Let’s Make a Deal: PAGA

By: Jeremy B. White

THE PROPOSAL: A business-backed ballot initiative would dismantle the Private Attorneys General Act by removing its powerful private right of action, which allows workers to sue both for back wages and civil penalties on behalf of themselves, other employees and the state of California — with their lawyers typically getting a healthy chunk. It would instead require the Legislature to prop up the chronically underfunded and backlogged Labor Commissioner’s office with “all necessary funding,” while also giving the agency more responsibilities.

WHY THERE COULD BE A DEAL: The anti-PAGA initiative qualified for the ballot two years ago, but its business sponsors have recently shifted their public messaging away from voters and toward lawmakers — a signal to the Legislature that there’s space for negotiation ahead of a June deadline to withdraw the measure.

THE ROOM WHERE IT WOULD HAPPEN: A deal to rewrite PAGA would put aside the ballot fight for a path through the Legislature, but the powerful interests that have been wrangling over the law since its 2004 enactment will have to first agree to the contours of a deal. Without the blessing of organized labor, which has championed PAGA as a vital tool for workers, many Democratic lawmakers are likely to conclude it’s wiser to punt to voters than to antagonize powerful allies.

AT THE TABLE: Ending PAGA is a major priority for the business community writ large, which faces a recurring threat of lawsuits that California Chamber of Commerce President Jennifer Barrera calls “something every business and industry we talk with raises as a problem.” Auto dealerships have emerged as the biggest stakeholders, kicking in more than $6 million to the repeal campaign because trial lawyers “targeted our industry early,” said California New Car Dealers Association President Brian Maas. On the other side are lawyers’ groups like the Consumer Attorneys of California and labor unions, who are well-positioned to defend their priorities at the ballot box this fall after a deal last year averted a costly showdown over fast food labor.

ROOM FOR COMPROMISE: Union officials concede the current system doesn’t always yield the best settlements for workers, but they would have to be convinced a deal to alter PAGA would lead to better outcomes for employees. “Some attorneys are getting wealthy and some workers are getting very little,” said California Labor Federation head Lorena Gonzalez. “But the threat of a lawsuit at least makes some employers do better.” A deal could involve splitting the pro-PAGA coalition of labor and attorneys’ groups, who prioritize the right of action. “That’s the point of the Privacy Attorney General Act,” said CAOC political director Lea-Ann Tratten. She said the law’s supporters were urging the Legislature to “continue to protect this really important law.”

TRACKING MOVEMENT: The measure’s sponsors recently shifted their public messaging into a Legislature-focused campaign that talks of a “fix” to PAGA rather than its repeal. Meanwhile, the lawyer-labor coalition recently launched a website focused on wage theft in an effort to underscore what they see as PAGA’s benefits — or, put another way, to outline what they’re not willing to forfeit.

FORECAST: The sides appear ready to pursue a deal, but there’s a narrow path to a change that’s big enough for business but not too sweeping for PAGA’s defenders.

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