Sep
12
2014
The California Supreme Court’s June decision in Iskanian v. CLS Transportation has thrust the Private Attorneys General Act (PAGA) back into the foreground of wage-and-hour class actions. The court held that despite a murderers’ row of anti-consumer, anti-employee/pro-business, pro-forced-arbitration decisions by the United States Supreme Court, the Federal Arbitration Act (FAA) does not preempt California law that prohibits waiver of PAGA claims. In other words, PAGA lawsuits can still be brought on behalf of large groups of workers, despite the fact that they have signed a class action waiver.
PAGA was passed in 2004 in the face of blistering opposition from the Chamber of Commerce, which spun the legislation as the “sue your boss bill.” Before suing your boss, however, PAGA requires a plaintiff to exhaust administrative remedies by notifying the employer of the alleged violations of the Labor Code. Notably, PAGA also mandates that 75% of any recovery of penalties goes back into the state’s coffers through the Labor and Workforce Development Agency (LWDA). Essentially, PAGA deputizes private attorneys to collect the state’s money for it from employers that have violated the law.
In the years immediately following the bill’s passage, many lawyers did not even allege PAGA claims and questioned the value of adding them to their case. Government involvement in the case might be complicated, especially for just a 25% share of the recovery. Much has changed in the ten years since the bill’s enactment. With class claims vanishing, PAGA claims may well provide the most potent (or only) leverage for workers pursing impact litigation.
With a decade of experience behind us, perhaps it’s time we begin studying PAGA’s impact. To this end, I sent a Public Records Act request to the LWDA for information about PAGA payments made to the State. What came back was interesting.
Through April 2013, the LWDA had collected $24,532,690.57 in PAGA penalties from 1,255 cases. The payments range from small ($4.15) to large ($614,280).
I’m certain there are others out there with the skill and inclination to analyze this data in ways I have not imagined, and my hope is that this will begin a meaningful dialogue about PAGA and its future.
Next week I will post the updated numbers I have received from April 2013-August 2014.
About Christian Schreiber
Christian Schreiber is a partner at Chavez & Gertler, where he works primarily on class actions involving employment and consumer rights, civil rights, and financial services matters.