Sacramento Democrats knew the law to allow a group of employees to sue was illegal. But, that did not stop them from costing businesses and hence millions of dollars—and forcing some firms to leave this crazy State.
“: The U.S. Supreme Court on Wednesday handed California employers a victory by limiting a unique state labor law called the Private Attorneys General Act, or PAGA. The law enables workers to help enforce California’s labor laws, such as minimum wage and overtime pay, by collectively suing their employers for labor violations in the name of the state.
The court ruled that workers who have signed arbitration agreements — job contracts that bar them from suing their employers and require them to settle disagreements through a private third party — with specific language cannot bring claims to court using PAGA.”
Uncertainty and union corruption is forcing firms to leave this anti-business State. I do not blame them.
Emily Hoeven, CalMatters, 6/16/22
From CalMatters economy reporter Grace Gedye: The U.S. Supreme Court on Wednesday handed California employers a victory by limiting a unique state labor law called the Private Attorneys General Act, or PAGA. The law enables workers to help enforce California’s labor laws, such as minimum wage and overtime pay, by collectively suing their employers for labor violations in the name of the state.
The court ruled that workers who have signed arbitration agreements — job contracts that bar them from suing their employers and require them to settle disagreements through a private third party — with specific language cannot bring claims to court using PAGA.
- Attorney General Rob Bonta: “PAGA strengthens California’s ability to tackle labor violations. While today’s decision is disappointing and adds new limits, key aspects of PAGA remain in effect and the law of our state.”
- Tom Manzo, president of the California Business and Industrial Alliance, a trade organization dedicated to changing PAGA: “We are grateful to the Court for hearing our arguments and rightfully ruling that businesses and employees should be allowed to resolve their disputes bilaterally and through arbitration, rather than through abusive, and often frivolous PAGA lawsuits.”
Nevertheless, the court seemingly left the door open for the California Legislature to make changes that would allow employees bound by arbitration agreements to still bring PAGA claims to court on behalf of a group of workers — or for California courts to correct the high court’s understanding.
- Justice Sonia Sotomayor wrote in a concurring opinion: “Of course, if this Court’s understanding of state law is wrong, California courts, in an appropriate case, will have the last word. Alternatively, if this Court’s understanding is right, the California Legislature is free to modify the scope of statutory standing under PAGA within state and federal constitutional limits.”
- State Sen. Dave Cortese, a San Jose Democrat and leader of the Senate Labor, Public Employment and Retirement Committee: “We are still studying the Supreme Court ruling, and I am prepared to author legislation to respond; I believe that this ruling has provided a roadmap as to how we can create for employees a new pathway to legal standing as well as safeguard the protections that state law puts in place for our workers.”
- But voters could ultimately have the last word: An initiative to repeal PAGA is likely to soon qualify for California’s 2024 ballot.
