Resource
Mediation Preparation Guide
From Exposure Model to Settlement Authority
Mediation is where PAGA cases resolve.
The vast majority of PAGA cases settle at mediation. The quality of the defense presentation at mediation — not the quality of the legal arguments in the briefs — is what drives settlement outcomes. A mediator who sees a data-driven exposure model, a comprehensive remediation record, and a transparent settlement authority recommendation will value the defense position differently than a mediator who sees a one-page coverage letter and a blanket denial.
Post-Moniz requirements.
Under Moniz v. Adecco USA, Inc. (2021) 72 Cal.App.5th 56, PAGA settlements require court approval with documented investigation, a reasonable settlement amount relative to the PAGA penalty exposure, and a demonstration that the settlement serves PAGA's remedial purposes. The mediation presentation should anticipate Moniz requirements because the settlement approval motion will rely on the same evidence.
01
Pre-Mediation Timeline
Mediation preparation begins 30–45 days before the session. Each phase builds on the prior one.
Day -45
Finalize Exposure Model
Complete the three-scenario exposure model. Update violation rates with the latest discovery data. Apply all applicable reform provisions.
Pull final time records and payroll data.
Recalculate violation rates by category.
Apply penalty caps, anti-stacking, and standing limitations.
Prepare per-category exposure summary.
Day -30
Assemble Penalty Cap Evidence
Compile the 10-tab evidence binder documenting pre-notice compliance (15% cap) or post-notice remediation (30% cap).
Organize all remediation documentation by category.
Prepare timeline exhibit showing compliance actions with dates.
Draft officer declaration attesting to compliance efforts.
Day -21
Prepare Mediation Brief
Draft the mediation brief with a focus on the exposure model, reform mechanisms, and settlement range.
Three-scenario summary table.
Per-category analysis with data sources.
Reform mechanism application.
Settlement range recommendation with supporting rationale.
Day -14
Carrier Authority Submission
Present the exposure model and settlement recommendation to the carrier. Request settlement authority based on Scenario 2.
Cover memo explaining methodology and recommendation.
Three-scenario exposure summary.
Defense strategy assessment with litigation cost comparison.
Recommended authority range.
Day 0
Mediation Session
Present the defense analysis. Respond to plaintiff's demand. Negotiate within the authorized range.
Opening presentation: remediation record, exposure model, reform impact.
Demand analysis: identify inflated assumptions, challenge violation rates.
Counter-offer framework: data-driven range anchored to Scenario 2.
02
Three-Scenario Presentation
The exposure model is the centerpiece of the defense presentation. Present all three scenarios with the methodology and data sources visible.
Lead with the gap.
The most powerful moment in the mediation presentation is showing the gap between Scenario 1 and Scenario 2. When the mediator sees that the plaintiff's $840,000 demand assumes a 100% violation rate — and the actual data shows 20–35% — the plaintiff's leverage collapses. The data does the work.
03
Plaintiff Demand Rebuttal
Plaintiff's demands follow predictable patterns. Prepare rebuttals for each.
04
Moniz Settlement Approval Requirements
Every PAGA settlement requires court approval. The mediation should produce a settlement that satisfies Moniz requirements.
Reasonable investigation.
The settlement must reflect an adequate investigation of the PAGA claims. Document the discovery conducted, the time records reviewed, and the analytical methodology employed. Kullar v. Foot Locker requires sufficient investigation to evaluate the claims.
Reasonable amount.
The settlement amount must be reasonable relative to the total PAGA penalty exposure. Present the three-scenario exposure model showing that the settlement falls within the data-driven range.
PAGA purposes served.
Under Moniz's three-part purpose test: (1) remediation — has the employer corrected the violations? (2) deterrence — does the settlement deter future violations? (3) enforcement maximization — does the settlement advance the enforcement purpose of PAGA?
35/65 split.
Post-reform, the employee share is 35% and the LWDA share is 65%. The settlement must allocate accordingly. Pre-reform matters use the 25/75 split.
LWDA review.
Under § 2699(s) and proposed regulations, the LWDA has authority to review proposed PAGA settlements. Build a 45-day LWDA review period into the settlement timeline.
Attorney fees.
Plaintiff's attorney fees are separate from the PAGA penalty recovery. Document the lodestar, the fee percentage, and the reasonableness relative to the recovery.
Build the approval motion at mediation.
Every element of the Moniz analysis should be addressed during mediation negotiations. The settlement terms, the investigation documentation, and the remediation record form the foundation of the approval motion. If these elements are not established at mediation, the approval motion will be weak.
05
Post-Mediation Documentation
Whether the case settles or not, the mediation produces documentation that supports the next phase.
Key Authorities
Moniz v. Adecco USA, Inc. (2021) 72 Cal.App.5th 56
PAGA settlement approval requirements
Kullar v. Foot Locker (2008) 168 Cal.App.4th 116
Adequate investigation requirement for settlement approval
Lab. Code § 2699(m)
35% employee / 65% LWDA split (post-reform)
Lab. Code § 2699(s)(2)
The superior court reviews and approves the settlement; the proposal goes to the agency at the same time it goes to the court
Lab. Code § 2699(g)(1)
15% penalty cap
Lab. Code § 2699(h)(1)
30% penalty cap
Lab. Code § 2699(i)
Anti-stacking — bars a derivative penalty stacked on the underlying unpaid wage violation: §§ 201–203 unconditionally, § 204 unless willful or intentional, § 226 unless knowing or intentional or a failure to provide a wage statement
For illustrative and educational purposes only. Settlement negotiations and court approval requirements involve case-specific analysis.