SACRAMENTO - The
state’s Private Attorney General Act (PAGA) is in need of amending, according
to civil justice reform advocates.
The 2004 law –
which gives any private citizen the right to act as an attorney general in any
municipality or county - was enacted to prevent employers from shorting workers’
pay and other labor law violations.
But now, its use is
“out of control,” according to Kim Stone, president of Civil Justice
Association of California (CJAC).
Stone said she
supports legislation introduced by Assembly woman Shannon Grove
(R-Bakersfield), designed to limit PAGA lawsuits, also known as "Sue Your
On Wednesday, the
Assembly Labor and Employment Committee was scheduled to hear a slate of reform
measures - Assembly Bills 2461, 2462, 2463 and 2464.
Grove said that PAGA
laws were initially introduced as a “fundraising” mechanism for the state, but
they have since been transformed into a “personal lottery” for many private
After penalties are
collected, 75 percent of funds go to the State of California's Labor and
Workforce Development Agency and 25 percent goes to the employee who brought
laws benefit a lot of Los Angeles lawyers who come in from other districts to
legally rape and pillage business owners in my district," Grove said.
thousands upon thousands of PAGA cases statewide and it is absurd litigation. I
have talked to several attorneys for a real-world perspective of these cases
and they agree that it is absurd litigation."
A Sacramento attorney
who defends employers said he believes that PAGA “creates more problems than it
I am defending are of very technical of nature and minor details about
paperwork or process that are damaging small businesses that are paying large
settlements," said Chuck Post, chairman of Labor and Employment for
Weintraub & Tobin.
For example, he
said that minor details forming the basis of a lawsuit are often wage statements,
Post added that any
discrepancy including an address mistake in the parent company's printed
headquarters or any other typographical error can result in a PAGA lawsuit from
a current or former employee.
Bill 2461 would limit PAGA lawsuits to violations of meal, rest, rest recovery
periods, overtime or overtime pay and meal breaks after five and 10 hours.
These are violations that directly affect the employee's welfare and do not
jeopardize the financial future of a small business or corporation all over
small technicalities, many of which are printing errors.
"The idea is
to limit scope to show harm," Grove said.
Bill 2462 would allow the business owner or corporation the right to cure any
violation of the labor code before the employee can bring a civil action. The
time for adjustments can save businesses thousands and even millions of dollars
over minor violations.
period is definitely needed to adjust to a law that has really gotten out of
control," Stone said. "We fully support this bill because it
addresses a longtime problem that needs to be addressed."
Bill 2463 would cap the penalty of a violation at $1,000 per violated employee.
Currently, violations can have penalties of up to $100 and $200 per employee
per pay period, which can multiply fast and cost employers six figures or even
over a million dollars at a quick rate.
not getting the money from these judgments the lawyers are the
beneficiaries," Grove said. "Then you end up with scenarios like
1,000 employees splitting $250,000."
final assembly bill, may have the most reach and influence. Assembly Bill 2464
would authorize a court to dismiss an action if, after notice and hearing, the
court finds that the aggrieved employee suffered no appreciable physical or
This bill would
address the constant problem of businesses being targeted by employees over
misprints and typographical errors on their paychecks, paystubs or direct
deposit forms, Grove said. Combined with Assembly Bill 2463, it would eliminate
the practice of a misprint or typographical error being multiplied over hundreds
or thousands of employees over multiple pay periods costing a business millions
of dollars in litigation payment over no real reason.
employees under abuse or employers to get away with things," Grove said.
"I believe that everyone should work in good faith to eliminate these
agrees that PAGA as it is currently constructed does not exhibit the necessary
efficiencies that it was intended to have when it was implemented as law.
and cost of defending the lawsuit is catastrophic to many business
owners," he said. "The unimportant parts of this law really need to
be identified and changed."
Discussion of PAGA
laws on Wednesday and identification of the issue by Gov. Jerry Brown gives
Grove hope that the efficiencies could be cleaned up and implemented in the
second half of 2016.
drastically reduce someone getting fired and running to a lawyer for no
reason," Stone added. "And that benefits all Californians."