A new law to exempt certain janitorial workers from the Private Attorneys General Act (PAGA) demonstrates a significant effort to address a mandate that costs some companies millions in legal fees.
SB 646, which was introduced early in the legislative session as an electricity management bill, over the summer was changed to a PAGA exemption measure put forth by Senate Majority Leader Bob Hertzberg, D–Van Nuys.
The legislation sends a message regarding the support of the unionized workforces in California, Jason Marsili, an adjunct professor at the USC Gould School of Law and partner at Rosen Marsili Rapp LLP, told the Northern California Record.
“The legislature was willing to grant an exception in the context of janitorial services if those workers were subject to the protections of a valid collective bargaining agreement,” Marsili said. “Sometimes that legislative fix is more cost effective for companies than continuing to engage in projected litigation.”
ABM Industries, the largest janitorial services firm in the country, sponsored the measure which exempts union janitorial employees from filing PAGA litigation against their employers.
It is the second time a PAGA exemption has been granted through the gut-and-amend process. The first was in 2018, when a bill that started as an urban water management measure, became a PAGA exemption law for unionized construction workers. The Senate Judiciary Committee analysis of that bill noted that while construction industry employers had argued they were targeted by frivolous PAGA lawsuits, “It is not hard to imagine employers in many other sectors making the same argument.”
PAGA cases may be resolved through the courts, or by filing directly with the Labor and Workforce Development Agency (LWDA).
In a July lawsuit settlement, ABM agreed to pay out $140 million including the resolution of PAGA claims.
Gov. Gavin Newsom signed SB 646 on Sept. 27.
The Senate Floor Analysis for SB 646 includes an opposition argument from the California Business and Industrial Alliance (CABIA), which has commissioned a study on PAGA case outcomes, including amounts paid to employees who filed with the LWDA or in the court system.