Calif. High Court OKs Discovery of Employee Contact Info Based on Filing of PAGA Suit

July 14, 2017

On July 13, 2017, the California Supreme Court handed down a decision in a long-running dispute in wage and hour litigation regarding whether employers must disclose employees’ names and contact information.

In its first opinion addressing the scope of discovery in representative actions under the California Labor Code Private Attorneys General Act (PAGA), the Supreme Court held that plaintiffs in PAGA actions may be entitled to discovery of the names and contact information of all allegedly aggrieved employees, based on nothing more than the filing of a lawsuit.

While the opinion appears to hand plaintiffs a powerful sword, the Supreme Court did not confiscate all employer shields.

PAGA is a unique statute that permits employees to sue employers for recovery of civil penalties on behalf of the state, and then keep a portion of the penalties for themselves as a “bounty” (and attorneys’ fees as an additional “bounty”). Under PAGA, employees may assert “representative” claims on behalf of other allegedly aggrieved employees, without having to meet the requirements for class certification.

Michael Williams filed such a representative action under PAGA against his former employer, Marshalls of CA LLC, a retail chain with stores throughout California. Williams had worked for Marshalls as an hourly employee in just one location in Southern California. Nevertheless, he alleged in his lawsuit that, on a companywide basis, Marshalls systematically understaffed stores and engaged in other wage and hour violations.

Shortly after filing the lawsuit, Williams requested in discovery that Marshalls disclose the name, address, telephone number and employment history of each hourly employee in California who worked for Marshalls during the relevant time period. Marshalls objected to providing this information because it extended beyond the one store in which Williams worked and beyond the particular job classification he held. Marshalls also objected because Williams had not provided proof that he actually suffered any injury. Marshalls asserted that the request invaded its current and former employees’ right to privacy under the California Constitution. Williams moved to compel responses.

The trial court ordered Marshalls to produce employee contact information for only the store in which Williams worked and only after employees had a chance to opt out of having their information produced. The trial court denied Williams’ request for broader information, but left the door open for a future request after Marshalls had a chance to depose Williams. Williams appealed, and the Court of Appeal affirmed the trial court’s decision, noting that Williams’ “proposed procedure, which contemplates jumping into extensive statewide discovery based only on the bare allegations of one local individual having no knowledge of the defendant’s statewide practices, would be a classic use of discovery tools to wage litigation rather than facilitate it.”

However, the Supreme Court sided with Williams and rejected each of Marshalls’ objections to the discovery. The Supreme Court concluded that the “default position” is that employee contact information is within the proper scope of discovery for a representative action, particularly given the public policy goals behind PAGA. Such discovery, the Supreme Court reasoned, is “routinely discoverable as an essential prerequisite to effectively seeking group relief,” without any preliminary showing of good cause, as a “first step to identifying other aggrieved employees and obtaining admissible evidence of the violations and policies alleged in the complaint.”

The court rejected the employer’s argument that PAGA plaintiffs should have to offer some proof of the merits of their claims before they are entitled to this type of discovery. With respect to privacy concerns, the court held that, while personal contact information is private, the disclosure of it in this context is not a “serious invasion of privacy.” Thus, the Supreme Court held, there is no reason to limit the disclosure of contact information if the affected individuals are first afforded an opportunity to opt out of having their information disclosed.

The California Supreme Court’s opinion is troubling for employers and ignores the practical concerns that attorneys may use employee names and contact information to solicit other potential plaintiffs and force employers into settlements based on the threat of facing dozens, hundreds or thousands of individual claims or lawsuits. But while plaintiffs’ lawyers will doubtless hail the decision as a resounding victory, it does not foreclose employers’ ability to seek to corral such discovery.

First, the Supreme Court considered only the three specific objections that Marshalls raised, and the specific record before it (including that Marshalls had not presented any evidence in support of its objection that producing the information would be an “undue burden”). Thus, employers remain free to assert other objections to such discovery, and, on a different evidentiary record, may even assert the same objections that Marshalls asserted.

Second, the court recognized that “in a particular case there may be special reason to limit or postpone a representative plaintiff’s access to contact information for those he or she seeks to represent….” Further, the court stated that if an employer resisting discovery can show “good cause,” the trial court can “establish the sequence and timing of discovery for the convenience of parties and witnesses and in the interests of justice.” The Supreme Court also noted that trial courts may issue protective orders conditioning discovery “on terms and conditions that are just,” such as requiring plaintiffs to maintain the contact information confidentially and prohibiting the use of it outside the particular case. The Supreme Court further recognized that a trial court can limit the scope of such discovery if it determines that the burden, expense or intrusiveness “clearly outweighs the likelihood that the information sought will lead to the discovery of admissible evidence.”

Thus, while employers can expect representative plaintiffs to point to Williams as entitling them to statewide discovery based on nothing more than the unsubstantiated allegations of a civil complaint, not all hope is lost. It may be more difficult to resist such discovery after Williams, but employers will still have ways to oppose it, depending on the circumstances of their individual cases.