California’s ‘private attorney general’ law is constitutional, court rules

  • Trade group says state must monitor worker lawsuits
  • But state law already provides for it, the appeals court ruled.

(Reuters) – A California appeals court has rejected a business group’s claim that a single law allowing workers to sue their employers on behalf of the state is unconstitutional.

A unanimous three-judge panel of the California Court of Appeals, Santa Ana Fourth Appellate District, ruled on Thursday that the state’s Private Attorneys General Act (PAGA) does not violate the constitutional separation of powers because it prohibits workers from suing until they have notified the state of their claims and officials died filing their own complaint.

The California Business & Industrial Alliance (CABIA), which represents small and medium-sized businesses, had argued that PAGA violated the state constitution because it lacked a mechanism for the executive branch to oversee and regulate. intervene in prosecutions.

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The Fourth District said that claim had already been denied by the California Supreme Court in Iskanian v. CLS Transportation Los Angeles LLC in 2014, and rejected CABIA’s attempts to distinguish that case from its own challenge.

CABIA President Tom Manzo said in an email that it was regrettable that the court did not recognize the harm caused by PAGA to employers and that CABIA was considering an appeal.

“The court ignored the fact that the executive branch reviews less than one percent of all PAGA notices,” he said.

The California attorney general’s office, in a statement, said it was satisfied with the decision and added that PAGA is a vital part of the state’s efforts to protect workers’ rights.

The U.S. Chamber of Commerce backed the challenge in a December amicus brief, saying California companies have faced a recent burst of PAGA lawsuits and have often been forced to settle baseless cases, forcing many to lay off employees or shut down altogether.

The PAGA, which was passed in 2004, allows workers to bring certain wage law claims against their employers on behalf of the state and retain 25% of any penalties they obtain.

The law has become a crucial tool for workers since the Iskanian decision, which said PAGA claims can remain in court even when the workers bringing them have signed agreements to take legal disputes with their employers to arbitration. individual.

The U.S. Supreme Court last month overruled key position in Iskanian, saying workers cannot use PAGA to circumvent arbitration agreements, but did not respond to the court’s separate finding California Supreme Court that the PAGA did not violate the constitutional separation of powers.

CABIA made this claim in its 2018 lawsuit against the state.

The Fourth District rejected this argument, finding that the PAGA gives the state a sufficient role in the litigation. PAGA requires workers to notify the state’s Labor and Workforce Development Agency before and immediately after litigation begins, when there is a settlement or judgment in their case and prohibits workers to bring suits identical to the actions brought by the state, wrote Judge Maurice Sanchez.

The case is California Business & Industrial Alliance v. Becerra, California Court of Appeals, Fourth Appellate District, No. G059561.

For CABIA: Richard Frey of Nixon Peabody; Brock Seraph by Epstein Becker & Green

For the State: Assistant Attorney General Thomas Patterson

(NOTE: This article has been updated to include a statement from the California Attorney General’s Office.)

Read more:

U.S. Supreme Court delivers heavy blow to California workers’ class action lawsuits

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Daniel Wiessner

Thomson Reuters

Dan Wiessner (@danwiessner) reports on labor and employment and immigration law, including litigation and policy development. He can be contacted at daniel.wiessner@thomsonreuters.com.

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