California employers have been closely watching how courts will exercise their discretion to reduce PAGA penalties in the wake of the 2024 reforms. In Taduran v. Glidewell, the Fourth District Court of Appeal confirmed that proportionality, actual harm, employer good faith, and prompt remediation remain powerful factors in limiting both PAGA penalties and attorney’s fee exposure.

Complaint

Plaintiff Abraham Taduran brought a representative PAGA action against former employer James R. Glidewell and Glidewell Dental Ceramics, Inc., alleging eight Labor Code violations. Following competing summary adjudication motions and stipulations, liability remained on four claims: (1) Wage statement violations; (2) Overtime violations based on “uptime” pay; (3) Overtime violations based on bonus pay; and (4) Rest-period violations.

Because the parties stipulated to most facts, the primary issue remaining for trial was the amount of civil penalties. Plaintiff sought approximately $55.9 million in penalties and more than $1.57 million in attorney’s fees based on a requested 1.5 multiplier.

The Trial Court’s Decision

The trial court awarded approximately $516,000 in civil penalties—only a small fraction of the amount plaintiff sought. In reducing the statutory maximum penalties, the court emphasized the technical nature of several violations, the relatively small amount of unpaid wages involved, Glidewell’s good-faith efforts to comply with the law, and its prompt corrective action once Glidewell had received notice that a PAGA claim had been filed. Glidewell’s corrective actions included updating its wage statements to comply with the Labor Code, repaying a minimal amount of unpaid wages, and bringing its rest period policy and practices into compliance. The court ultimately concluded that a substantial reduction calculated on a per-employee basis was appropriate under Labor Code section 2699(e)(2).

The trial court likewise reduced plaintiff’s attorney’s fee request, from $1.57 million to $733,440, applying a 0.70 multiplier to the lodestar. In doing so, the trial court considered the relatively straightforward and records-based nature of the claims, the limited degree of success achieved compared to the relief sought, the fact that the ultimate penalty award represented less than 1% of the amount requested, and the contingency risk associated with the litigation.

Plaintiff appealed.

The Court of Appeal Affirms

The Court of Appeal affirmed in full and awarded costs to Glidewell, holding that Labor Code section 2699(e)(2) authorizes courts to award a “lesser amount” of civil penalties and does not prescribe any particular methodology for reducing a maximum penalty award. Importantly, the Court of Appeal rejected plaintiff’s argument that trial courts must employ a particular methodology when reducing penalties. Accordingly, once the maximum penalty is calculated, trial courts retain broad discretion to employ any reasonable reduction method, including percentage-based reductions, per-pay-period reductions, per-employee reductions, or other reasonable approaches.

The Court of Appeal also upheld the fee award, concluding that the trial court provided specific explanations for its choice of a 0.7 multiplier, relying on the relative lack of complexity of the legal issues, the overall recovery, and plaintiff’s counsel’s upward adjusted billing rates, which applied present hourly rates to historical work.

Takeaway for Employers

Taduran may be one of the most significant employer-friendly PAGA decisions issued since the 2024 reforms because it confirms that trial courts retain broad discretion to reduce otherwise extraordinary PAGA penalties where the statutory maximum would be disproportionate to the nature of the violations, the actual harm suffered, and the employer’s compliance efforts. The decision is particularly notable because the Court of Appeal affirmed a penalty award representing less than 1% of the amount sought by plaintiff, while also upholding a substantial reduction in attorney’s fees.

For employers defending PAGA actions, Taduran may provide a roadmap for challenging disproportionate penalty and fee demands. The decision demonstrates that courts remain willing to substantially reduce PAGA exposure where violations are technical in nature, actual harm is limited, the employer acted in good faith, and corrective measures were promptly implemented. In a post-reform landscape, Taduran serves as a reminder that compliance efforts, remediation, and proportionality still matter.

Employers that receive a PAGA notice should consider taking the following steps immediately:

• Promptly investigate the allegations and quantify any potential underpayments or Labor Code violations. A thorough, early assessment may help identify whether the alleged violations are technical, isolated, or involve only minimal employee harm.
• Where appropriate, implement corrective measures as soon as issues are identified. Prompt remediation not only limits ongoing exposure but may also support arguments for reduced penalties under Labor Code section 2699(e)(2).
• Document good-faith compliance efforts. Maintaining records of payroll audits, policy reviews, training initiatives, and corrective actions may help demonstrate an employer’s commitment to compliance if litigation follows.
• Evaluate whether the alleged violations qualify for cure opportunities or other favorable provisions under the 2024 PAGA reforms. Early action may significantly reduce potential penalties and strengthen the employer’s position in any subsequent litigation.

Taduran underscores that what an employer does after receiving a PAGA notice may be just as important as the underlying violation itself. Courts may look favorably upon employers that promptly investigate, remediate, and take meaningful steps to prevent future violations.