Viewing blog posts written by Gino DiCaro

Group files lawsuit against the State over PAGA

Posted by Gino DiCaro, VP, Communications on June 18, 2019

by Tom Manzo -- CABIA

If you are not familiar with PAGA, it stands for the Private Attorney General Act. It was enacted in 2004 and California is the only state in the union that has such a law. These lawsuits are comprised of late lunches, miscalculated incentives or bonuses, inaccurate employee ID numbers, and just about any labor law violation. PAGA deputizes each and every current and former "aggrieved employee" to sue to recover civil penalties on behalf of the State.

The California Business & Industrial Alliance (CABIA) filed a complaint last month against the state to try to fix the situation for everyone involved.

The facts couldn’t be clearer: Rather than helping employees, PAGA has transferred the state’s power to private attorneys who operate for their own personal gain. PAGA was conceived as a means to help employees right workplace wrongs without further burdening the state bureaucracy. Trial attorneys quickly discovered that they could use the law for their own benefit; the penalties from small workplace clerical errors, multiplied across dozens or hundreds of employees, provide big paydays from the plaintiffs’ representatives with minimal effort.

Today, thousands of PAGA complaints are filed annually against large and small businesses, nonprofit charities and even labor unions. The state’s Department of Industrial Relations maintains a database of more than 35,000 PAGA notices filed by trial attorneys between 2004 and present day. The growth in PAGA notices has been astronomical. Between 2004 and 2008, the number of annual PAGA notices more than tripled; between 2008 and 2015, the number of notices tripled again. In 2016, more than 5,000 PAGA complaints were filed — an astonishing 1,440 percent increase from the law’s first year in effect.

Consider a few recent examples: An October 2018 settlement with retail giant Walmart results in $21 million for the attorneys, and a check average of $108 each for the employees; a January 2018 settlement with Uber netted $2.3 million for the lawyers, and $1.08 each for the drivers. And in a $1 million settlement with Google, the attorney got $330k and each employee got $15.50. In our complaint it shows that an error of 2 minutes a day over the course of the year would short the employee $ 28.61 and the penalties would be over $ 69,000. Imagine if you had 30 employees or more?

Labor unions aren’t immune: The United Farm Workers union got hit with a PAGA complaint that cost it $1.3 million — money that is being taken from the dues of farm workers. The Humane Society has been hit; so have the Children’s Homes and the Salvation Army. Even our governor-elect, Gavin Newsom, had a series of PAGA complaints filed against his company PlumpJack Management Group. CABIA's lawsuit isn’t about letting companies skate on wrongdoing; rather, they want the state to do its job and enforce labor law violations.

Tags: PAGA

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