Good-faith fixes and minimal harm gave the dental maker a near-total penalty break
A California dental maker faced nearly $56 million in claimed wage penalties. A court cut it to about $516,000 - and that held up.
That is the practical takeaway from a published California appellate ruling that should steady the nerves of employers worried about runaway penalties under the state's Private Attorneys General Act, or PAGA. The law lets an employee sue over Labor Code violations on behalf of the state and fellow workers, and the numbers can climb fast.
The case began when Abraham Taduran, a former employee, sued James R. Glidewell, Dental Ceramics, Inc. over a run of wage-and-hour problems. By the time of trial, the company's liability was settled. Glidewell stipulated to one violation, underpaid rest periods, and the court had already decided three others against it on summary adjudication: incomplete wage statements, underpaid overtime tied to what the parties called "uptime" pay, and non-discretionary bonuses left out of the regular pay rate. The only question left was how much the company should pay.
On paper, the exposure was enormous. Taduran calculated the maximum PAGA penalties at $55,985,350. The trial court was not persuaded. It awarded about $516,000, which the court described as less than 1% of what Taduran sought.
Why the steep cut? The court pointed to facts that matter to any HR leader managing compliance. The wage statement errors caused no lost wages, and employees received the missing details on a separate "Production Sheet." The rest period shortfall came from a rounding method the court found Glidewell had applied in good faith, and the company had shown willingness to change the system before the court ruled. The actual underpayments were small. Even so, the court imposed the full penalty on the bonus pay issue, a reminder that reductions are earned, not automatic.
Taduran appealed, arguing the court was required to reduce penalties on a per-pay-period basis rather than per employee. The Court of Appeal disagreed. It held the Labor Code sets no mandatory formula for reducing maximum PAGA penalties, so trial courts may use a percentage, a per-pay-period, or a per-employee method. The judgment was affirmed.
The decision carries a second lesson, this one on legal fees. Taduran's lawyers asked for a 1.5 multiplier on a lodestar of roughly $1.05 million. The trial court applied a 0.70 multiplier instead, awarding $733,440 in fees. One reason: counsel had billed current, higher hourly rates for work performed years earlier. The appeals court upheld that decision too.
For HR and employment teams, the message is practical. PAGA exposure can look catastrophic on a spreadsheet, but courts weigh good faith, willingness to fix problems, and whether workers actually lost money. Documenting compliance efforts and correcting problems can move the penalty number sharply.
