RedState last week reported that the Private Attorneys General Act, an 18-year old law which has benefitted trial lawyers and caused untold harm to business throughout the state could soon be repealed.
PAGA has been used as a blunt instrument to bludgeon small business, taking countless hours away from the business owner’s management of their company, costing them millions of dollars in attorneys fees, administrative “fixes,” and payouts, and squelching the employer’s ability to hire quality staff and manage their workforce and workforce relations as they see fit.
The most egregious use of PAGA by lawyers to gain their wealth is when they circumvent any arbitration agreements between employees and employers. California employees have filed suit against their employers using PAGA, even though they had these agreements.
In the instance of Viking River Cruises, Inc. v. Moriana seeks to cut PAGA off at the knees by answering whether the Federal Arbitration Act (FAA) and any decisions that have supported it can be used to enforce these agreements and prevent an employee from raising representative claims under PAGA.
December 20,21 saw the Supreme Court of the United States grant review of the PAGA case. Viking River Cruises Inc. v. MorianaOral arguments were heard March 30th, 2022. RedState reported on the rally organized by California Business and Industrial Alliance, an advocacy group for reform and/or removal of PAGA. It also covered the SCOTUS arguments. Two California-based business organizations and one individual have contributed significant cash to the PAGA repeal campaign.
More big $$$ flowing in to repeal PAGA, which lets Californians sue employers: $450K apiece from CalChamber and Western Growers, hundreds of thousands more from agricultural playershttps://t.co/wpGFIuEOBI
— Jeremy B. White (@JeremyBWhite). April 5, 2022
The Western Growers Association and California Chamber of Commerce donated $450,000 and $10,000 to the campaign to bring the California Fair Pay and Employer Accountability Act to the November 2022 ballot. The CFPEAA will effectively abrogate PAGA by removing the possibility to seek civil penalties through a representative action if it is approved by California voters.
Now, the effort to get a reform initiative — called The California Fair Pay and Employer Accountability Act — on the ballot this November is gaining steam.
Jennifer Barrera is the President of California Chamber of Commerce. She spoke to 17 News regarding the reforms the chamber plans to implement with this new initiative.
“We are basically taking trial attorneys out of the equation and we’re giving the money directly to the employees,” Barrera said. “It reforms PAGA, so it eliminates the lawsuits (and) it gives employees a more effective and efficient process to have their wages determined through the state agency.”
The California Chamber of Commerce as well as the Western Growers Association fought for PAGA reform or removal. Western Growers CEO Dave Puglia stated that he supports the CFPEAA.
“This measure also protects small businesses that are complying with labor laws and makes it easier to do so. Family farmers cannot afford to be subjected to the shakedown lawsuits that PAGA has unleashed.”
California Chamber suggested that this initiative reform PAGA and give more mechanisms to Labor and Workforce Development Agency in order to be able to enforce labor codes themselves.
This, in my opinion, should be the case. It was easy to manipulate and commit fraud by assigning workers with limited knowledge of the Labor Code. The plaintiffs bar also knew this.
Jennifer Barrera, President of California Chamber, stated that 60% of signatures required to put the initiative on the November ballot had been collected. Proponents will have to gather the required 40 percent signatures by June 6, 2022.
If the SCOTUS Justices decide in favor of Viking River Cruises, Inc., and the CFPEAA Initiative make it to the November ballot, this could be the two-punch needed to defeat the PAGA law.