Magadia v. Wal-Mart Associates, Inc., No. 19-16184 (9th Cir. 2021)
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Plaintiff filed a class action against Walmart, alleging three violations of California Labor Code's wage-statement and meal-break requirements; first, plaintiff alleged that Walmart did not provide adequate pay rate information on its wage statements, Cal. Lab. Code 226(a)(9); second, he claimed that Walmart failed to furnish the pay-period dates with his last paycheck, section 226(a)(6); and third, he asserted that Walmart did not pay adequate compensation for missed meal breaks, section 226.7(c). Plaintiff sought relief under California's Private Attorneys General Act (PAGA).
The Ninth Circuit held that plaintiff lacked standing to bring the meal-break claim because he did not suffer injury himself. The panel explained that PAGA's features diverge from the assignment theory of qui tam injury in Vermont Agency of Nat. Res. V. U.S. ex rel. Stevens, 529 U.S. 765 (2000), and they depart from the traditional criteria of qui tam statutes. In regard to the two wage-statement claims, the panel held that plaintiff had standing but that Walmart did not breach California law. The panel explained that, because Walmart must retroactively calculate the MyShare overtime adjustment based on work from six prior periods, the panel did not consider it an hourly rate "in effect" during the pay period for purposes of section 226(a)(9). Therefore, Walmart complied with the wage statement law here. The panel also held that Walmart's Statements of Final Pay do not violate the wage statement statute.
Court Description: Article III Standing / California Labor Law In a class action suit brought by Roderick Magadia, a former Walmart employee, alleging violations of California Labor Code’s meal-break and wage-statement requirements, the panel: (1) vacated the district court’s judgment and award of damages on a Cal. Labor Code § 226.7 claim for meal-break violations and remanded with instructions to further remand the claim to state court; and (2) reversed the judgment and award of damages on two Cal. Labor Code § 226(a) claims for wage-statement violations and remanded with instructions to enter judgment for Walmart. The panel held that Magadia lacked Article III standing to bring a California Private Attorney General Act (“PAGA”) claim for Walmart’s meal-break violations since he himself did not suffer injury. Specifically, the panel noted that qui tam actions are a well-established exception to the traditional Article III analysis, but held that PAGA’s features diverged from Vermont Agency of Nat. Res. V. U.S. ex rel. Stevens, 529 U.S. 765 (2000)’s assignment theory of qui tam injury. The panel also held that PAGA’s features departed from the traditional criteria of qui tam statutes. The panel next considered whether Magadia had standing to bring his two wage-statement claims under Cal. Labor Code § 226(a), which requires employers to accurately furnish certain itemized information on its MAGADIA V. WAL-MART ASSOCIATES 3 employees’ wage statements. The panel held that a violation of § 226(a) created a cognizable Article III injury here. To determine whether the violation of a statute constituted a concrete harm, the panel conducted a two-part inquiry. First, the panel held that § 226(a) protected employees’ concrete interest in receiving accurate information about their wages in their pay statements; and Walmart’s failure to disclose statutorily required information on Magadia’s wage documents, if true, violated a “concrete interest.” Second, Magadia sufficiently alleged that Walmart’s § 226(a) violation – depriving him of accurate itemized wage statements – presented a material risk of harm to his interest in the statutorily guaranteed information. The panel also concluded that other class members who could establish § 226(a) injuries had standing to collect damages. Finally, the panel considered the merits of Magadia’s two claims under Cal. Labor Code § 226(a). First, the panel held that the wage statement law did not require Walmart to list the rate of the MyShare overtime adjustment on employees’ wage statements, and the district court erred in holding otherwise. Because Walmart must retroactively calculate the MyShare overtime adjustment based on work from six prior periods, the panel did not consider it an hourly rate “in effect” during the pay period for purposes of § 226(a)(9), and Walmart complied with the wage statement law here. Second, the panel held that Walmart’s Statement of Final Pay did not violate the wage statement statute. Namely, Walmart complied with Cal. Labor Code § 226(a)(6) when it furnished the required pay-period dates to Magadia and other terminated employees in their final wage statements at the end of the next semimonthly pay period. 4 MAGADIA V. WAL-MART ASSOCIATES
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