Two CA Organizations Pour Money Into the Repeal of the Private Attorneys General Act

Two CA Organizations Pour Money Into the Repeal of the Private Attorneys General Act
03-30-2022 CABIA Rally on the SCOTUS Steps (Credit: Jennifer Oliver O’Connell)

As RedState reported last week, the Private Attorneys General Act (PAGA), an 18-year-old law that has benefited trial attorneys and done untold damage to businesses throughout the state, could be ready to fall.

PAGA has been used as a blunt instrument to bludgeon small business, taking countless hours away from the business owner’s management of their company, costing them millions of dollars in attorneys fees, administrative “fixes,” and payouts, and squelching the employer’s ability to hire quality staff and manage their workforce and workforce relations as they see fit.

Most egregiously, PAGA has been used by attorneys to enrich themselves, as they make an end-run around any arbitration agreement between the employee and employer. Employees of California companies have used PAGA to file suit against their employers, despite having these agreements in place.

The case of Viking River Cruises, Inc. v. Moriana seeks to cut PAGA off at the knees by answering whether the Federal Arbitration Act (FAA) and any decisions that have supported it can be used to enforce these agreements and prevent an employee from raising representative claims under PAGA.

In December 2021, the Supreme Court of the United States granted review of the PAGA-related case Viking River Cruises Inc. v. Moriana, and oral arguments were heard on March 30, 2022. RedState covered the Rally organized by the California Business and Industrial Alliance (CABIA), an advocacy group for the reform and/or repeal of PAGA, as well as the SCOTUS arguments that day. Since then, two vocal California business groups and one private citizen have poured some major cash into the campaign to see PAGA gone.

Days before and after the SCOTUS oral arguments, the Western Growers Association, the California Chamber of Commerce, and private company Nichol’s Pistachio contributed $450,000, and $10,000 respectively to the campaign to get the California Fair Pay and Employer Accountability Act (CFPEAA) on the November 2022 ballot.  If approved by California voters, the CFPEAA effectively repeals PAGA by eliminating the ability to pursue civil penalties via a representative action.

From local KGET:

Now, the effort to get a reform initiative — called The California Fair Pay and Employer Accountability Act — on the ballot this November is gaining steam.

President of the California Chamber of Commerce Jennifer Barrera spoke to 17 News about the changes the chamber hopes to enact with the new initiative.

“We are basically taking trial attorneys out of the equation and we’re giving the money directly to the employees,” Barrera said. “It reforms PAGA, so it eliminates the lawsuits (and) it gives employees a more effective and efficient process to have their wages determined through the state agency.”

Both the California Chamber of Commerce and the Western Growers Association have fought and advocated to see PAGA reformed or removed. In support of the CFPEAA, Western Growers President and CEO Dave Puglia said,

“This measure also protects small businesses that are complying with labor laws and makes it easier to do so. Family farmers cannot afford to be subjected to the shakedown lawsuits that PAGA has unleashed.”

The California Chamber also encouraged that the initiative could reform PAGA by giving more mechanisms to the Labor and Workforce Development Agency to have the power to enforce the labor code themselves.

Which, frankly, is how it should be. Tasking employees with little knowledge of the Labor Code was ripe for manipulation and fraud, and the plaintiffs bar knew this.

California Chamber President Jennifer Barrera said that 60 percent of the signatures needed to get the initiative on the ballot have been obtained. The proponents have until June 6, 2022 to collect the needed 40 percent of required signatures.

Should the SCOTUS Justices rule in favor of Viking River Cruises, Inc. and the CFPEAA initiative make it onto the November ballot, it could be the one-two punch needed to knock out the PAGA law.

Editor’s note: the article was edited after publication to make a correction. “Nichol’s Pistachio” is a company, not an individual.

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