Facing a Private Attorneys General Act (PAGA) lawsuit can be daunting, particularly for an emerging company. Yet, with strategic planning, a company can mitigate the repercussions of litigation on its ongoing operations and present a robust defense. Here are five proactive measures a company should consider upon receiving notice of an impending lawsuit:
1. Engage an Employment Attorney Immediately
As soon as you know of the lawsuit, consult an attorney specializing in employment law and class actions. Legal timelines commence once a case is initiated, and procrastination could jeopardize your defense. If you need to familiarize yourself with a suitable attorney, consider seeking referrals from reliable sources like your corporate attorney or accountant. Given the distinct nature of wage and hour litigation, especially in California, engaging an attorney well-versed in this domain is crucial.
2. Retrieve Any Arbitration Agreement and the Plaintiff's Employment Records.
If your company has an arbitration agreement, ascertain whether the plaintiff signed it and if it precludes them from initiating a class or representative action. If such an enforceable agreement exists, a motion to enforce arbitration might be among the initial steps in court. Furthermore, the plaintiff's employment records, which might be requisitioned during the lawsuit, should be handed over to your attorney promptly. This file could contain evidence of performance issues or other potential defenses against the plaintiff's claims.
3. Evaluate the Allegations for Potential Safe Harbor Provisions Under PAGA.
Collaborate with your attorney to scrutinize the lawsuit's allegations. If the plaintiff is pursuing damages under PAGA, ensure the PAGA notice is dispatched to the Labor Workforce & Development Agency (LWDA). PAGA offers employers a brief 33-day window for receiving the PAGA notice to rectify any cited violations. Successfully addressing these issues within this timeframe can prevent the plaintiff from claiming penalties under PAGA. It's imperative to consult with your attorney about potential remedies and the steps to leverage this safe harbor.
4. Compile a Roster of Employees in Roles Analogous to the Plaintiff Over the Past Four Years.
California's statute of limitations for most wage and hour class actions spans four years from the lawsuit's filing date. Employees who've held positions akin to the plaintiff's during this period will likely constitute the group the plaintiff aims to represent. Understanding the size of this group is pivotal. For instance, if the group is relatively small, it might serve as a defense against class certification.
5. Amass Employee Handbooks and Policies from the Previous Four Years.
The crux of the litigation will often hinge on the company's policies and legal compliance. Your attorney needs to assess these documents thoroughly.
