California’s Private Attorneys General Act (PAGA) lawsuits often expose California employers to significant civil penalties. However, a recent California Court of Appeal decision provides an important reminder: trial courts have broad discretion to reduce PAGA penalties and attorney’s fees when the circumstances warrant it.

In a recent decision of Taduran v. Glidewell, Dental Ceramics, Inc., the employee sought nearly $56 million in PAGA penalties. After reviewing the evidence, the trial court awarded approximately $516,000 in penalties—less than one percent of what the employee requested. The Court also reduced the employee’s attorney’s fee request from approximately $1.6 million to $733,440. The Court of Appeal affirmed both decisions.

Case Background

Abraham Taduran sued his former employer, James R. Glidewell, Dental Ceramics, Inc. under PAGA, alleging that he received inaccurate wage statements, was not authorized and permitted to take rest periods, was not paid uptime (payment for non-productive work time), and was not paid non-discretionary bonus payments. The employer conceded liability on several claims, and the parties stipulated to most material facts, including the number of affected employees and pay periods involved. At trial, the dispute centered on the calculation of civil penalties for these violations under PAGA. Taduran sought a total of $55,985,350 in PAGA civil penalties and $1,570,500 in attorney’s fees as the prevailing party.

Why Did the Court Reduce the Penalties?

The Court emphasized that, although PAGA sets maximum statutory penalties, judges are not required to award the maximum amount. Instead, trial courts may reduce penalties using any reasonable method based on the facts of the case. Several factors influenced the Court’s decision, including:

• The wage statement violations did not result in unpaid wages and employees received the missing details on a separate “Production Sheet.” The Company also corrected its wage statements prior to the trial.
• The Company corrected its rest period recording and payment practices before the trial to eliminate rounding. The Company also offered to pay affected employees for wage underpayments related to the rest period rounding issue.
• The Company offered to correct any wage underpayments caused by failing to include uptime in employees’ compensation.

Based on those reasons, the Court concluded that awarding the statutory maximum for the wage statement, rest period and uptime issue would have been unjust, arbitrary, oppressive, or confiscatory.

The Court Also Reduced Attorney’s Fees

Taduran also sought more than $1.5 million in attorney’s fees. Instead of increasing the fee award with a positive multiplier, the trial court applied a negative multiplier (0.7) after considering:

• The straightforward nature of the claims;
• The results actually achieved; and
• The fact that current billing rates already reflected increases over time.

The Court of Appeal held that trial judges have broad discretion when determining reasonable attorney’s fees and upheld the reduced award.

What This Means for Employers

This decision highlights several practical strategies employers should consider when defending PAGA claims:

• Correct payroll issues promptly. Demonstrating a willingness to fix problems can support a reduction in penalties.
• Document good-faith compliance efforts. Written policies, audits, training, and corrective actions matter.
• Pay employees promptly if errors are discovered. Voluntary correction may influence the court’s penalty analysis.

Key Takeaway

While PAGA claims continue to pose significant financial risk, maximum penalties are not inevitable. The outcome in Taduran serves as a reminder that trial courts have discretion in determining how to award statutory penalty reductions. Employers that maintain strong compliance programs, act promptly to correct mistakes, and present evidence of good-faith efforts may be well-positioned to argue for substantially reduced penalties and attorney’s fees.

Every PAGA case is fact-specific, but Taduran reinforces an important principle: Courts retain significant discretion to fashion a fair and reasonable award based on the circumstances of the case, not simply the statutory maximum.