Case Name: Adhikari v. Ramarapu, et al.
Case No.: 2015-1-CV-279051

Defendants Narender Kumar Ramarapu and NR Enterprises, Inc. (collectively, “Defendants”) move for judgment on the pleadings as to the complaint (“Complaint”) filed by plaintiff Amrit Prasad Adhikari (“Plaintiff”).

This is an employment action alleging various Labor Code violations. Plaintiff was formerly employed (non-exempt) as a waiter at Ichaat Café in Sunnyvale by Defendants and brings this action on behalf of himself and all other aggrieved employees for unpaid wages and missed break periods. (Complaint, ¶¶ 1, 22.) On April 7, 2015, Plaintiff filed the Complaint asserting the following causes of action: (1) failure to pay minimum wages; (2) failure to pay overtime; (3) failure to pay split shift premiums; (4) failure to provide meal and rest periods; (5) conversion of gratuities; (6) failure to provide accurate itemized wage statements and maintain adequate records; (7) failure to pay all wages due at termination; and (8) violation of enforcement of the Private Attorneys General Act (“PAGA” or the “Act”).

On May 6, 2016, Defendants filed the instant motion for judgment on the pleadings as to the claims asserted under PAGA. Plaintiff opposes the motion.

I. Request for Judicial Notice

Defendants’ request for judicial notice of the Complaint (Exhibit A) and their answer to the Complaint (Exhibit B) is GRANTED. (See Evid. Code, § 452, subd. (d).)

II. Motion for Judgment on the Pleadings

With the instant motion, Defendants assert that Plaintiff’s PAGA claims should be dismissed because he pleads facts demonstrating that he has not exhausted his administrative remedies under Labor Code section 2699.3 (“Section 2699.3”).

PAGA (Labor Code section 2698 et seq.) was adopted by the Legislature in 2003 in response to a shortage of State funds and staffing and “allows aggrieved employees, defined as ‘any person who was employed by the alleged violator and against whom one or more of the alleged violations was committed’ to bring a civil action to collect civil penalties for Labor Code violations previously only available in enforcement actions initiated by the State’s labor law enforcement agencies.” (Caliber Bodyworks, Inc. v. Superior Court (2005) 134 Cal.App.4th 365, 374.) The Act also prescribes a civil penalty for existing Labor Code sections for which no civil penalty has otherwise been established. (Id.)

Section 2699.3, subdivision (a), provides the administrative procedures that must be followed before an aggrieved employee may file a civil action to recover civil penalties and provides, in relevant part, as follows:
(a) A civil action by an aggrieved employee pursuant to subdivision (a) or (f) of Section 2699 alleging a violation of any of provision listed in Section 2699.5 shall commence only after:

(1) The aggrieved employee or representative shall give written notice by certified mail to the Labor and Workforce Development Agency [“LWDA”] and the employer of the specific provisions of this code alleged to have been violated, including the facts and theories to support the alleged violation.

(2) (A) The agency shall notify the employer and the aggrieved employee or representative by certified mail that it does not intend to investigate the alleged violation within 30 calendar days of the postmark date of the notice received pursuant to paragraph (1). Upon receipt of that notice or if no notice is provided within 33 calendar days of the postmark date of the notice given pursuant to paragraph (1), the aggrieved employee may commence a civil action pursuant to Section 2699.

A plaintiff must plead compliance with the foregoing prefiling notice requirements in order to allege a cause of action for violation of the PAGA and claims for civil penalties based on violations of the Labor Code sections listed in Section 2699.5. (Caliber Bodyworks, Inc. v. Superior Court, supra, 134 Cal.App.4th at 383-383.) Here, in the Complaint, Plaintiff alleges that he notified the LWDA of Defendants’ purported Labor Code violations on April 3, 2015. (Complaint, ¶ 4) The Complaint itself, as indicated above, was filed only four days later on April 7th. As there are no allegations that Plaintiff received notification from the LWDA within that short window of time that it did not intend to investigate his claims and Plaintiff clearly did not wait 33 days to file his pleading, Plaintiff’s PAGA claims as currently pleaded are deficient because he fails to allege compliance with the prefiling notice requirements of Section 2699.3. Consequently, Defendants’ motion for judgment on the pleadings is granted on this basis. However, the Court’s inquiry does not end here, as the next question is whether Plaintiff should be permitted leave to amend to plead compliance, i.e., that the problem of his failure to exhaust has been cured since the filing of the Complaint.

Plaintiff asserts in his opposition that he was ultimately not notified within the 33-day period by the LWDA that it did not intend to investigate his claims and thus his failure to exhaust has now been cured. He further asserts, relying in part on Harris v. Vector Marketing Corp. (N.D. Cal. 2010) 2010 WL 56179, that this failure is not absolutely fatal to his PAGA claims and he should therefore be granted leave in order to add further allegations to correct the pleading deficiency. Defendants counter that Harris actually supports their position and Plaintiff cannot correct the deficiency because the statute of limitations on his PAGA claims has run.

In Harris, the plaintiff initiated a lawsuit in October 2008 asserting various violations of the Labor Code. After the parties stipulated to the filing of a first amended complaint in December 2008, the plaintiff included for the first time a PAGA claim. The parties subsequently stipulated to the filing of a second amended complaint (“SAC”) in February 2009 which continued to allege a PAGA claim. Thereafter, in September 2009, the plaintiff sent a letter to the LWDA alleging that her employer had violated various Labor Code provisions and informing it that she intended to amend her complaint in her lawsuit against the company to add claims under PAGA. The agency responded to the letter two months later and stated that it had decided not to investigate her allegations.

The plaintiff subsequently moved to amend her complaint a third time to add claims under PAGA which was opposed by the defendant, who argued that the proposed amendment was futile because the plaintiff had failed to exhaust her administrative remedies. It was undisputed that at the time she asserted a PAGA claim in the SAC in February 2009, the plaintiff had yet to send notice to the LWDA as required by Section 2699.3. While the court was “troubled” by the plaintiff’s failure to send the requisite notice until 7 months after she asserted her PAGA claim in the SAC, it did not find this fact dispositive because she had since sent a PAGA notice and received a response from the LWDA, thereby “curing” the failure to exhaust problem. Despite this conclusion, plaintiff’s motion was ultimately denied because her proposed PAGA claim was deemed to be untimely, with the court holding that the actual date of the assertion of the claim for the purposes of the statute of limitations was not when it was initially pleaded, but when she fulfilled the notice requirements of Section 2699.3. By that time, in September 2009, over a year had elapsed since the end of the plaintiff’s employment and PAGA claims have a one-year limitations period. Thus, the plaintiff could not add those claims. The court also rejected the plaintiff’s assertion that the statute of limitations was not a bar because of the relation back doctrine, explaining that the doctrine “does not operate to assign the performance of a condition precedent to a date prior to its actual occurrence.” (Harris, supra, 2010 WL 56179 at *3, quoting Wilson v. People ex rel. Dept. of Public Works (1969) 271 Cal.App.2d 665, 668.)

Based on Harris, the Court agrees with Plaintiff that the fact that he failed to exhaust his administrative remedies when he initially filed his PAGA claims is not necessarily fatal to those claims. It is possible, depending on what is alleged, for that failure to be cured in a subsequent pleading. Further, in a departure from Harris, and contrary to what Defendants argue, Plaintiff’s PAGA claims are not necessarily time barred. According to the allegations of the Complaint, Plaintiff’s employment with Defendants ended on March 20, 2015. Accordingly, Plaintiff would have to have made a PAGA claim by March 20, 2016 in order for the claim to fall within the statute of limitations. Plaintiff alleges that he notified the LWDA of his potential claims on April 3, 2015 (Complaint, ¶ 4), two weeks after his employment ended. Thus, Plaintiff appears to have started pursuing his administrative remedies well within a year after his employment ended and, assuming the failure to exhaust has been cured, could conceivably amend his Complaint to correct the deficiency with respect to his PAGA claims. There is no authority which supports Defendants’ contention that the only way for Plaintiff to cure the failure to exhaust defect is to dismiss his PAGA claims, send a second notice to them and the LWDA, wait the requisite 33 days (or earlier if he receives a response from the agency), and then amend his Complaint to state the PAGA claims. In short, the Court finds that the pleading deficiency at bar may be overcome by amendment. Accordingly, Defendants’ motion for judgment on the pleadings is GRANTED WITH 10 DAYS’ LEAVE TO AMEND.