co. (2011) 197 Cal.App.4th 489, 501, 128 Cal.Rptr.3d 854.) The relief provided by the statute is designed to benefit the general public, not the party bringing the action. ( Ibid . ) Since PAGA is fundamentally a law enforcement action, a plaintiff must first allow the appropriate state authorities to investigate the alleged Labor Code violations, by providing the Labor and Workforce Development Agency with written notice of the violations. ( Montano v. Wet Seal Retail, Inc. (2015) 7 Cal.App.5th 1248, 1256, 213 Cal.Rptr.3d 649, citing § 2699, subd. (a).) Only if the agency elects not to pursue the violations may an employee file a PAGA action. (§ 2699.3, subd. (a)(2).) The penalties that can be recovered in the action are those that can be recovered by state enforcement agencies under the Labor Code; they are separate from the statutory damages that can be recovered by an employee pursuing an individual claim for a Labor Code violation. ( Iskanian , supra , 59 Cal.4th 348, 381, 173 Cal.Rptr.3d 289, 327 P.3d 129.) Penalties recovered by a plaintiff in a PAGA case are paid mostly to the state. (See § 2699, subd. (i) [75 percent distributed to the Labor and Workforce Development Agency, and the remaining 25 percent to aggrieved employees].)

B. AN EMPLOYEE AFFECTED BY AT LEAST ONE LABOR CODE VIOLATION MAY PURSUE PENALTIES ON BEHALF OF THE STATE FOR UNRELATED VIOLATIONS BY THE SAME EMPLOYER

Securitas contends the trial court erred in concluding that so long as Huff was affected by at least one Labor Code violation, he can sue under PAGA to recover penalties for any alleged violation by Securitas, even those that did not affect him. Securitas does not dispute that PAGA authorizes a plaintiff to recover penalties for Labor Code violations suffered by other employees. But it argues the statute allows for that only when the violations against the other employees involve the same provision of the Labor Code as the violation suffered by the plaintiff. Resolving the issue raised by Securitas requires us...