This opinion piece originally ran in Cal Matters and features research from a CABIA Foundation report regarding the Private Attorneys General Act (PAGA).
An issue gaining prominence in the business community – destructive lawsuits filed against businesses and other entities under the Private Attorneys General Act, known as PAGA – echo a California political and policy upheaval from nearly 20 years ago, the major effort to reform the state’s workers’ compensation system, in which I played a role.
The goal of the PAGA law was to set up an external mechanism outside the state Division of Labor Standards Enforcement to allow employees to seek redress for labor code violations shortchanging workers of proper remuneration. However, over the past two decades a host of attorneys have discovered a quick payday by threatening businesses and even nonprofit entities with big-dollar lawsuits. Executives often choose to settle the threat rather than face the uncertainty of court action.
Often minor violations of the complex 1,000-page labor code spur expensive lawsuits that threaten to close down businesses.
As occurred with the workers’ compensation revolt, the business community is joining together to support reforms to the Private Attorneys General Act. The business ideas would relieve financial pressures, block threatening lawsuits and also improve the outcomes of employees who seek recompense through state agencies responsible for workers’ welfare.