In Dunlap v. Superior Court (Bank of America, N.A.), the California Court of Appeal, Second District, held that an employee need not exhaust the administrative prerequisites of the Labor Code’s Private Attorneys General Act of 2004 (Labor Code section 2698 et seq. or "PAGA") before bringing a civil action against an employer for certain Labor Code violations that already allowed for an employee to sue directly prior to PAGA’s enactment. It marks the first published application of the "civil" penalty vs. "statutory" penalty dichotomy articulated in Caliber Bodyworks v. Superior Court, 134 Cal. App. 4th 365 (2005).

The Caliber court held that the determination of whether PAGA’s administrative requirements applied to causes of action for violations enumerated under PAGA turned on the type of relief sought by the plaintiff. If the plaintiff seeks "civil" penalties, the PAGA prerequisites apply. If the plaintiff seeks "statutory" penalties, the PAGA prerequisites do not apply. "Civil" penalties are those only enforceable by the Labor Commissioner prior to PAGA’s enactment. "Statutory" penalties are those recoverable directly by employees prior to PAGA’s enactment.

The Dunlap court applied this "civil" penalty vs "statutory" penalty dichotomy when faced with a question similar to the one raised in Caliber: whether the plaintiff was required to exhaust PAGA’s administrative prerequisites before bringing a civil action under Labor Code section 218 for violations of certain statutes enumerated under PAGA. Omar Dunlap filed a class action lawsuit against Bank of America seeking damages and penalties for various Labor Code violations, including violations of Labor Code sections 226 (record keeping requirements), 201 and 202 (immediate payment upon separation from employment), 204 (duty to pay wages semimonthly), and 226.7 (mandated meal and rest periods). Bank of America moved to strike portions of the complaint seeking penalties on the grounds the trial court lacked jurisdiction because Dunlap failed to exhaust administrative remedies under PAGA. The trial court struck those portions of the complaint and Dunlap petitioned the Court of Appeal for a writ of mandate to vacate the decision.

Dunlap argued that the exhaustion requirements of PAGA did not apply to lawsuits brought directly under Labor Code section 218, as that section is not enumerated under PAGA. Section 218 provides, in part: "Nothing in this article [Labor Code sections 200-243] shall limit the right of any wage claimant to sue directly or through an assigness for any wages or penalty due to him under this article." 

The Dunlap court concluded that PAGA was never intended to be the exclusive remedy for addressing Labor Code violations, although it did impose administrative prerequisites for plaintiffs seeking to recover "civil" penalties for alleged violations under the Labor Code statutes specifically identified in PAGA. The key question was whether the penalty sought was "civil" or "statutory." Analyzing each statute in turn, the court held that Sections 226, 201-202, 204, and 226.7 provided for "statutory" penalties recoverable by employees because the language of the sections explicitly provide for penalties to be paid directly to the employee prior to PAGA’s enactment. Pursuant to Caliber, the penalties were "statutory" in nature and the administrative prerequisites of PAGA did not apply. Dunlap, therefore, stands as an affirmation of Caliber’s "civil" penalty vs. "statutory" penalty dichotomy.