(CN) – When California was in the throes of a budget crisis 15 years ago, state legislators created the Private Attorneys General Act, or PAGA, to let employees wronged by their employers to sue on the state’s behalf while represented by private attorneys. The law has allowed more employment complaints to be brought to justice, but employers say attorneys looking to make a quick buck are cashing in on the state’s lack of oversight.
Last month, the California Business & Industrial Alliance sued the state alleging PAGA is unconstitutional as it’s written and used by attorneys “for their own benefit.”
More than 35,000 PAGA notices have been filed by trial attorneys since the law went into effect, and over 100 law firms have sent 50 or more PAGA notices, according to the Nov. 28 lawsuit in Orange County Superior Court.
But Eric Kingsley of Kingsley & Kingsley in Los Angeles said even though his firm is listed as filing the second highest number of PAGA notices – 599 – that number over the 14 years PAGA has been in effect “is not that many.”
In an interview, Kingsley disputed an argument the California Business & Industrial Alliance made in its complaint that employees are not fairly compensated, including in many high-profile PAGA cases where employees received around $100 while attorneys received upwards of millions of dollars in attorney’s fees.
“The statute was never intended to compensate employees … that’s not what PAGA is for,” Kingsley said in noting the state collects 75 percent of settlements while employees get 25 percent.
He called the state’s task to enforce its labor laws “daunting” and noted labor officials tend to focus on impacted industries like the garment industry and agriculture because there aren’t enough resources to fully fund labor enforcement.
“I wouldn’t imagine a chamber-backed organization would want to increase [regulation] to add hundreds of employees to the state payroll,” Kingsley said in response to California Business & Industrial Alliance’s suggestion the state can better ramp up its labor enforcement arm with its current budget surplus.
Mariko Yoshihara, legislative counsel and policy director for the California Employment Lawyers Association, said the increase in PAGA lawsuits over the past several years is a “direct result of an exponential rise in forced arbitration agreements that workers are routinely required to sign as a condition of employment.”
Because the California Supreme Court found PAGA claims cannot be forced into individual arbitration, Yoshihara noted, more cases are being filed.
“PAGA now stands as a critical and one of the last remaining tools for workers in California to take collective action to remedy violations of their rights under the Labor Code,” Yoshihara said in noting the statute has a built-in mechanism to prevent “extortive, abusive or unconstitutional enforcement” by allowing courts to reduce penalties against employers as they see fit.
PAGA, the only recourse for break and overtime violations
Piper Barnard, a nurse who worked at Twin Cities Community Hospital in Templeton, California, from 2009 to 2017, didn’t know she had signed an arbitration agreement until her attorney Lauren Teukolsky requested her personnel file from the hospital.
She and over 50 other nurses who didn’t receive rest breaks during 12-hour shifts couldn’t file a class action due to the waivers and went to arbitration with the hospital, with a handful of the nurses also suing under PAGA.
Barnard said she had to step off the hospital floor in order to use the restroom, which often meant violating California’s nurse-to-patient ratio in the hospital’s ICU unit and putting patients at risk.
“Our patients could code at any moment; five minutes to a coding patient is an eternity, it’s enough time to lose brain function,” Barnard said in an interview.