A US appeals court has reinstated a claim Walmart should have paid employees at a fulfillment facility in California for time spent undergoing security checks after they had clocked off.
A unanimous three-judge panel of the 9th US Circuit Court of Appeals ruled that a federal judge made a mistake in their ruling over a claim in a wider 2017 case that was was filed by two Walmart employees at Chino, California.
The court declared judges can impose a manageability requirement in class action cases, but not in claims brought under California’s unique Private Attorneys General Act (PAGA) because the two cases are fundamentally different.
The complaint was launched in California state court as a proposed class action, and the plaintiffs added different PAGA claims when Walmart shifted the matter to a federal court in Riverside, California.
PAGA empowers employees to sue companies on behalf of the state for wage-law infractions and keep 25% of any penalties they win.
PAGA plaintiffs, like the state, can sue firms on behalf of huge groups of workers.
In a second decision in the same case on Thursday, June 30, the 9th Circuit affirmed a $6 million jury judgment against Walmart on a class-action allegation that warehouse workers were denied complete 30-minute meal breaks.
Walmart’s contention that the PAGA claims should be dismissed because the plaintiffs did not seek class certification was rejected by US District Judge Andre Birotte in 2019.
However, he agreed with Walmart that the PAGA claim concerning security checks was unworkable since it would need to determine how long individual workers waited to depart the facility.
The plaintiffs argue workers were often required to wait 15 to 20 minutes to be examined.
The meal break lawsuit was tried, and a jury awarded the plaintiffs $6 million in 2019 for almost 450,000 individual infractions.
Both parties filed appeals, with the plaintiffs stating that because PAGA claims are separate from class actions, Birotte was incorrect to apply class action manageability standards to the security check claim.
The 9th Circuit approved, stating manageability standards are imposed in class actions to guarantee that damages are paid fairly to class members.
However, because PAGA litigants seek civil fines rather than damages, the court ruled that this approach does not apply.
In addition, the panel agreed with Birotte that plaintiffs in PAGA lawsuits are not required to seek class certification.
The US Supreme Court made that appeared earlier this month in Viking River Cruises Inc v. Moriana, according to the 9th Circuit.
The court in that decision said that PAGA claims can be pushed into individual arbitration, but as the 9th Circuit acknowledged, there are some fundamental differences between PAGA cases and class action litigation.