As new bills get debated this legislative session, key provisions to help small businesses have seen a measure of success, but questions remain about protections for them from frivolous litigation.
The PAGA (Private Attorneys Generals Act), which has been criticized as enriching to plaintiff’s attorneys while barely remunerating the plaintiffs themselves, could see some reform this session through two different bills, John Kabateck, California state director with the National Federation of Independent Business (NFIB) told the Northern California Record.
AB 385, sponsored by Assemblymember Heath Flora, R-Ripon, would create certain filing requirements before a PAGA claim could be brought, while AB 530, from Assemblymember Vince Fong, R-Bakersfield, would provide notice requirements for PAGA cases, including 33 days for an employer to cure an alleged violation before civil action could be brought.
“I would say we’re cautiously optimistic that these will be heard in committee,” Kabateck said. “But it’s not certain, which tells us this sort of reform for small businesses is low if not absent on the priority list of politicians that talk the talk but don’t always show the action to back it up.”
AB 247, which would provide a safe harbor to small businesses from unwarranted litigation amid the COVID-19 pandemic, has not been put on the Assembly Judiciary Committee calendar.
Passing laws that promote economic recovery – and changing those that lead to excessive litigation – has become more vital as small businesses seek to reopen amid the health and economic uncertainties of the COVID-19 pandemic, Kabateck said.
A coalition letter sent to Gov. Gavin Newsom and legislative leaders earlier this year specifically asks for PAGA relief.
“AB 530, in my opinion, should be a no-brainer for Democrats and Republicans alike in the Legislature,” Kabateck said. “More than a decade ago, both parties joined together to approve reform for ADA (American with Disabilities Act) litigation, particularly giving small businesses right to correct periods, and AB 530 would very closely replicate what Democrats and Republicans approved for ADA.”
That bill became law in 2012.
As shown time and again prior to ADA reform, one costly frivolous lawsuit can put a small business out of business forever, Kabtateck said.
“We hope the Legislature does the right thing and puts these on committee calendars so they get the right discussion they deserve,” Kabateck said.