The Sacramento Business Journal has posted an op-ed by FBAC Chairman Ken Monroe highlighting the need to enact further reforms to the Private Attorneys General Act (PAGA). The piece is behind the SBJ’s paywall, but if you’re not a subscriber here’ are the first few paragraphs:
Last June, the business community, legislators, trial lawyers and Gov. Gavin Newsom reached an agreement to reform California’s onerous Private Attorneys General Act.
PAGA, as it is universally called, was signed into law by former Gov. Gray Davis after he was recalled in 2003. It allows individual employees to file suits on behalf of the state over allegations that labor laws have been violated.
Over the years, it became a gold mine for trial lawyers who file thousands of lawsuits against employers while providing little benefit to employees.
Unfortunately, while some of last year’s reforms have been positive — employees now receive more of any settlement, while employers have an expanded right to cure any violations — it hasn’t stopped the deluge of PAGA lawsuits. In fact, California is on pace to have more than 9,000 PAGA lawsuits this year, more than before the reforms went into effect.
Clearly, further reforms are needed now.
Monroe said it was encouraging that the state’s Labor and Workforce Development Agency has caused a particularly egregious law firm to refile more than 130 suits, and said the best solution is for the state to finally provide funding to the agency to enforce labor laws in a timely fashion. Absent that, he suggested compensating private lawyers at the same rate as state attorneys to remove the windfall financial incentives.
PAGA is one of the biggest problems affecting family businesses in California and FBAC will continue its efforts to really reform the law once and for all.
Subscribers can read the entire piece here.