Good news for employers: Trial courts can strike 'unmanageable' PAGA claims

The California Court of Appeal recently confirmed that trial courts have inherent authority to ensure Private Attorneys General Act of 2004 (PAGA) claims will be manageable at trial and to strike claims if they can't be managed. Although this is good news for employers, the appellate court warned that striking a PAGA claim based on manageability issues alone should be a last resort.

Background

Staples the Office Superstore, LLC, provides office products and services to individuals and businesses around the world. In California alone, it operates 150 big-box stores as of 2019.

Fred Wesson worked at Staples as a store general manager (GM). He sued the company, asserting, among other things, a representative claim under the PAGA on behalf of himself and 345 other current and former GMs in California. He sought close to $36 million in civil penalties for alleged Labor Code violations on the basis that Staples had misclassified its GMs as exempt executives.

GM responsibilities varied greatly from store to store based on "size, sales volume, staffing levels, labor budgets, and other variables that affected [their] work experience. . . . [H]ow GMs spent their time depended on their experience, aptitude, and managerial approaches, among other factors." GMs developed their own strategies regarding product placement, marketing and networking, and response to competition. They also were responsible for hiring, training, and coaching staff, scheduling and assigning work, promoting employees, and disciplining.

Staples' defense