Governor Signs Private Attorneys General Act Reform

Brian GermanAgri-Business, Labor and Immigration, Legislative

Governor Gavin Newsom has signed Senate Bill 92 and Assembly Bill 2288 to reform the Private Attorneys General Act (PAGA). These reforms aim to help workers get fair compensation while reducing frivolous lawsuits that harm businesses and employees. The Fix PAGA Coalition notes that PAGA lawsuits have resulted in nearly $10 billion in awards since 2013. However, high attorney fees have prevented workers from receiving much of that total. Organizations that represent employers have been working tirelessly for several years to bring reforms to PAGA.

Private Attorneys General Act
COURTESY: Western Growers

“This will constitute the only significant reform of the Private Attorneys General Act of California since it was passed in 2004,” said Dave Puglia, President and CEO of Western Growers. “Having a qualified ballot measure sitting out there in November helped create some leverage for us to negotiate a meaningful package of reforms that will I think greatly reduce the pain suffered by employers in all sectors of this state who have been shaken down by some really sleazy trial lawyers who’ve abused the intent of that law to enrich themselves. So, I’m very excited about this.”

The Fix PAGA coalition reports that key PAGA reforms include increasing the workers’ share of penalties to 35 percent and requiring plaintiffs to have personally experienced the violations within the past year. Penalties are also capped for employers who proactively or reactively comply with the Labor Code and are being reduced for minor violations. Employers paying weekly are now penalized more fairly and new penalties are being introduced for malicious employer actions.

“In talking to several private attorneys who have long been working in the trenches, defending employers against these shakedown PAGA lawsuits; when I tell them I think we’re going from a 10 on the scale of pain – if it’s a 1-10 scale – down to six with these reforms, most of them have told me ‘You’re too conservative. It’s better than that,’” Puglia explained. “One said, ‘This isn’t just a good deal, this is a great deal. Take it.’ So, I’m really optimistic about what this means for employers in all sectors of the economy.”

The reforms expand the list of curable Labor Code violations, providing a better right-to-cure process and early court resolutions. The changes also allow the California Department of Industrial Relations to expedite hiring and improve claim enforcement. Additionally, courts can now limit the scope of claims and evidence in trials and provide injunctive relief.

Brian German
Ag News Director / AgNet West