Lopez v. Friant & Assoc.
A148849
Cal. Ct. App.Sep 26, 2017Background
- Eduardo Lopez sued employer Friant & Associates under PAGA alleging wage statements omitted required last-four SSN/employee ID digits (violating Lab. Code §226(a)(7)).
- Parties stipulated Friant issued 5,776 pay stubs missing that information.
- Friant moved for summary judgment, arguing §226(e)(1) requires an employee to prove an "injury" from a "knowing and intentional" violation and Lopez offered no evidence to show knowledge/intent.
- Trial court granted summary judgment for Friant, holding Lopez needed to prove the §226(e)(1) elements and had not raised a triable issue on knowledge/intent.
- Lopez appealed, arguing §226(e)(1)’s "injury" and "knowing and intentional" requirements apply to individual statutory damages, not to PAGA civil penalties under §2699.
- The Court of Appeal reversed, holding PAGA claims for violations of §226(a) do not require proof of §226(e)(1)’s injury or knowledge/intent elements; remedy distinctions and legislative history support that conclusion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a PAGA action for violation of §226(a) requires proving the §226(e)(1) elements ("injury" and "knowing and intentional") | Lopez: No — PAGA civil penalties under §2699 are distinct and do not incorporate §226(e)(1)’s requirements | Friant: Yes — §226(e)(1) requires injury and knowing/intentional conduct for penalties arising from §226(a) violations | Held: No — §226(e)(1) governs individual statutory damages, not PAGA civil penalties; proving a §226(a) violation suffices for a PAGA claim |
| Whether §226(e)(1)’s text and history apply to PAGA remedies | Lopez: Legislative text/history show §226(e) creates an individual damages remedy separate from civil penalties | Friant: §226(e)’s plain language imposes prerequisites that should apply regardless of remedy source | Held: Text and legislative history confirm §226(e) provides statutory damages to individuals; PAGA penal remedies are separate |
| Whether PAGA’s framework (including §2699.5) implies §226(e) applies | Lopez: PAGA expressly references §226(a) in §2699.5 but not §226(e), indicating §226(e) is not incorporated | Friant: Allowing PAGA without §226(e) would circumvent safeguards for individual statutory claims | Held: PAGA’s structure supports permitting PAGA claims based on §226(a) without §226(e) elements; collateral estoppel won’t supply §226(e) elements later |
| Whether summary judgment was appropriate given undisputed inadvertence and lack of harm | Friant: Even if §226(e) inapplicable, court should deny PAGA penalties because omission was inadvertent and promptly corrected | Lopez: Penalty-amount and mitigation arguments are for penalty-phase discretion, not summary judgment dismissal | Held: Summary judgment improper on that basis; trial court must consider discretionary penalty adjustments at penalty determination stage |
Key Cases Cited
- Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal.4th 348 (2014) (PAGA deputizes employees to recover civil penalties for Labor Code violations)
- Arias v. Superior Court, 46 Cal.4th 969 (2009) (effect of PAGA judgments and collateral estoppel for labor-code violations)
- Villacres v. ABM Industries Inc., 189 Cal.App.4th 562 (2010) (distinguishing civil penalties under PAGA from statutory penalties/damages)
- Dunlap v. Superior Court, 142 Cal.App.4th 330 (2006) (section 226(e) statutory penalty is an individual remedy separate from PAGA)
- Price v. Starbucks Corp., 192 Cal.App.4th 1136 (2011) (discussing §226(e) injury requirement in an individual damages context)