Ballot Initiative Will Give Californians Option to Repeal and Replace PAGA

On Nov. 5, Californians will vote whether to preserve the Private Attorneys General Act (PAGA) in its present form or replace it with a proposed law, the California Fair Pay and Employer Accountability Act (FPEAA). We’ve gathered articles on the news from SHRM Online and other outlets.

What’s PAGA?

PAGA gives aggrieved employees a simplified and relatively inexpensive process for filing a representative lawsuit. PAGA has been criticized as enriching lawyers while subjecting many businesses to costly suits over technical violations. The ballot initiative is the result of nearly two years of employer efforts.

(LawyersandSettlements.com)

Arguments for Ballot Initiative

The initiative’s supporters argue that employees benefit more when actions are brought directly by the state—instead of by trial lawyers—and that PAGA has resulted in needlessly high litigation and settlement costs for employers for two decades.

(Proskauer)

Ballot Opponents’ Side

If voters repeal PAGA, it will set back the movement for worker justice and leave millions of workers without adequate tools to fight labor injustices in court, ballot opponents say. PAGA allows wronged workers to take their employer to court on behalf of the state of California for violations in their workplaces, effectively allowing them to act as private attorneys general.

(The Center for Popular Democracy)

FPEAA Might Replace Lawyer-Friendly PAGA

The FPEAA would provide a streamlined process to address employees’ claims—and larger potential recoveries for the employees themselves in the event they are treated unlawfully. Among other things, employees would receive 100 percent of any recovery under the proposed statute, rather than the 25 percent they receive under PAGA.

Some plaintiffs’ firms have filed hundreds of nearly identical PAGA lawsuits against employers across the state, accusing them in the same vague terms of not paying their California employees for all time worked, not providing compliant meal and rest periods, and not providing accurate wage statements. With the threat of potentially huge penalties driving large, early settlements from many employers, PAGA has proved to be a cash cow for the plaintiffs’ bar.

(National Law Review)

PAGA Filings Hit Recent Highs

New class-action and California Private Attorneys General Act (PAGA) filings have grown exponentially in recent years and reached record numbers in 2023. This trend is raising concerns for California employers, as state courts have expanded liability risks for more claims and further restricted the applicability of arbitration agreements to PAGA claims.

(SHRM Online)