As California lawmakers reach the end of a legislative session shortened due to the COVID-19 pandemic, a proposal that could reform the PAGA (Private Attorneys General Act) is on the table for consideration.
“It’s trying to get PAGA exemption for employees working from home, so an employee while working from home can’t file PAGA claims on meal and rest breaks,” Tom Manzo, founder and president of the California Business and Industrial Alliance (CABIA), told the Northern California Record.
An Aug. 25 amendment to SB 729, sponsored by Sen. Anthony Portantino, D-Pasadena, would add a section to the California Labor Code that states an employee shall not recover civil penalties on meal and rest break cases when working remotely. It would be retroactive from March 19, 2020, and continue through Dec. 31, 2022.
The measure, which is before the Senate Committee on Labor and Employment, could advance recent action from the First Appellate District, which in Robinson v. Southern Counties Oil Co., the court ruled against serial filers under the controversial 2004 law.
“This case may have a significant impact on future PAGA litigation because it addresses a common PAGA abuse head-on,” Amy Patton, lead attorney for the defendant, stated on the Payne & Fears website. “Companies that see multiple PAGA claims covering the same time period may use this case to attack later-filed PAGA claims at the pleading stage. This would significantly reduce the settlement value of these lawsuits.”
PAGA allows suits against employers on behalf of workers for alleged infractions of California labor laws, and has been criticized as overly incentivizing for plaintiff attorneys.
Manzo noted that in a Second Appellate District ruling -- issued Aug. 25 in Starks vs. Vortex Industries Inc. – the bulk of the settlement went to the plaintiff’s attorney:
- Total paid by employer: $675,000
- Total to lead employee: $10,000
- Total to California Labor and Workforce Development Agency: $18,750
- Total to all employees: $16,250; average paid to each employee $30
- Total to plaintiff attorney: $630,000
“The attorney is getting $630,000 out of a $675,000 case. What’s wrong with this picture?” Manzo said.
“I have to give Senator Portantino credit for trying to do something. We need more people to get off the sidelines and start to try to really reform this law,” Manzo added.
The onset of the coronavirus pandemic has not deterred PAGA claims; the CABIA case tracker counts more than 3,000 filed since March.
CABIA took out a full-page ad in the Aug. 26 USA Today edition serving the Los Angeles area represented by state Senate Majority Leader Bob Hertzberg, urging him to support PAGA reform.
“We need someone to stand up and do something about it,” Manzo said.