The U.S. Supreme Court on June 15 ruled that employees who sign arbitration agreements can’t bring certain claims under the Private Attorneys General Act, or PAGA, to court.
However, this decision will not alter the efforts of Western Growers and other industry groups to pass a PAGA fix on the 2024 ballot, as only a voter-enacted law can prevent the California Legislature from pursuing an end-run around this Supreme Court ruling, according to a news release
Thanks in part to the $2.7 million raised by Western Growers, including contributions from nearly 140 member companies, the campaign has submitted close to 1 million signatures and is in the final stages of qualifying for the 2024 ballot, according to the release.
Enacted in 2004, PAGA allows workers to sue their employers over violations of the labor code, such as minimum wage and overtime pay, the release said. California is the only state that authorizes such private lawsuits as a means of enforcing its labor laws.
The consequences of this law have been costly to California employers without improving outcomes for workers, according to the release.
In the last five years, trial lawyers have used PAGA to extract $5 billion from California businesses to settle “trip-wire” employment law, claims the release. Before the June 15 Viking River Cruises decision, that number was expected to grow to $10 billion during the next five-year period.
Despite this favorable decision, the California Legislature is expected to pursue legislation to circumvent the Supreme Court, the release said.
The following statement was issued by the PAGA campaign executive committee following the Viking River Cruises decision:
“Even with the [Supreme Court] ruling on Viking River Cruises, PAGA will still be an avenue for shakedown claims against businesses where trial attorneys take a huge portion of the recovery, leaving employees with a reduced amount. This is especially the case with anticipated efforts by various legislators to undermine the [Supreme Court] decision before this session is over. Our executive committee remains committed to seeing this initiative passed.”
