In a significant victory for employers, the California Supreme Court ruled that employees may not recover unpaid wages for themselves or other coworkers under Section 558 of the Private Attorneys General Act (PAGA).
ZB, N.A. and Zions Bancorporation v. Superior Court of San Diego County, No. S246711 (Cal. Sept. 12, 2019) will now limit the ability of employees to circumvent arbitration agreements. PAGA actions have been used by employees in the past to avoid arbitration and begin class action wage dispute claims against their employers. In those cases, the state would collect 75 percent and 25 percent would go to the employees.
Under this new ruling, the Supreme Court said that recovery of unpaid wages is compensatory relief – not a civil penalty – and that only the Labor Commissioner can enforce the recovery of unpaid wages under Section 558.
Do you have questions about the PAGA decision? Call us for a consultation at (951) 300-2690.
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