Preview
CIVIL LAW AND MOTION CALENDAR
January 11, 2022 '—
fl L E D
10am "’55"mnvfls‘fiw: Rh§3§§"‘
JAN 1 1 2022
VICTORIA TICE v. TRADER J OE'S COMPANY # 20CV00892 'm'
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ATTORNEYS
Larry W. Lee / Max W. Gavron of Diversity Law Group, P.C. and William L.
Marder of Polaris Law Group for plaintiff
Helene Wasserman / Shannon R. Boyce / Melissa Velez of Littler Mendelson, P.C.
for Trader J oe’s Company
Emails: mgavron@diversiglaw.com; lwlee@diversiglaw.com;
bill@polarislawgroup.com; hwasserman@littler.com; sboxce@littler.com
HEARING
Defendant's motion to strike PAGA claims
RULING
For the reasons articulated below, the Court will deny the motion to strike at
this time.
Background
In September, 2021, this Court denied plaintiff‘s motion for class certification,
related to her claim that her former employer, Trader Joe's Company, had violated
Labor Code sections 201-203 in issuing she and members of the putative class their
final wages via a paycard, the use of which could—but would not necessarily—
cause the user to incur fees, without obtaining their written authorization. The
Court will not reiterate its understanding of the facts, arguments, evidence, or its
analysis of the certification motion, but its general understanding of the case and
the issues which were resolved therein have informed its analysis of the current
matter.
While the resolution of that motion eliminated the class status for plaintiff‘s claims
within her first cause of action, the second cause of action of her complaint also
alleged similar representative claims, brought pursuant to the Private Attorneys
General Act of 2004 (PAGA). The claim seeks penalties on behalf of all aggrieved
employees from February 10, 2019 through the present for defendants' violations
of Sections 201-203, 212, and 213.
Motion
Trader Joe's has now moved to strike plaintiff‘s PAGA claims, on the ground that
they are unmanageable, citing as authority for the trial court's discretion to do so
the case of Wesson v. Staples the Officer Superstore, LLC (2021) 68 Cal.App.5th
746, a California appellate case of first impression on the issue, as well as a string
of federal district court cases and unpublished superior court orders.
The motion argues that the representative PAGA claim is unmanageable for the
same reasons recognized in the order denying class certification. Trader Joe's
contends that its final wages paycard policy is lawful and complies with the
requirements of the Labor Code sections 212 and 213, as well as the DSLE
Opinion letters. The Court noted in denying class certification that the policy
appeared to be compliant with Califomialaw, other than possibly the consent
requirement. Trader Joe‘s therefore contends that the PAGA claim turns solely on
two discrete issues, neither of which it believes is manageable at trial on a
representative basis, and which Trader J oe's contends can only be resolved on a
person-by-person basis, i.e., (l) whether allegedly aggrieved employees consented
to receive their final pay on a paycard, and (2) whether allegedly aggrieved
employees incurred any fees as a result of receiving their final pay on a paycard.
Trader Joe's contends that there is nothing which required them to obtain written
consent, and the fact that they do not have written consent for 328 former
employees does not mean they have not consented; there are known circumstances
of consent where no form exists. Establishing consent would require individual
investigation of each such former employee
Trader J oe's contends fin‘ther that, to the extent any crew member incurred fees in
connection with the use of a paycard, that inquiry would be entirely individualized
in nature. Fees could be both incurred or avoided, with or without the existence of
consent. It argues that plaintiff cannot present any evidence that any former
employee incurred fees in their use of the paycard as a result of Trader Joe's failure
to obtain their consent to receipt of the paycard for final wages. Further, to the
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extent that they incurred fees at all, their reasons for doing so could vary widely,
and there is no way to demonstrate through common proof that fees were incurred
as a result of the lack of written consent for receipt of final wages via paycard, or
that there is any connection between the allegedly unlawfiil policy and the
incurring of fees by any person, including plaintiff
Finally, Trader Joe's argues that the PAGA claims must be stricken because trial on
a representative basis would violate its right to due process. While a PAGA claim
is not subject to class certification obligations, plaintiff must still demonstrate that
she has a viable trial plan which is consistent with Trader Joe's right to due
process, and her inability to do so warrants striking the PAGA claim in its entirety.
It notes that plaintiff has no common proof of any violation applicable to the
collective group, and individualized inquiries are necessary to determine any
liability. Trader Joe's contends that, at a minimum, its due process right includes
the right to cross-examine every person for whom penalties are sought and to
present evidence to challenge individual claims. It argues that plaintiff failed in her
certification motion to establish any way in which the existence of damage may be
determined by common proof and cannot do so here. Damages cannot be
determined simply by examining records to determine whether any aggrieved crew
member incurred fees in the use of their paycard, because the reasons for incurring
fees vary.
Opposition
Plaintiff has opposed the motion. Afier setting forth the legal background, and the
factual and procedural history of the dispute, plaintiff argues that a PAGA claim
does not require certification and does not independently impose a manageability
requirement. Plaintiff relies upon Arias v. Superior Court (2009) 46 Cal.4th 969,
976, in which the California Supreme Court held that PAGA claims need not meet
certification requirements, contending that if that court intended to impose an
affirmative manageability requirement on PAGA actions, it would have done so
given how it framed the issue in Arias. She also relies on a number of federal cases
which also held certification standards are not required, and there is no statutory
requirement of manageability. In other cases, finding manageability was required,
the cases were much more complex. Here there are only 348 aggrieved employees,
and their claims stem from one central nucleus.
Plaintiff contends that Wesson is easily distinguishable, given the requirement in
that case involving alleged misclassification of general managers as exempt
employees, that Staples be allowed to conduct individualized assessments of each
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manager in pursuing its affirmative defense, requiring that each manager testify in
detail regarding his or her experiences and workday on a week-by—week basis, in a
trial that would take eight years to complete. The plaintiff in that case made no
attempt to cooperate with the trial court's attempt to determine whether other
methods could have been used to manage the trial.
Here, individual inquiries would not be required, and plaintiff contends that she
has provided a plan for handling trial that is far different than that in Wesson and
would not require years of trial. The only issues to be addressed are (1) whether
allegedly aggrieved employees consented to receive their final pay on a paycard,
and (2) whether they incurred any fees as a result of receiving their final pay on a
paycard.
With respect to the issue of consent, plaintiff asserts that the Labor Code requires
defendant to have received authorization from the employees in order to distribute
wages to them in the form of a paycard. While it was defendant's policy to have
written consent, directing that it be signed and scanned to payroll, Trader J oe's
does not possess written consent for 348 individuals employed during the PAGA
period. Trader Joe's exemplar communications regarding the instructions for
handling the consent forms allows the issue of consent to be presented
manageably, particularly since employers are required by law to maintain records
related to employment. (See, e.g., Labor Code §§ 226, 432, 1174, 1198.5.) Section
432 requires employers to provide a copy of any signed instrument related to the
obtaining or holding of employment. 1t should not be permitted to rely upon its
faulty record-keeping practices to contend that the consent-based PAGA claim is
untenable. In Solis v. Regis Corp. (ND. Cal. 2007) 612 F.Supp.2d 1085, the court
found that a PAGA claim regarding violation of Labor Code section 212 could be
maintained regardless of whether a class member was injured by the violation.
With respect to fees, plaintiff notes that defendant's argument largely duplicated its
opposition to the certification motion, even retaining references to the "putative
class," but the same standards do not apply to PAGA claims. Plaintiff has
requested that defendant produce the routing and account numbers of the paycards
issued to the 348 aggrieved employees, which will allow plaintiff to subpoena
ledgers directly from COMDATA detailing any fees incurred by these employees.
Defendant has refused to produce the information, which plaintiff needs to support
its manageability arguments. Trader Joe's argues that the records will not answer
the question of why fees were incurred, but plaintiff contends that the "why" is
irrelevant, because defendant has an obligation to provide final wages to
employees without incurring fees. Plaintiff contends that she will retain an expert
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to perform sampling to determine which employees incurred fees as a result of
defendant's illegal practices. Further, the employees need not have incurred fees in
order to find defendant liable, and penalties can be imposed even if the court
accepts defendant's argument regarding fees.
Finally, plaintiff argues, in the alternative, that the Court continue the hearing on
the motion to allow it to first resolve the parties' discovery dispute.
Reply
In its reply, Trader J oe‘s asserts that Wesson establishes the court's authority to
strike an unmanageable representative PAGA claim. It notes that Arias does not
stand for the proposition that courts should abdicate their equitable responsibility
to manage representative actions. It further notes that in several of the cases it had
cited in its motion, the courts noted that although plaintiff did not need to satisfy
specific class certification requirements in order to proceed with PAGA
representative claims, the factual findings the courts made during certification
made clear that PAGA representative actions were unmanageable and must be
stricken. This is what it contends in this motion—that the court's certification
ruling is instructive, since the issues which prevented certification also render the
matter unsuitable for trial on a representative basis. It contends that any trial would
require every allegedly aggrieved employee to be called as a witness to determine
whether they consented to receipt of the paycard and, if they did, whether and why
they incurred fees.
Trader J oes contends that plaintiffs opposition mischaracterized both California
legal requirements and the structure of Trader Joe's pay card program. First, the
final wages paycard program issued all wages owed, without discount, as the Court
recognized that there are numerous ways to use the paycard without incurring fees.
The DSLE opinion letters interpreting Labor Code section 212(a), which require
the method of payment to be negotiable and payable in cash, on demand, without
discount, establish that employers may use paycards where (the wages are payable
at some established place of business in the state, and there must be at least 30 days
of sufficient funds for payment, (2) the employees are fiJlIy informed of the service
and procedures and that their participation is optional, (3) the employees received
an itemized wages statement, and (4) at least one transaction per pay period is
without fee. Trader J oe's asserts that the Court already found that its program
complied with the requirements, and plaintiff admitted as much in her deposition.
Plaintiff ignored this, referring to the alleged "host of fees" applicable to the
paycards, which mischaracterize the evidence and are irrelevant.
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Further, Trader Joe's asserts that its paycard program is voluntary, and argues that
plaintiff‘s assertions to the contrary are unsupported and mischaracterize the
evidence. Plaintiff argues that the paycard program is not voluntary because Trader
Joe's is unable to locate a written consent form for certain former employees. It
argues that plaintiff conflates the notion of the "default" practice with a
"mandatory" practice; while paycard payment was a default, the program was
always voluntary, and some crew members have always exercised the option to
request checks in lieu of paycards. Trader Joe's argues that nothing in Sections 212
or 213, or the DLSE Opinion Letters, require that consent be in writing. It
concludes that written consent is not required, and there may be many reasons why
Trader Joe's is unable to produce a signed consent form, and the lack of a form
does not mean there was no consent. Trader Joe's asserts that plaintiff‘s reliance on
its communications sent from the payroll department is misplaced and misstates
the evidence. The communications are not necessarily reflective of what was
communicated between an individual manager and separating crew member. While
payroll always provided information on how the forms were to be completed, and
expected use of a written consent form, it did not explicitly instruct store
management to require a signature on the form before a departing employee could
take the paycard, prior to February 2020. While it may have been a best practice,
Trader Joe's argues that its objective was always to ensure departing employees
were paid timely and appropriately. As a result, individual testimony about the
communications would be required. Trader Joe's diSputes that Solis or Lopez, relied
on by plaintiff, are applicable, since both involved undisputed underlying Labor
Code violations, which Trader Joe's contends does not exist here.
Finally, Trader Joe's argues that any reliance by plaintiff upon sampling at trial
would deprive it of its due process rights. lt argues that both Wal—Mart Stores, Inc.
v. Dukes (2011) 131 S.Ct. 2541, 2560-2561, and Duran v. U.S. Bank National
Association (2014) 59 Cal.4th 1, disapproved of using representative testimony to
generalize on behalf of a class, and found that the employer had a due process right
to individualized determinations of each employee's eligibility for liability.
Plaintiff contends that sampling can be used to determine which crew members
incurred fees, but under Duran there must be some glue that binds class members
together apart from statistical evidence, and that is missing here. Duran found that
sampling might be permissible at trial where trial involved only damages and not
liability, but noted that a defense in which liability itself is predicated on factual
questions specific to individual claimants poses a much greater challenge to
manageability, and that the distinction was important. Here, Trader Joe's argues
that there is a question of liability, in proof of consent, which it contends can only
be determined on an individualized basis.
Even setting aside the issue of consent, Trader Joe's contends that the suggestion of
sampling does not address why fees were incurred, which could be for reasons
unrelated to any Labor Code violation. It argues that plaintiff's suggestion that the
question of why fees were incurred is somehow irrelevant, is misplaced. It
contends that even if PAGA penalties can be awarded where no actual fees have
been incurred, the question of why fees may have been incurred is critical to any
award of penalties, and multiple affirmative defenses in the matter, pointing to
(without explaining) defenses 30, 31, and 34. As a matter of due process, it
contends it must be able to present individualized evidence at trial on the question
of why any fees were incurred, which would require the testimony of hundreds of
witnesses "and is entirely unmanageable."
ANALYSIS
For the reasons articulated herein, the Court will deny the motion to strike the
PAGA claims. Under the facts and evidence currently before the Court, it is not
convinced that there is no possible way to render the PAGA claims manageable,
either by adopting a feasible trial plan or by limiting the scope of the PAGA claim.
1.Pursuant to binding authority, the Court has discretion to dismiss PAGA claims
if it determines they are unmanageable.
The Second District Court of Appeal, in Wesson v. Staples The Office Superstore,
LLC (2021) 68 Cal.App.5th 746 (rev. den., 12/22/2021), determined as an issue of
first impression that trial courts have inherent authority to ensure manageability of
PAGA claims at trial, and to strike unmanageable claims. The motion currently
before the Court was filed pursuant to this authority, as well as pursuant to a
number of federal district court and state trial court decisions.
Plaintiff‘s opposition to the motion presents substantial arguments in support of her
contention that there is no manageability requirement for PAGA cases, and the
Court has no authority to strike her PAGA claims on that basis. (See Opposition at
pp. 16-19.)
"Under the doctrine of stare decisis, all tribunals exercising inferior jurisdiction are
required to follow decisions of courts exercising superiorjurisdiction. Otherwise,
the doctrine of stare decisis makes no sense. The decisions of this court are binding
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upon and must be followed by all the state courts of California. Decisions of every
division of the District Courts of Appeal are binding upon all thejustice and
municipal courts and upon all the superior courts of this state, and this is so
whether or not the superior court is acting as a trial or appellate court. Courts
exercising inferiorjurisdiction must accept the law declared by courts of superior
jurisdiction. It is not their function to attempt to overrule decisions of a higher
court." (Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450, 455.)
While there may exist grounds to quibble with the Wesson court's ruling for
various policy or other reasons, this Court has neither the ability nor the authority
to find, contrary to the holding in Wesson, supra, that trial courts do not have any
authority to strike even unmanageable PAGA claims.
The critical question for the Court here, however, is not whether it possesses the
discretion to strike the PAGA claims, but whether it is apprOpriate under the
circumstances for it to exercise that discretion. That is where the issue becomes
quite a bit more complex.
2. Standards articulated in Wesson governing when it would be appropriate to
strike PAGA claims for unmanageability
While the Wesson case stands for the proposition that this Court has the discretion
and authority to strike unmanageable PAGA claims, it was far more clear in
Wesson than itis here, that the exercise of that discretion was appropriate. The
plaintiff in Wesson was a general manager (GM) of a Staples office supply store,
and brought an action alleging both class claims and representative PAGA claims
on his own behalf and on behalf of 345 other current and former Staples GMs, both
premised on the theory that Staples had misclassified its GMs as exempt
executives, thereby depriving them of overtime pay and off duty meal and rest
periods.
Plaintiff‘s motion to certify the class was denied by the trial court, because
important factual questions existed relating to whether GMs spent most of their
worktime doing exempt, managerial tasks, which could not be resolved on a class-
wide basis, given the variation in how they performed their jobs, and the extent to
which they performed non-managerial tasks.
Staples moved to strike the PAGA claim—which sought almost $36 million in
civil penalties for the same alleged Labor Code violations—arguing that given the
number of employees it covered and the nature of the allegations, the action would
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be unmanageable and would violate its due process rights. It argued that its
intended affirmative defense—that it pr0perly classified its GMS as exempt and
committed no Labor Code violations—would require individualized proof as to
each GM, and the claim could not be fairly and efficiently litigated. Indeed, the
determination of the propriety of the classification would involve a heavily fact-
based inquiry to determine whether the employee is primarily engaged in exempt
duties. The primary consideration in that determination is the work actually
performed by the employee during the course of the workweek, as well as the
employer's realistic expectations and the realistic requirements of the job.
The trial court held a series of hearings on the issue, inviting supplemental
evidence and briefing from the parties. At one hearing, the parties bo_th estimated
that they would need a total of six trial days per GM to litigate GMs‘ classification
as exempt executives on an individual basis. Based on that estimate, the trial would
have lasted eight years. The trial court granted the motion to strike the PAGA
claims, finding them unmanageable. It noted that there was no evidence that
Staples' defense could be litigated through common proof, and even cutting trial
estimates in half would have resulted in a trial spanning four years and involving
witnesses and documents pertaining to each of the 346 individual GMS.
The Wesson court affirmed the trial court's order, finding that, under the
circumstances present in the case, it had not abused its discretion in striking the
PAGA claim on the ground that it was unmanageable. (Ibid, at p. 863.) It noted
that manageability, in the context of PAGA, requires that individual issues can be
tried fairly and efficiently. (lbid.) It found that this assessment will depend on the
circumstances of the case, and that no rigid rule can govern the assessment, but
that, in general, a need for individualized proof pertaining to a very large number
of employees will raise management concerns. (Ibid) In considering manageability
issues, courts should account for a defendant's affirmative defense, and while trial
courts enjoy great latitude in structuring trials, a trial management plan must allow
the defendant a fair Opportunity to present a defense. (Ibid.) A defendant's ability to
present its defense in a fair manner must be preserved. (ld., at p. 864.)
The Wesson court made clear, however, that even a finding that a claim is
unmanageable as presented will not always result in the striking of a claim, and
encouraged judges encountering such claims to leverage their experience with and
flexibility in engineering solutions to difficult problems of case management and,
if possible, work with the parties to render a PAGA claim manageable by adopting
a feasible trial plan or limiting the claim's scope. (Ibid.)
3. Application to the current case.
The current case involves 348 allegedly aggrieved employees, within the PAGA
period, who received their final wages on a paycard, and for whom Trader Joe's
does not possess a signed consent form.
As noted above, Trader J oe's contends that plaintiff‘s PAGA claim is
unmanageable, and should be stricken. Specifically, it contends that its final wages
paycard policy is lawful and in compliance with Labor Code sections 212 and 212,
as well as the DSLE Opinion Letters. It contends that its liability can only be
resolved on a person-by-person basis, by inquiring whether the employee
consented to receive final pay on a paycard and whether they incurred fees as a
result of receiving final pay on a paycard.
Trader J oe's Specifically contends that this Court has found its paycard policy
lawful. That is not entirely accurate, and such a finding could not have been made
in the course of a certification motion. Rather, in denying the certification motion,
the Court simply made the observation that, "other than possibly the consent
requirement, the policy appears to have been wholly compliant with California
law." It further noted that "It is true that whether the claimed unlawful policy
(payment of final wages via paycard without consent) was in fact compliant with
California law may well be a matter of common proof in this action."
While the Court will not belabor the analysis it set forth more fully in its resolution
of the certification motion, it notes that the DSLE Opinion Letters relied on by the
parties at the certification stage analyzed paycard programs in order to determine
whether they complied with the pay requirements of Labor Code sections 212
(requiring that a means of pay be negotiable and payable in cash, on demand,
without discount) and 213 (permitting deposit of wages due in any bank, savings
and loan association, or credit union of the employee's choice with a place of
business located in the state, provided that the employee has voluntarily authorized
that deposit).
Specifically, Opinion Letter 2008.07.07 noted that strong public policy prohibited
employers from imposing conditions or obstacles which interfere with or prevent
an employee from promptly receiving their wages in full, and the imposition of a
fee in order to readily access earned wages could interfere with that obligation. It
found that if a paycard program provided for at least one transaction per pay period
without fee, it would effectively provide for immediate and free access to an
employee's wages in full, and that the existence of other options which might
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impose a fee would not invalidate the program under Section 212. It emphasized,
however, that the effectiveness of the programs would require that employees be
fully informed of the services and procedures, and that they be represented as an
alternative method for wage payment, for which their participation was optional.
Opinion Letter 2008.07.07-2, engaged in a similar analysis, and found a paycard
policy not prohibited by Section 213, as long as it otherwise complied with Section
212, findingsignificant that employee participation was not mandatory, and was
iust an alternative for employees to receive their wage payments.
A. Proof regarding consent.
Trader Joe's specifically contends that there is no possible way to manage the
consent issue on a representative basis. 1n doing so, it argues that there is no
requirement that the required consent be in writing, and that, as a result, where it
does not possess any written consent form for an employee, that does not mean the
employee did not consent to receiving their final wages on a paycard, and that the
only way to determine consent is to conduct individual investigations of each
employee to determine whether they consented to receipt of the paycard.
In making the argument, Trader Joe's ignores several facts. Not only was it Trader
Joe's default policy to always provide final wages to departing employees via a
paycard unless they specifically requested another form of payment—making the
existence of provable consent important to the legality of its paycard policy—but it
has always had a policy of requiring that written consent be obtained from
employees who were provided final wages on a paycard. Its instructions to its
managers expressly directed that the consent form should be signed by the
departing crew member and scanned to payroll, with a COpy given to the crew
member. Indeed, when this Court was evaluating the certification motion, Trader
Joe's made a point to emphasize that while there were in excess of 900 employees
(for the class period) for whom it did not have written consent forms for their
payment of final wages via paycard, that was nothing compared to the more than
12,000 written consent forms it had in its records for departing employees who had
received their final wages via paycard.
Trader Joe's argument that it never, prior to February 2020, explicitly instructed its
managers that they should not permit a departing employee to take the paycard
containing their final wages unless the employee had first provided the manager
with a signed consent form, really does not help its position. Rather, itmore
underscores Trader J oe's negligence in failing to enforce the policies and
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procedures it already had, which were critical to its ability to establish the legality
of its final wages paycard program.
In order to support Trader Joe's interpretation of the consent requirements, the
Court would have to find as a matter of law that the consent required in order to
render the paycard policy compliant with Labor Code sections 212 and 213 need
not be in writing. However, given the facts that (a) the paycard policy is n_ot legally
compliant with law unless it is voluntary and an employee has consented to receipt
of such wages via paycard, (b) it was Trader Joe's default policy unless a departing
employee affirmatively requested another form of payment, (c) it was Trader Joe's
policy to instruct managers to obtain signed consent forms from employees to
whom paycards were given, and (d) given the various requirements that employers
maintain employee personnel files and be able to provide an employee a copy of
any instrument the employee has signed, the Court cannot make any such finding.
Indeed, it appears that the only reason that Trader Joe's is not currently in
possession of written consent forms for 348 former employees during the PAGA
period is because it failed to follow its own policy to obtain written consent. To
conclude that plaintiff cannot establish a lack of consent by showing a lack of a
signed consent form, because Trader Joe's itself negligently failed to follow its own
policy to obtain a signed consent form, would be illogical, inequitable, and utterly
unjustifiable. Trader Joe's was at all times in control of both its own policies, and
its enforcement of those policies. Simply being lax about enforcement does not
provide justification for a contention that there can be no common or manageable
proof of lack of consent, when responsibility for the failure to possess such written
consent falls squarely and solely upon Trader Joe's itself.
The Court
Preview
CIVIL LAW AND MOTION CALENDAR January 11, 2022 '— fl L E D 10am "’55"mnvfls‘fiw: Rh§3§§"‘ JAN 1 1 2022 VICTORIA TICE v. TRADER J OE'S COMPANY # 20CV00892 'm' .Y 5- “mm °‘"°°' Pgm°"% ca. eputy la ATTORNEYS Larry W. Lee / Max W. Gavron of Diversity Law Group, P.C. and William L. Marder of Polaris Law Group for plaintiff Helene Wasserman / Shannon R. Boyce / Melissa Velez of Littler Mendelson, P.C. for Trader J oe’s Company Emails: mgavron@diversiglaw.com; lwlee@diversiglaw.com; bill@polarislawgroup.com; hwasserman@littler.com; sboxce@littler.com HEARING Defendant's motion to strike PAGA claims RULING For the reasons articulated below, the Court will deny the motion to strike at this time. Background In September, 2021, this Court denied plaintiff‘s motion for class certification, related to her claim that her former employer, Trader Joe's Company, had violated Labor Code sections 201-203 in issuing she and members of the putative class their final wages via a paycard, the use of which could—but would not necessarily— cause the user to incur fees, without obtaining their written authorization. The Court will not reiterate its understanding of the facts, arguments, evidence, or its analysis of the certification motion, but its general understanding of the case and the issues which were resolved therein have informed its analysis of the current matter. While the resolution of that motion eliminated the class status for plaintiff‘s claims within her first cause of action, the second cause of action of her complaint also alleged similar representative claims, brought pursuant to the Private Attorneys General Act of 2004 (PAGA). The claim seeks penalties on behalf of all aggrieved employees from February 10, 2019 through the present for defendants' violations of Sections 201-203, 212, and 213. Motion Trader Joe's has now moved to strike plaintiff‘s PAGA claims, on the ground that they are unmanageable, citing as authority for the trial court's discretion to do so the case of Wesson v. Staples the Officer Superstore, LLC (2021) 68 Cal.App.5th 746, a California appellate case of first impression on the issue, as well as a string of federal district court cases and unpublished superior court orders. The motion argues that the representative PAGA claim is unmanageable for the same reasons recognized in the order denying class certification. Trader Joe's contends that its final wages paycard policy is lawful and complies with the requirements of the Labor Code sections 212 and 213, as well as the DSLE Opinion letters. The Court noted in denying class certification that the policy appeared to be compliant with Califomialaw, other than possibly the consent requirement. Trader Joe‘s therefore contends that the PAGA claim turns solely on two discrete issues, neither of which it believes is manageable at trial on a representative basis, and which Trader J oe's contends can only be resolved on a person-by-person basis, i.e., (l) whether allegedly aggrieved employees consented to receive their final pay on a paycard, and (2) whether allegedly aggrieved employees incurred any fees as a result of receiving their final pay on a paycard. Trader Joe's contends that there is nothing which required them to obtain written consent, and the fact that they do not have written consent for 328 former employees does not mean they have not consented; there are known circumstances of consent where no form exists. Establishing consent would require individual investigation of each such former employee Trader J oe's contends fin‘ther that, to the extent any crew member incurred fees in connection with the use of a paycard, that inquiry would be entirely individualized in nature. Fees could be both incurred or avoided, with or without the existence of consent. It argues that plaintiff cannot present any evidence that any former employee incurred fees in their use of the paycard as a result of Trader Joe's failure to obtain their consent to receipt of the paycard for final wages. Further, to the 2 extent that they incurred fees at all, their reasons for doing so could vary widely, and there is no way to demonstrate through common proof that fees were incurred as a result of the lack of written consent for receipt of final wages via paycard, or that there is any connection between the allegedly unlawfiil policy and the incurring of fees by any person, including plaintiff Finally, Trader Joe's argues that the PAGA claims must be stricken because trial on a representative basis would violate its right to due process. While a PAGA claim is not subject to class certification obligations, plaintiff must still demonstrate that she has a viable trial plan which is consistent with Trader Joe's right to due process, and her inability to do so warrants striking the PAGA claim in its entirety. It notes that plaintiff has no common proof of any violation applicable to the collective group, and individualized inquiries are necessary to determine any liability. Trader Joe's contends that, at a minimum, its due process right includes the right to cross-examine every person for whom penalties are sought and to present evidence to challenge individual claims. It argues that plaintiff failed in her certification motion to establish any way in which the existence of damage may be determined by common proof and cannot do so here. Damages cannot be determined simply by examining records to determine whether any aggrieved crew member incurred fees in the use of their paycard, because the reasons for incurring fees vary. Opposition Plaintiff has opposed the motion. Afier setting forth the legal background, and the factual and procedural history of the dispute, plaintiff argues that a PAGA claim does not require certification and does not independently impose a manageability requirement. Plaintiff relies upon Arias v. Superior Court (2009) 46 Cal.4th 969, 976, in which the California Supreme Court held that PAGA claims need not meet certification requirements, contending that if that court intended to impose an affirmative manageability requirement on PAGA actions, it would have done so given how it framed the issue in Arias. She also relies on a number of federal cases which also held certification standards are not required, and there is no statutory requirement of manageability. In other cases, finding manageability was required, the cases were much more complex. Here there are only 348 aggrieved employees, and their claims stem from one central nucleus. Plaintiff contends that Wesson is easily distinguishable, given the requirement in that case involving alleged misclassification of general managers as exempt employees, that Staples be allowed to conduct individualized assessments of each 3 manager in pursuing its affirmative defense, requiring that each manager testify in detail regarding his or her experiences and workday on a week-by—week basis, in a trial that would take eight years to complete. The plaintiff in that case made no attempt to cooperate with the trial court's attempt to determine whether other methods could have been used to manage the trial. Here, individual inquiries would not be required, and plaintiff contends that she has provided a plan for handling trial that is far different than that in Wesson and would not require years of trial. The only issues to be addressed are (1) whether allegedly aggrieved employees consented to receive their final pay on a paycard, and (2) whether they incurred any fees as a result of receiving their final pay on a paycard. With respect to the issue of consent, plaintiff asserts that the Labor Code requires defendant to have received authorization from the employees in order to distribute wages to them in the form of a paycard. While it was defendant's policy to have written consent, directing that it be signed and scanned to payroll, Trader J oe's does not possess written consent for 348 individuals employed during the PAGA period. Trader Joe's exemplar communications regarding the instructions for handling the consent forms allows the issue of consent to be presented manageably, particularly since employers are required by law to maintain records related to employment. (See, e.g., Labor Code §§ 226, 432, 1174, 1198.5.) Section 432 requires employers to provide a copy of any signed instrument related to the obtaining or holding of employment. 1t should not be permitted to rely upon its faulty record-keeping practices to contend that the consent-based PAGA claim is untenable. In Solis v. Regis Corp. (ND. Cal. 2007) 612 F.Supp.2d 1085, the court found that a PAGA claim regarding violation of Labor Code section 212 could be maintained regardless of whether a class member was injured by the violation. With respect to fees, plaintiff notes that defendant's argument largely duplicated its opposition to the certification motion, even retaining references to the "putative class," but the same standards do not apply to PAGA claims. Plaintiff has requested that defendant produce the routing and account numbers of the paycards issued to the 348 aggrieved employees, which will allow plaintiff to subpoena ledgers directly from COMDATA detailing any fees incurred by these employees. Defendant has refused to produce the information, which plaintiff needs to support its manageability arguments. Trader Joe's argues that the records will not answer the question of why fees were incurred, but plaintiff contends that the "why" is irrelevant, because defendant has an obligation to provide final wages to employees without incurring fees. Plaintiff contends that she will retain an expert 4 to perform sampling to determine which employees incurred fees as a result of defendant's illegal practices. Further, the employees need not have incurred fees in order to find defendant liable, and penalties can be imposed even if the court accepts defendant's argument regarding fees. Finally, plaintiff argues, in the alternative, that the Court continue the hearing on the motion to allow it to first resolve the parties' discovery dispute. Reply In its reply, Trader J oe‘s asserts that Wesson establishes the court's authority to strike an unmanageable representative PAGA claim. It notes that Arias does not stand for the proposition that courts should abdicate their equitable responsibility to manage representative actions. It further notes that in several of the cases it had cited in its motion, the courts noted that although plaintiff did not need to satisfy specific class certification requirements in order to proceed with PAGA representative claims, the factual findings the courts made during certification made clear that PAGA representative actions were unmanageable and must be stricken. This is what it contends in this motion—that the court's certification ruling is instructive, since the issues which prevented certification also render the matter unsuitable for trial on a representative basis. It contends that any trial would require every allegedly aggrieved employee to be called as a witness to determine whether they consented to receipt of the paycard and, if they did, whether and why they incurred fees. Trader J oes contends that plaintiffs opposition mischaracterized both California legal requirements and the structure of Trader Joe's pay card program. First, the final wages paycard program issued all wages owed, without discount, as the Court recognized that there are numerous ways to use the paycard without incurring fees. The DSLE opinion letters interpreting Labor Code section 212(a), which require the method of payment to be negotiable and payable in cash, on demand, without discount, establish that employers may use paycards where (the wages are payable at some established place of business in the state, and there must be at least 30 days of sufficient funds for payment, (2) the employees are fiJlIy informed of the service and procedures and that their participation is optional, (3) the employees received an itemized wages statement, and (4) at least one transaction per pay period is without fee. Trader J oe's asserts that the Court already found that its program complied with the requirements, and plaintiff admitted as much in her deposition. Plaintiff ignored this, referring to the alleged "host of fees" applicable to the paycards, which mischaracterize the evidence and are irrelevant. 5 Further, Trader Joe's asserts that its paycard program is voluntary, and argues that plaintiff‘s assertions to the contrary are unsupported and mischaracterize the evidence. Plaintiff argues that the paycard program is not voluntary because Trader Joe's is unable to locate a written consent form for certain former employees. It argues that plaintiff conflates the notion of the "default" practice with a "mandatory" practice; while paycard payment was a default, the program was always voluntary, and some crew members have always exercised the option to request checks in lieu of paycards. Trader Joe's argues that nothing in Sections 212 or 213, or the DLSE Opinion Letters, require that consent be in writing. It concludes that written consent is not required, and there may be many reasons why Trader Joe's is unable to produce a signed consent form, and the lack of a form does not mean there was no consent. Trader Joe's asserts that plaintiff‘s reliance on its communications sent from the payroll department is misplaced and misstates the evidence. The communications are not necessarily reflective of what was communicated between an individual manager and separating crew member. While payroll always provided information on how the forms were to be completed, and expected use of a written consent form, it did not explicitly instruct store management to require a signature on the form before a departing employee could take the paycard, prior to February 2020. While it may have been a best practice, Trader Joe's argues that its objective was always to ensure departing employees were paid timely and appropriately. As a result, individual testimony about the communications would be required. Trader Joe's diSputes that Solis or Lopez, relied on by plaintiff, are applicable, since both involved undisputed underlying Labor Code violations, which Trader Joe's contends does not exist here. Finally, Trader Joe's argues that any reliance by plaintiff upon sampling at trial would deprive it of its due process rights. lt argues that both Wal—Mart Stores, Inc. v. Dukes (2011) 131 S.Ct. 2541, 2560-2561, and Duran v. U.S. Bank National Association (2014) 59 Cal.4th 1, disapproved of using representative testimony to generalize on behalf of a class, and found that the employer had a due process right to individualized determinations of each employee's eligibility for liability. Plaintiff contends that sampling can be used to determine which crew members incurred fees, but under Duran there must be some glue that binds class members together apart from statistical evidence, and that is missing here. Duran found that sampling might be permissible at trial where trial involved only damages and not liability, but noted that a defense in which liability itself is predicated on factual questions specific to individual claimants poses a much greater challenge to manageability, and that the distinction was important. Here, Trader Joe's argues that there is a question of liability, in proof of consent, which it contends can only be determined on an individualized basis. Even setting aside the issue of consent, Trader Joe's contends that the suggestion of sampling does not address why fees were incurred, which could be for reasons unrelated to any Labor Code violation. It argues that plaintiff's suggestion that the question of why fees were incurred is somehow irrelevant, is misplaced. It contends that even if PAGA penalties can be awarded where no actual fees have been incurred, the question of why fees may have been incurred is critical to any award of penalties, and multiple affirmative defenses in the matter, pointing to (without explaining) defenses 30, 31, and 34. As a matter of due process, it contends it must be able to present individualized evidence at trial on the question of why any fees were incurred, which would require the testimony of hundreds of witnesses "and is entirely unmanageable." ANALYSIS For the reasons articulated herein, the Court will deny the motion to strike the PAGA claims. Under the facts and evidence currently before the Court, it is not convinced that there is no possible way to render the PAGA claims manageable, either by adopting a feasible trial plan or by limiting the scope of the PAGA claim. 1.Pursuant to binding authority, the Court has discretion to dismiss PAGA claims if it determines they are unmanageable. The Second District Court of Appeal, in Wesson v. Staples The Office Superstore, LLC (2021) 68 Cal.App.5th 746 (rev. den., 12/22/2021), determined as an issue of first impression that trial courts have inherent authority to ensure manageability of PAGA claims at trial, and to strike unmanageable claims. The motion currently before the Court was filed pursuant to this authority, as well as pursuant to a number of federal district court and state trial court decisions. Plaintiff‘s opposition to the motion presents substantial arguments in support of her contention that there is no manageability requirement for PAGA cases, and the Court has no authority to strike her PAGA claims on that basis. (See Opposition at pp. 16-19.) "Under the doctrine of stare decisis, all tribunals exercising inferior jurisdiction are required to follow decisions of courts exercising superiorjurisdiction. Otherwise, the doctrine of stare decisis makes no sense. The decisions of this court are binding 7 upon and must be followed by all the state courts of California. Decisions of every division of the District Courts of Appeal are binding upon all thejustice and municipal courts and upon all the superior courts of this state, and this is so whether or not the superior court is acting as a trial or appellate court. Courts exercising inferiorjurisdiction must accept the law declared by courts of superior jurisdiction. It is not their function to attempt to overrule decisions of a higher court." (Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450, 455.) While there may exist grounds to quibble with the Wesson court's ruling for various policy or other reasons, this Court has neither the ability nor the authority to find, contrary to the holding in Wesson, supra, that trial courts do not have any authority to strike even unmanageable PAGA claims. The critical question for the Court here, however, is not whether it possesses the discretion to strike the PAGA claims, but whether it is apprOpriate under the circumstances for it to exercise that discretion. That is where the issue becomes quite a bit more complex. 2. Standards articulated in Wesson governing when it would be appropriate to strike PAGA claims for unmanageability While the Wesson case stands for the proposition that this Court has the discretion and authority to strike unmanageable PAGA claims, it was far more clear in Wesson than itis here, that the exercise of that discretion was appropriate. The plaintiff in Wesson was a general manager (GM) of a Staples office supply store, and brought an action alleging both class claims and representative PAGA claims on his own behalf and on behalf of 345 other current and former Staples GMs, both premised on the theory that Staples had misclassified its GMs as exempt executives, thereby depriving them of overtime pay and off duty meal and rest periods. Plaintiff‘s motion to certify the class was denied by the trial court, because important factual questions existed relating to whether GMs spent most of their worktime doing exempt, managerial tasks, which could not be resolved on a class- wide basis, given the variation in how they performed their jobs, and the extent to which they performed non-managerial tasks. Staples moved to strike the PAGA claim—which sought almost $36 million in civil penalties for the same alleged Labor Code violations—arguing that given the number of employees it covered and the nature of the allegations, the action would 8 be unmanageable and would violate its due process rights. It argued that its intended affirmative defense—that it pr0perly classified its GMS as exempt and committed no Labor Code violations—would require individualized proof as to each GM, and the claim could not be fairly and efficiently litigated. Indeed, the determination of the propriety of the classification would involve a heavily fact- based inquiry to determine whether the employee is primarily engaged in exempt duties. The primary consideration in that determination is the work actually performed by the employee during the course of the workweek, as well as the employer's realistic expectations and the realistic requirements of the job. The trial court held a series of hearings on the issue, inviting supplemental evidence and briefing from the parties. At one hearing, the parties bo_th estimated that they would need a total of six trial days per GM to litigate GMs‘ classification as exempt executives on an individual basis. Based on that estimate, the trial would have lasted eight years. The trial court granted the motion to strike the PAGA claims, finding them unmanageable. It noted that there was no evidence that Staples' defense could be litigated through common proof, and even cutting trial estimates in half would have resulted in a trial spanning four years and involving witnesses and documents pertaining to each of the 346 individual GMS. The Wesson court affirmed the trial court's order, finding that, under the circumstances present in the case, it had not abused its discretion in striking the PAGA claim on the ground that it was unmanageable. (Ibid, at p. 863.) It noted that manageability, in the context of PAGA, requires that individual issues can be tried fairly and efficiently. (lbid.) It found that this assessment will depend on the circumstances of the case, and that no rigid rule can govern the assessment, but that, in general, a need for individualized proof pertaining to a very large number of employees will raise management concerns. (Ibid) In considering manageability issues, courts should account for a defendant's affirmative defense, and while trial courts enjoy great latitude in structuring trials, a trial management plan must allow the defendant a fair Opportunity to present a defense. (Ibid.) A defendant's ability to present its defense in a fair manner must be preserved. (ld., at p. 864.) The Wesson court made clear, however, that even a finding that a claim is unmanageable as presented will not always result in the striking of a claim, and encouraged judges encountering such claims to leverage their experience with and flexibility in engineering solutions to difficult problems of case management and, if possible, work with the parties to render a PAGA claim manageable by adopting a feasible trial plan or limiting the claim's scope. (Ibid.) 3. Application to the current case. The current case involves 348 allegedly aggrieved employees, within the PAGA period, who received their final wages on a paycard, and for whom Trader Joe's does not possess a signed consent form. As noted above, Trader J oe's contends that plaintiff‘s PAGA claim is unmanageable, and should be stricken. Specifically, it contends that its final wages paycard policy is lawful and in compliance with Labor Code sections 212 and 212, as well as the DSLE Opinion Letters. It contends that its liability can only be resolved on a person-by-person basis, by inquiring whether the employee consented to receive final pay on a paycard and whether they incurred fees as a result of receiving final pay on a paycard. Trader J oe's Specifically contends that this Court has found its paycard policy lawful. That is not entirely accurate, and such a finding could not have been made in the course of a certification motion. Rather, in denying the certification motion, the Court simply made the observation that, "other than possibly the consent requirement, the policy appears to have been wholly compliant with California law." It further noted that "It is true that whether the claimed unlawful policy (payment of final wages via paycard without consent) was in fact compliant with California law may well be a matter of common proof in this action." While the Court will not belabor the analysis it set forth more fully in its resolution of the certification motion, it notes that the DSLE Opinion Letters relied on by the parties at the certification stage analyzed paycard programs in order to determine whether they complied with the pay requirements of Labor Code sections 212 (requiring that a means of pay be negotiable and payable in cash, on demand, without discount) and 213 (permitting deposit of wages due in any bank, savings and loan association, or credit union of the employee's choice with a place of business located in the state, provided that the employee has voluntarily authorized that deposit). Specifically, Opinion Letter 2008.07.07 noted that strong public policy prohibited employers from imposing conditions or obstacles which interfere with or prevent an employee from promptly receiving their wages in full, and the imposition of a fee in order to readily access earned wages could interfere with that obligation. It found that if a paycard program provided for at least one transaction per pay period without fee, it would effectively provide for immediate and free access to an employee's wages in full, and that the existence of other options which might 10 impose a fee would not invalidate the program under Section 212. It emphasized, however, that the effectiveness of the programs would require that employees be fully informed of the services and procedures, and that they be represented as an alternative method for wage payment, for which their participation was optional. Opinion Letter 2008.07.07-2, engaged in a similar analysis, and found a paycard policy not prohibited by Section 213, as long as it otherwise complied with Section 212, findingsignificant that employee participation was not mandatory, and was iust an alternative for employees to receive their wage payments. A. Proof regarding consent. Trader Joe's specifically contends that there is no possible way to manage the consent issue on a representative basis. 1n doing so, it argues that there is no requirement that the required consent be in writing, and that, as a result, where it does not possess any written consent form for an employee, that does not mean the employee did not consent to receiving their final wages on a paycard, and that the only way to determine consent is to conduct individual investigations of each employee to determine whether they consented to receipt of the paycard. In making the argument, Trader Joe's ignores several facts. Not only was it Trader Joe's default policy to always provide final wages to departing employees via a paycard unless they specifically requested another form of payment—making the existence of provable consent important to the legality of its paycard policy—but it has always had a policy of requiring that written consent be obtained from employees who were provided final wages on a paycard. Its instructions to its managers expressly directed that the consent form should be signed by the departing crew member and scanned to payroll, with a COpy given to the crew member. Indeed, when this Court was evaluating the certification motion, Trader Joe's made a point to emphasize that while there were in excess of 900 employees (for the class period) for whom it did not have written consent forms for their payment of final wages via paycard, that was nothing compared to the more than 12,000 written consent forms it had in its records for departing employees who had received their final wages via paycard. Trader Joe's argument that it never, prior to February 2020, explicitly instructed its managers that they should not permit a departing employee to take the paycard containing their final wages unless the employee had first provided the manager with a signed consent form, really does not help its position. Rather, itmore underscores Trader J oe's negligence in failing to enforce the policies and ll procedures it already had, which were critical to its ability to establish the legality of its final wages paycard program. In order to support Trader Joe's interpretation of the consent requirements, the Court would have to find as a matter of law that the consent required in order to render the paycard policy compliant with Labor Code sections 212 and 213 need not be in writing. However, given the facts that (a) the paycard policy is n_ot legally compliant with law unless it is voluntary and an employee has consented to receipt of such wages via paycard, (b) it was Trader Joe's default policy unless a departing employee affirmatively requested another form of payment, (c) it was Trader Joe's policy to instruct managers to obtain signed consent forms from employees to whom paycards were given, and (d) given the various requirements that employers maintain employee personnel files and be able to provide an employee a copy of any instrument the employee has signed, the Court cannot make any such finding. Indeed, it appears that the only reason that Trader Joe's is not currently in possession of written consent forms for 348 former employees during the PAGA period is because it failed to follow its own policy to obtain written consent. To conclude that plaintiff cannot establish a lack of consent by showing a lack of a signed consent form, because Trader Joe's itself negligently failed to follow its own policy to obtain a signed consent form, would be illogical, inequitable, and utterly unjustifiable. Trader Joe's was at all times in control of both its own policies, and its enforcement of those policies. Simply being lax about enforcement does not provide justification for a contention that there can be no common or manageable proof of lack of consent, when responsibility for the failure to possess such written consent falls squarely and solely upon Trader Joe's itself. The Court