Michael S. Kun, Member of the Firm in the Employment, Labor & Workforce Management practice, in the firm’s Los Angeles office, was quoted in Law360 Employment Authority, in “Calif. High Court Sparks 'Last Great PAGA Fight,'” by Max Kutner. (Read the full version – subscription required.)
Following is an excerpt:
The California Supreme Court's recent Adolph v. Uber Technologies ruling has breathed new life into a ballot measure eligible to voters in 2024 and that some attorneys see as the last best chance to kill the state's representative action law, the Private Attorneys General Act.
In Adolph, the state justices held on July 17 that non-individual claims under PAGA, which enables workers to sue on behalf of themselves, the state and others for labor law violations, can remain in court even if individual claims are sent to arbitration.
The ruling departed from the U.S. Supreme Court's Viking River Cruises Inc. v. Moriana decision a year earlier, in which the federal justices said a worker's non-individual claims could be dismissed for lack of standing when individual claims go to arbitration.
Prior to the Adolph and Viking decisions, a business group coalition had proposed a ballot measure in California, the Labor Code Fair Pay and Employer Accountability Act of 2022, that sought to amend the state's Labor Code to eliminate PAGA. Due to signature deadlines, the proposal is now eligible for ballots in 2024. …
Under PAGA, by contrast, workers receive 25% of penalties and the California Labor and Workforce Development Agency gets the remaining 75%.
In a fiscal impact report, the Legislative Analyst's Office of the California Legislature said the measure would likely increase annual enforcement costs by $100 million or more and reduce penalty revenue by tens of millions of dollars each year.
But the measure, if passed, could get more money to workers than the current system does, said Michael Kun of management-side firm Epstein Becker Green.
"I don't think even employees understand until they get those checks that they're only going to receive a miniscule amount of this apparently large settlement, just because of the way the Private Attorneys General Act works," Kun said. "As I understand the Fair Pay and Employer Accountability Act, it's at least designed to try to correct that imbalance."
Kun anticipates an expensive fight over the measure as the 2024 election approaches.
"Employers and groups like the chambers of commerce who were very optimistic about what was going to happen in the U.S. Supreme Court's review of Viking River Cruises now have to realize post-Adolph that these [Private Attorneys General Act] representative claims are not going away," Kun said.
"The plaintiff's bar post-Adolph has more reason than ever before to want to beat down this initiative, and the employers groups have more reason than ever before to want to try to push this through," he said.
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