As the California Supreme Court prepares to rule on Adolph v. Uber – a case involving claims under the Private Attorneys General Act, a law exclusive to California that was recently curbed by the U.S. Supreme Court – a new friend of the court brief asks the state for more oversight to deter PAGA abuse, which they say is simply being used to enrich trial lawyers at the expense of California employers.
The amicus brief was filed last month as the first act of Stop Small Business Shakedowns, a committee of Californians for Fair Pay and Employer Accountability.
“We ask the California Supreme Court not to broaden PAGA beyond the legislature’s intent when it was enacted because a broad ruling would increase shakedown lawsuits against businesses without any benefit to the employees,” Jennifer Barrera, President & CEO of the California Chamber of Commerce and executive committee member of the Stop Small Business Shakedowns effort, said in an email response to the Northern California Record.
Jennifer Barrera
| https://advocacy.calchamber.com/bios/jennifer-barrera/
The amicus brief argues the state Supreme Court has established the appropriate framework with its 2006 decision in State ex rel. Harris v. PricewaterhouseCoopers, LLP.
Lawsuits against businesses under the PAGA law have increased exponentially since the law was signed by outgoing Gov. Gray Davis in 2003, and rose even more after the state Supreme Court’s Iskanian decision in 2014.
“PAGA has cost businesses of all sizes $8 billion over the last seven years in settlements alone and is set to double in the next five years, but it’s the mom-and-pop businesses that are forced to close their doors because they can least afford the legal battle,” Barrera said. “Mind you, PAGA has not helped businesses comply with our complex labor code spanning more than 1,000 pages and workers see worse outcomes under PAGA when compared to the independent Labor Commissioner’s office. PAGA has simply enriched trial attorneys to the detriment of small businesses and workers.”
A coalition news release outlines its goals to amend PAGA.
“Our coalition has joined together in our commitment to reform the PAGA, either in the Legislature or at the ballot, and, in the meantime, encourage sound judicial interpretation of PAGA until such reform is passed,” Barrera said. “This case could be especially harmful and costly depending on the interpretation of how the PAGA claim will be handled – for businesses and workers alike – and we wanted to bring those unintended consequences to light for the Court.”
The California Supreme Court is expected to issue its decision in Adolph v. Uber in the coming months.
“We hope the California Supreme Court will abide by the U.S. Supreme Court’s holding in Viking River Cruises v. Moriana and leave PAGA to be handled by the Legislature or ultimately the voters who will vote on the ballot initiative reform in 2024,” Barrera said.
The California Secretary of State announced last summer that the initiative had qualified.
“The good news is that California voters will have the option to reform this law with the California Fair Pay and Accountability Act initiative on the 2024 ballot,” Barrera said. “The ballot measure would place wage and hour claims back into the hands of our independent regulator, give workers 100% of penalty payments, and protect access to the courts if employees are unsatisfied with the regulator’s decision.”