Employers with operations both large and small in California are all too familiar with California’s Private Attorneys General Act (“PAGA”), the controversial statute that permits a single employee to stand in the shoes of the state’s attorney general and file suit on behalf of other employees to seek to recover penalties for alleged Labor Code violations.
The in terrorem effect of PAGA lawsuits, in which a plaintiff need not satisfy class certification criteria to represent an entire workforce, has led many employers to pay large settlements just to avoid legal fees and the possibility of larger awards, even when the evidence of unlawful conduct is spotty or entirely absent.
Will 2022 be the year that PAGA is repealed?
Maybe.
And maybe not.
It appears the fate of the much-maligned statute could be left in the hands of California voters if a proposed ballot initiative makes its way onto the next ballot.
The proposed ballot initiative effectively seeks to repeal PAGA and replace it with a new law called Fair Pay and Employer Accountability Act of 2022.
The Fair Pay and Employer Accountability Act of 2022 would provide a streamlined process to address claims – and larger potential recoveries for employees in the event they are treated unlawfully. Among other things, employees would receive 100% of any recovery, rather than just 25% under PAGA.
Who would be largely cut out of the process? The plaintiffs’ bar, which has benefited more than anyone from the statute — and which...
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