In 2018, Tricia Galarsa filed a civil action against her former employer, Dolgen California, LLC, seeking to recover civil penalties under the Labor Code Private Attorneys General Act of 2004. She sought penalties for alleged Labor Code violations affecting herself and other employees. The underlying facts from earlier proceedings were available to the parties and the court, so they were not repeated in the opinion. The focus of the case centered on how the version of the statute in effect from mid-2016 to mid-2024 applied to the claims raised.
The relevant statutory language in effect at the time provided that an aggrieved employee could recover civil penalties through a civil action brought “on behalf of himself or herself and other current or former employees.” The action required the plaintiff to qualify as an aggrieved employee, defined as someone who had personally suffered at least one Labor Code violation. The case presented questions about whether the statutory text allowed a civil action that sought penalties only for violations affecting other employees and whether such a claim could proceed without simultaneously pursuing penalties for violations experienced by the plaintiff.
Following earlier appellate activity, the matter returned to the trial court after a remittitur issued in September 2023. The prior appellate decision had directed the trial court to compel arbitration only as to claims seeking penalties for violations suffered by Galarsa personally. Claims based on alleged violations affecting other employees were permitted to proceed in court.
In 2024, Galarsa sought leave to file a second amended complaint. The proposed amended pleading removed all references to penalties for violations she personally experienced. It stated that the action was intended to proceed exclusively in her representative capacity on behalf of the state and other aggrieved employees. Dolgen opposed the filing, asserting that the amendment was futile because it did not state a claim the statute authorized. It also asserted that the amended pleading attempted to avoid arbitration requirements in the parties’ prior agreement.
The trial court granted leave to amend. After the second amended complaint was filed, Dolgen renewed a motion to compel arbitration. It asserted that whether Galarsa had suffered a Labor Code violation was a threshold issue that must be arbitrated before any representative claim could proceed. In the alternative, Dolgen demurred to the amended complaint, arguing that the statute did not permit a civil action seeking penalties solely for violations suffered by other employees.
In November 2024, the trial court held a hearing on both the renewed motion to compel and the demurrer. The court concluded that arbitration was not required before litigation of the claims based on violations suffered by other employees. It denied the motion to compel arbitration and overruled the demurrer.
The Court of Appeal reviewed whether the statute authorized an action seeking penalties only for violations affecting employees other than the named plaintiff. It examined the language allowing an employee to bring a civil action “on behalf of himself or herself and other current or former employees.” The Court of Appeal noted that the word “and” can be ambiguous in statutes and may be interpreted in more than one reasonable way depending on context. The court concluded that the statute’s use of “and,” combined with the permissive verb “may,” created more than one reasonable interpretation.
The court reviewed earlier decisions, including opinions that interpreted the statute to require a plaintiff to pursue penalties for both their own violations and those of other employees. It also compared those cases to its own recent reasoning in related decisions. The Court of Appeal explained that the statutory scheme was intended to promote the enforcement of labor laws and that the statute’s remedial purpose supported a reading that broadened, rather than narrowed, available enforcement mechanisms.
In analyzing legislative history, the court noted that the change from “or” to “and” during legislative drafting did not include an explanation showing whether the amendment was intended to narrow or broaden the scope of permissible actions. The materials available stated only that the change corrected a drafting error, and the court determined that the legislative history did not resolve the ambiguity.
The court also considered the broader context in which the statute operated. It noted that subsequent legal developments related to arbitration altered the landscape in which representative enforcement actions occurred. These developments raised practical questions about whether limiting representative claims would hinder enforcement. Because the statutory purpose was to maximize enforcement of labor laws, the court concluded that an interpretation allowing representative actions based solely on violations affecting other employees was consistent with the statute’s purpose.
The Court of Appeal concluded that the former version of the statute allowed employees to bring a civil action seeking penalties only for violations suffered by other employees. It held that the text was ambiguous and that a broader interpretation best promoted the statute’s enforcement purpose. As a result, the court affirmed the order overruling Dolgen’s demurrer.
The court also affirmed the trial court’s decision denying the renewed motion to compel arbitration. It concluded that, under the parties’ arbitration agreement, the question of whether Galarsa qualified as an aggrieved employee was not an issue the parties intended to arbitrate. The consolidated proceedings therefore resulted in affirmance of both challenged trial court orders.
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