California continues to be the nation’s most challenging legal environment for employers. The challenge has been all the more vexing in recent years due to new legislation and rapidly unfolding case law, particularly with respect to the Private Attorneys General Act (PAGA). California’s Labor Code is frequently more stringent than FLSA, presenting distinct and complex compliance issues and a harsh environment for defending wage and hour class actions. PAGA continues to be a particular thorn for California employers, as does the Golden State’s controversial AB 5.
Enacted in 2004, PAGA dramatically increased the risk of significant exposure for employment violations and launched an ever-rising wave of litigation against California employers. The qui tam-like statute empowers private citizens to enforce the Labor Code, ostensibly to shore up compliance in the face of limited state government enforcement resources, by seeking monetary relief on behalf of similarly situated employees.
A series of court rulings over the years has lowered barriers for employees to bring claims and has added to the allure of such lawsuits for the plaintiffs’ bar. These rulings determined that class certification requirements do not apply to PAGA actions; that employees cannot, by entering into mandatory arbitration agreements, waive the right to bring a PAGA claim in court; and that plaintiffs have broad rights to information through the discovery process bringing a...
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