California’s recent issues with processing jobless benefits has prompted a local business group to take out a full-page ad in the Wall Street Journal that questions whether state Labor Secretary Julie Su should be considered a candidate for U.S. Secretary of Labor.
State prosecutors late last month said the California Employment Development Department (EDD) has been defrauded of millions due to fake unemployment claims, some of them filed by prisoners on Death Row, while legitimate claims have been delayed.
The California Labor and Workforce Development Agency, headed by Su since 2019, oversees the EDD, which manages unemployment claims.
The California Business and Industrial Alliance (CABIA) ran the ad in the Journal’s Dec. 4 Washington, DC, edition, a CABIA news release said.
“Unions are thrilled at the prospect of installing a close ally at the DOL, who can import California's worst ideas (e.g. PAGA) to Washington, DC,” CABIA founder and president Tom Manzo said in a statement.
California’s PAGA – Private Attorneys General Act – allows suits against employers on behalf of workers for alleged infractions of state labor laws, and has been criticized as overly incentivizing for plaintiff attorneys.
In the Santa Clara Law Review, editor Ivan Muñoz recently proposed, “greater judicial oversight in PAGA lawsuits—particularly so in the settlement phase, where oftentimes plaintiff’s attorneys use PAGA claims as a tool to leverage large settlements.”
A recent appeals court decision held that employees cannot opt out of one PAGA settlement and then file the same claims in another PAGA case, a ruling which Manzo described as encouraging because it should deter the filing of excessive litigation.
“Overall, good for employers because it confirms only one PAGA action for same alleged violations,” Manzo told the Northern California Record.
CABIA is currently in the appeals process with its own lawsuit challenging the constitutionality of PAGA.
“The goal would be to overturn PAGA,” Manzo said. “Our alternate goal would be that the state should enforce the law – not private attorneys.”
Separation of powers is one of the arguments CABIA has put forth in its appeal.
“This is a non-partisan issue that affects not only employers, it affects non-profits too,” Manzo said. “This year alone there have been over 6,000 PAGA notices sent out and many notices to businesses that have been gravely affected by Covid.”