The Private Attorneys General Act (PAGA) allows plaintiffs to sue for violations of California Labor Code provisions that don’t provide a private right of action. Why? According to the Act’s legislative history, as the state supreme court noted in Iskanian v. CLS Transportation, “there was a shortage of government resources to pursue enforcement.” Thus, the state needs private litigants to bring these claims.
Employees who sue on PAGA claims can’t be required to arbitrate, even if they agreed to arbitrate all employment-related claims. And even if they agreed to waive class or collective actions, they still get to bring a collective action under PAGA. Why? Because the state didn’t agree to arbitrate or waive class actions and it depends on these “Private Attorneys General” to bring these claims on its behalf.
What’s wrong with that? First, according to some reports, 2.4 million government employees work in California. Second, as we reported before, the state has plans to add additional employees just to focus on PAGA claims. So the idea that PAGA claims require special treatment because the state needs private litigants to bring them on its behalf is just wrong.
I will, however, admit that the state benefits from PAGA claims in the sense that the employees get to keep only 25% of the penalties they recover. The other 75% goes to the state. Their lawyers get to keep 100% of their fees. But what’s wrong with that? After all, they’re the ones who came up with this scam.