In Sargent v. Board of Trustees of the California State University, the California Court of Appeal highlighted an important distinction between Private Attorneys General Act (PAGA) claims asserted against a public entity employer based on statutes that themselves provide for civil penalties and PAGA claims that are based on PAGA’s default civil penalties provisions under California Labor Code § 2699(f). Section 2699(f) provides for penalties of $100 “for each aggrieved employee per pay period for [an] initial violation” and $200 “for each aggrieved employee per pay period for each subsequent violation.” Specifically, the court held that “viable PAGA claims can be asserted against [a public entity employer], but only when the statutes upon which the claims are premised themselves provide for penalties.” Many commentators focused on the public entity employer aspects of the decision, but the case was unique for its inclusion of PAGA claims based on violations of California’s workplace safety law, the California Occupational Safety and Health Act of 1973 (California OSH Act) and its implementing regulations.
This is one of the first published decisions involving a PAGA claim for civil penalties premised on alleged violations of the California OSH Act, which is enforced by the California Division of Occupational Safety and Health (Cal/OSHA). In overturning nearly $3,000,000 in civil penalties awarded by the lower court, the appellate court explained that the plaintiff/respondent, Thomas Sargent, could not recover civil penalties against the California State University (CSU) system for alleged violations of California Labor Code §§ 6401, 6401.7(a), and 6403 (the California OSH Act provisions) and alleged violations of Labor Code § 232.5(a) (a provision of the California Whistleblower Protection Act) because those statutory sections do not themselves expressly provide for civil penalties. The result would differ, however, for private employers that would be subject to PAGA’s default civil penalties for those claims that do not themselves provide for civil penalties.
The Sargent Decision
Sargent worked as a health and safety engineer for Sonoma State University, a university within the CSU system. He allegedly reported safety concerns regarding asbestos and lead-based paint to his supervisors, but allegedly he was ignored and his concerns were dismissed. He was subsequently disciplined, allegedly in retaliation for reporting his concerns—first internally to management and then to the California Labor and Workforce Development Agency (LWDA) as part of a PAGA complaint. He subsequently resigned his employment and filed a civil action against CSU and his supervisor, alleging various wrongful termination claims and a claim for civil penalties under PAGA. He premised the PAGA claim on alleged violations of the California OSH Act, including some provisions that provided for civil penalties and others that relied upon PAGA’s default penalties.
The jury returned a special verdict in favor of Sargent on his retaliation claims. The jury also returned a verdict in favor of Sargent on his PAGA claim based on a violation of Labor Code § 232.5(a)—which prohibits an employer from preventing an employee’s right to disclose information about the employer’s working conditions—and various violations of the California OSH Act. However, the jury determined that while up to 231 CSU employees had been impacted by CSU’s alleged violations of the California OSH Act provisions, Sargent was not one of them. The trial court ordered CSU to pay almost $3,000,000 in civil penalties for violations of Labor Code §§ 6401, 6401.7(a), 6403, and 6407. CSU appealed on the grounds that it was not subject to PAGA.
The appellate court reversed the PAGA award and explained that though CSU was “not categorically immune from PAGA claims” by reason of being a public entity, CSU was immune from default civil penalties because “public entities are not ‘persons’ under PAGA.” The court explained that PAGA provides for two types of penalties: (1) penalties for violating Labor Code provisions that themselves provide for civil penalties and that were traditionally “recoverable only by the [LWDA] or its related entities” and (2) default civil penalties under Labor Code § 2699(f) for violations of Labor Code provisions “that do not themselves provide for civil penalties.” The appellate court allowed the attorneys’ fees award to stand.
The court explained that the jury determined that “CSU [had] violated three [California OSH Act] statutory provisions that do not themselves provide for penalties” (Labor Code §§ 6401, 6401.7(a), and 6403) and “four Cal-OSHA regulatory provisions that do provide for penalties” (California Code of Regulations, Title 8, §§ 5208(k)(1) and (k)(7), 1529(l)(3), and § 5142(b)(1)). But “[t]he jury also found … that Sargent did not personally suffer from any of these regulatory violations” and therefore was not individually harmed. Though the jury did “[find] that CSU [had] violated section 232.5, subdivision (a), of the Whistleblower Protection Act,” the court noted that “this provision also does not itself provide for a penalty” and therefore was not a viable claim.
Takeaways on PAGA Claims Based on Cal/OSHA Violations
This decision is an important clarification for both private- and public-sector employers that an employer’s obligation to ensure the health and safety of its employees may be enforced by Cal/OSHA, and employees may bring PAGA claims on behalf of themselves and other allegedly “aggrieved employee[s]” for alleged workplace safety violations. Potential California OSH Act and Cal/OSHA violations, such as violations of the California COVID-19 Emergency Temporary Standards, can subject employers to significant liability for civil penalties in PAGA actions.