Magadia v. Wal-Mart Assocs., Inc., 999 F.3d 668 (9th Cir. 2021)

In this class action, Roderick Magadia, a former Walmart employee, alleged violations of California’s meal-break and wage-statement requirements (Cal. Lab. Code §§ 226.7 and 226(a)).  After the district court (Judge Lucy H. Koh) determined that Magadia suffered no meal-break violation, it decertified the class, but permitted Magadia to still seek PAGA penalties on that claim based on alleged violations against other Walmart employees.  The district court also ruled against Walmart on the wage statement claims (inadequate pay-rate information and failure to furnish pay-period dates with Magadia’s last paycheck) and awarded Magadia and the class members over $100 million in damages and penalties.

The Ninth Circuit vacated the district court’s judgment and award of damages on the meal-break violations and remanded with instructions to remand the claim to state court; as for the wage-statement violations, the Court reversed the judgment and remanded with instructions to enter judgment for Walmart.  The Court held that because Magadia did not suffer any meal-break violation, he did not have standing to bring the claim, reasoning that PAGA differs in “significant respects” from traditional qui tam statutes that permit a claim to be brought on behalf of others.  The Court further held that while Magadia did have standing to bring the wage-statement claims under Section 226(a), Walmart had not violated the statute because the quarterly bonus amounts that Walmart paid retroactively did not need to be included in the wage statements.  The Court also determined that Walmart’s statements of final pay did not violate the wage statement law because Section 226(a) permits employers to furnish wage statements semimonthly or at the time of each payment of wages, and Walmart did the former.  See also General Atomics v. Superior Court, 64 Cal. App. 5th 987 (2021) (employer did not violate Section 226 by separately referencing multiple regular and overtime rates of pay on wage statements); Levanoff v. Dragas, 2021 WL 2621360 (Cal. Ct. App. 2021) (employer did not violate California law by using the “rate-in-effect” (rather than weighted average) method for calculating overtime for dual-rate employees).