Pebble Beach Company agrees to settle wage theft lawsuit

One of California’s most respected resort operators has agreed to pay $630,000 to settle a class-action lawsuit brought by current and former employees over alleged violations of California labor laws. The Pebble Beach Company has not admitted any wrongdoing, and a company spokesperson said the decision to settle the matter was made to avoid the distractions and costs of litigation. The lawsuit was originally filed by two former workers who claimed that they were ordered to work off-the-clock and denied meal and rest breaks mandated by California law.

Private Attorneys General Act

The two former employees sued PBC under the provisions of California’s Private Attorneys General Act. The 2004 law permits aggrieved employees to sue their employers on behalf of themselves, their coworkers and the state over violations of the California Labor Code. PAGO allows aggrieved employees to seek civil penalties for violations, but it does not allow them to recover back pay that they are entitled to under California’s wage and hour laws.

State agency to receive $282,500

Less than $100,000 of the $630,000 settlement will actually be paid to current or former employees. According to media reports, eligible workers will receive between $2 and $72. The California Labor and Workforce Development Agency will receive $282,500. That is because the agency is entitled to 75% of the $376,750 in PAGO penalties included in the settlement.

The state wins

Labor advocacy groups may laud this settlement as a victory for workers, but the state of California is the real winner. Aggrieved employees are only permitted to act as their own attorneys general when the California Labor and Workforce Development Agency decides not to pursue a case against their employers, so it seems a little unfair to require them to hand over three-quarters of the money they recover when they prevail.