Private Attorney General Act

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Last year, we reported on the reforms to the Private Attorney General Act (PAGA) that Governor Gavin Newsom signed into law on July 1, 2024.  The reform legislation was pushed through to avoid a ballot vote on a measure seeking to repeal PAGA entirely in the 2024 election.  The legislation was aimed at providing some relief to employers from the flood of meritless PAGA claims and provide mechanisms for early resolution.  The legislation also gave the Department of Industrial Relations (DIR) the resources and ability to expedite hiring and to fill vacancies in the CA Labor and Workforce Development Agency (LWDA) which is the division responsible for PAGA administration and oversight. While the reforms did not appear deter the “serial filer” firms from filing a record number of cases (9,463 PAGA notices were filed in calendar year 2024 – a jump from 8,100 the prior year), we are extremely pleased to report that the LWDA and its new hires, have begun taking a much more active role in these cases at an early stage and cracking down on the worst abusers of the PAGA statutes.Continue Reading An Update on PAGA Reform from the Trenches – Finally, Some Relief for Employers from Meritless Claims

The California Department of Industrial Relations (DIR) updated all but Wage Order 14 and 17 recently.  The DIR regulates wages and hours for employees.  The Division of Labor Standards Enforcement (DLSE) enforces the provisions of the wage orders, including the posting requirements.  The Wage Orders are numbered 1 through 17.

The most recent updates were…

Brenden Begley_retouchMany employers have arbitration agreements wherein employees agree to waive the right to file a lawsuit against the employer under various laws, including the California’s Private Attorney General Act (“PAGA”).  Employers were disappointed when the California Supreme Court ruled last June that such waivers of PAGA lawsuits are invalid, at least in state court.  See Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal.4th 348 (2014).

However, a number of federal trial judges in the Golden State subsequently disagreed and ruled that PAGA waivers are enforceable in their courts.  See, e.g., Ortiz v. Hobby Lobby Stores, Inc., E.D. Cal. Case No. 2:13-cv-01619 (Sept. 30, 2014).  Because a PAGA waiver still may be enforceable against an employee in federal court, many employers have either kept or inserted such waivers in their arbitration agreements.

This week it became apparent that including a PAGA waiver may destroy an employer’s ability to require arbitration in any type of lawsuit, be it under PAGA or some other theory (e.g., alleged discrimination, harassment, retaliation, or wage-and-hour or meal-and-rest-period violations).  Specifically, the California Court of Appeal ruled that a PAGA waiver will invalidate an entire arbitration agreement in state court if that agreement also includes a non-severability clause.  See Montano v. The Wet Seal Retail, Inc., Cal. Ct. App. Case No. B244107 (Jan. 7, 2015).
Continue Reading The New PAGA-Waiver Trap Door