A PAGA plaintiff argued that his former employer owed $55,985,350 in civil penalties. The trial court awarded $515,965, and in Taduran v. James R. Glidewell, Dental Ceramics, Inc. the Court of Appeal affirmed. The court held that “the Labor Code does not mandate any particular method for reducing a maximum civil penalty.” For an employer facing a PAGA judgment, the size of the penalty depends heavily on the record the company builds about why the violations happened and how fast it fixed them.
What the Court of Appeal decided
The Fourth District, Division Three, filed the opinion on May 26, 2026 and certified it for publication on June 17, 2026 (case No. G064718). It’s a published decision.
Abraham Taduran brought a single PAGA claim against a dental laboratory. By trial, liability was settled. The court had granted summary adjudication on some claims, and the company stipulated to liability on a rest period claim. The only question left was how much to award. The parties submitted that question on stipulated facts and trial briefs, with no live testimony.
The trial court reduced the penalties on three of four violations, and it set the reduced amounts per affected employee, not per pay period. Taduran argued that the reduction had to be made per pay period, because PAGA penalties are calculated that way. The Court of Appeal disagreed, holding that after a court computes the maximum, it may use “any reasonable method to reduce that amount, including applying a reduction on a percentage, per pay period or per employee basis.”
Taduran also argued the reduction was so steep it approached zero. The court answered that “this challenge ignores the factors leading to the reduction and examines only the final result divorced from the facts and circumstances of this case.”
The statute that gives courts this power
Labor Code section 2699, subdivision (e)(2) lets a court “award a lesser amount than the maximum civil penalty amount specified by this part” when, “based on the facts and circumstances of the particular case, to do otherwise would result in an award that is unjust, arbitrary and oppressive, or confiscatory.”
The default PAGA penalty under section 2699, subdivision (f)(2)(A) is “One hundred dollars ($100) for each aggrieved employee per pay period,” with lower and higher figures for specific situations. Multiply that by a few hundred employees and five years of pay periods, and the theoretical maximum often has no relationship to the harm. Subdivision (e)(2) is the safety valve.
The 2024 PAGA reform added two caps, at 15 and 30 percent of the penalty sought, for employers that took “all reasonable steps” toward compliance under subdivisions (g) and (h) before or shortly after the PAGA notice. Those caps, and the cure procedure, are covered in the firm’s guide to responding to a PAGA notice. Taduran is about the separate, case-by-case discretion that applies at judgment, whether or not a cap applies.
What persuaded the trial court to cut the penalties
The trial court’s reasons, as the opinion describes them, are the most practical part of the case. Each tracks a fact the employer could document.
| Violation | Maximum penalty | Award | Why the court reduced it (or didn’t) |
|---|---|---|---|
| Wage statements left off piece-rate details | $33,199,250 | $100,165 | No unpaid wages resulted, a separate production sheet gave employees the missing information, and the company fixed the statements 16 months before the ruling |
| Rest period pay rounded against some employees | $22,068,700 | $190,900 | The pay method was adopted in good faith, the company changed it before adjudication, and underpayments averaged $0.26 per pay period |
| Overtime omitted “uptime” pay | $658,900 | $167,400 | Unpaid wages totaled $7,310, and the company was willing to repay them |
| Overtime omitted nondiscretionary bonuses | $58,500 | $58,500 | No reduction |
The last row matters as much as the others. The trial court awarded the full penalty on the bonus issue. The Court of Appeal pointed to that award to reject the argument that per-employee reductions remove the incentive to comply: “Thus, there remains sufficient deterrence notwithstanding this particular award of civil penalties.” Discretion cuts both ways, and a court can decline to use it.
What doesn’t change for employers
Taduran doesn’t make big reductions automatic. The standard of review is abuse of discretion, so a trial judge who refuses to reduce penalties on a similar record is just as likely to be affirmed. The decision gives trial courts flexibility. It doesn’t give employers a formula.
The case is also a reminder of what PAGA litigation costs even when the employer wins on amount. The trial court cut the requested fees with a 0.70 multiplier and still awarded Taduran $733,440 in attorney fees plus $98,138.21 in costs, more than the penalties themselves. Under section 2699, subdivision (k)(1), “Any employee who prevails in any action shall be entitled to an award of reasonable attorney’s fees and costs.” Conceding liability early can shrink the penalty fight, but the fee clock keeps running until judgment.
One more detail stands out. The trial court called the wage statement maximum “enormous” in part because the company paid weekly, which doubled the number of pay periods. For actions under the 2024 reform, section 2699, subdivision (o) now cuts the penalty in half “if the employees’ regular pay period is weekly rather than biweekly or semimonthly.” Taduran was filed under the old law, so that rule didn’t apply.
The lesson for a defense team is that penalty arguments are built from evidence, not adjectives. According to the opinion, Glidewell told the trial court the violations were “hyper-technical.” What won the reductions was proof: the production sheets, the correction date, the per-employee underpayment figures, and the willingness to pay back wages.
Steps to take once a PAGA lawsuit is pending
- Keep the litigation hold in place on payroll data, wage statements, timekeeping records, and every version of the pay policies at issue, along with the records showing when each practice changed.
- Calendar the deadlines in the case and confirm whether an arbitration agreement or an employment practices liability (EPLI) policy affects the defense or requires notice to the carrier.
- Identify the payroll and HR staff who designed and later fixed each pay practice, and make sure no current employee who is part of the case faces any action that could look like retaliation.
- Pull the documents that prove good faith and correction: the date each fix went live, any supplemental pay documents employees received, back-pay calculations, and per-employee and per-pay-period underpayment figures.
- Talk to a lawyer before stipulating to liability, proposing a penalty figure, or making a settlement offer. The order of those moves affects both the penalty and the fee award.
PAGA judgments are often won or lost on the penalty phase, long after liability is settled. Experienced counsel defending employment lawsuits in California prepares that phase from the first month of the case, by tracking when each practice was corrected and what it cost employees.
If your company faces a PAGA judgment
If your company is facing a PAGA lawsuit where liability is likely and the fight is over penalties, the payroll history and the correction timeline usually decide how much the court awards. Rosenberger + Kawabata represents employers defending employment lawsuits and claims through its business litigation practice, including claims involving PAGA civil penalties. Contact Rosenberger + Kawabata online for a confidential consultation, or call (310) 894-6921.
Sources
The decision is Taduran v. James R. Glidewell, Dental Ceramics, Inc. (Cal. Ct. App., May 26, 2026, G064718, certified for publication June 17, 2026). The statute is Labor Code section 2699, subdivisions (e)(2), (f), (k)(1), and (o).
This post is general information about California and federal employment law as of November 7, 2026. It is not legal advice, and reading it does not create an attorney-client relationship. Employment statutes, regulations, and court decisions change often, and the outcome of any claim depends on its facts. Past results do not guarantee future outcomes.