As we have previously reported, one aspect of the 2024 reforms to the California Private Attorneys’ General Act (PAGA) was the California Legislature’s creation of a new procedure: the “Early Evaluation Conference.” According to the PAGA reform statute, employers with at least 100 employees can seek an Early Evaluation Conference (the Conference) within the time required to respond to the lawsuit to allow a neutral evaluator to decide a wide range of issues, including:
- Whether any of the alleged violations occurred and, if so, whether the defendant has cured the alleged violations.
- The strengths and weaknesses of the plaintiff’s claims and the defendant’s defenses.
- Whether the plaintiff’s claims, including any claim for penalties or injunctive relief, can be settled in whole or in part.
- Whether the parties should share other information that may facilitate early evaluation and resolution of the dispute.
Unfortunately, the legislature provided little clarity about the specific mechanics of the Early Evaluation Conference. As a result, companies hit with PAGA lawsuits hoping to utilize this mechanism are left to wonder about how to properly request a Conference, who can serve as a “neutral evaluator,” and how the Conference itself works.
It has been over a year since the reform took effect, and in this time, PAGA defendants have seen the Early Evaluation Conference be interpreted in vastly different ways.
Some courts simply refer the parties to a private mediator or a settlement judge, as they treat the Early Evaluation Conference as a settlement mechanism. Unfortunately, this approach generally proves fruitless, because the Conference must take place so early in the case that there typically has been no discovery and the parties lack sufficient information to value the case.
On the other side of the spectrum, the California Labor & Workforce Development Agency (LWDA), which serves as the technical “party” to a PAGA lawsuit, suggests the Early Evaluation Conference is meant to help achieve early resolution in court. The LWDA issued an FAQ, posing the question “What happens after an employer files a request for early evaluation?”, to which the LWDA answered: “Generally, after an employer files a request for early evaluation the court will issue an order referring the parties to early evaluation. This process will be overseen by a neutral evaluator and is intended to facilitate early resolution of the PAGA claims in court.” However, the remaining FAQs addressing the Conference refer only to using the Conference to address cure provisions, and the LWDA does not speak to the other topics the Legislature laid out as appropriate for addressing at the Conference (such as determining whether there were any violations in the first instance).
The silver lining in this lack of clarity regarding the purpose of the Conference is that parties have some freedom to use it for whatever purpose they choose. Moreover, the briefing requirement related to the Conference provides a good opportunity to force the parties to articulate their factual and legal theories early on in the case, which could result in a narrowing of issues in the case.
