A business advocate organization and nearly 200 other groups are calling for California Gov. Gavin Newsom and state legislature to provide businesses with COVID-19 relief, to help prevent California businesses from fleeing to other states.
The California Chamber of Commerce and others in a Jan. 13 letter are, among several things, requesting legislators enact a policy to reform the Private Attorneys General Act (PAGA), that business interests argue subjects them to abusive lawsuits.
Through PAGA, employees may file civil lawsuits on behalf of themselves, other employees and the state of California for labor code violations.
“While employees should always be entitled to wages they earn, employers should not be subject to frivolous litigation under PAGA in which they are extorted by attorneys for layers of penalties for minor violations,” the letter said. “At a minimum, the legislature should temporarily suspend PAGA or eliminate the opportunity for lawyers to file these abusive lawsuits against employers who are already struggling from this pandemic. Employees should still be able to pursue claims before the Labor Commissioner and other agencies.”
The letter said that large companies are fleeing California because of the toll that PAGA has taken on employers in the last 10 years.
Victor Gomez, executive director of California's Citizens Against Lawsuit Abuse, told the Northern California Record that PAGA reform “can lead to substantial economic benefits.”
“There could not be a better time to alleviate small business owners from these out-of-control lawsuits,” Gomez, who is also president of Pinnacle Strategy, LLC, said.
Gomez said that PAGA lawsuits aren’t declining.
“Here in my hometown of Hollister, a well-known pizza franchise, one that constantly contributed to the community via sponsorships, contributions and more, have needed to cut back because they are in the midst of a PAGA suit that they are unsure what it will ultimately cost them,” Gomez said. “This directly impacts residents, as they need to fork over more money to keep benefiting nonprofits in good economic health or at least keep their heads above water.”
Gomez said Gov. Newsom should consider the issue, given the coronavirus pandemic and economy.