California Supreme Court rejects SCOTUS decision, keeps state labor law alive

[Auggie]

San Francisco Chronicle / July 17, 2023

Workers in California can use a unique state law to join together and seek penalties against their employer for violating labor laws, the state Supreme Court ruled unanimously Monday, rejecting a U.S. Supreme Court decision that would have effectively nullified the California law.

The Private Attorneys General Act of 2004, or PAGA, lets employees sue their employers, individually or collectively, in the name of the state for violating laws such as those regulating minimum wages, overtime, sick pay and meal and rest breaks. If the suits succeed, the employees collect 25% of the penalties provided by labor law, and the state collects 75%.

Last June, the nation’s high court ruled 8-1 that PAGA violates the rights of businesses whose contracts require workers to take disputes to individual arbitration rather than going to court, a common practice for large companies. Arbitrators’ decisions are virtually unappealable, and studies have found that they usually favor employers, their frequent customers.

But as Justice Goodwin Liu observed in Monday’s 7-0 ruling — quoting another U.S. Supreme Court decision — “the highest court of each State… remains the final arbiter of what is state law.” And under the California court’s interpretation of PAGA, Liu said, employees may have to arbitrate their own claims but can still join co-workers to sue their employer on behalf of the state.

https://www.sfchronicle.com/politics/article/california-paga-lawsuits-18204697.php

[bucolic_frolic]

1. "the highest court of each State... remains the final arbiter of what is state law."

I wonder if they really mean it. SCOTUS seems to meddle in everything 2A.

[grumpyduck]

2. In CA, an employer cannot require employees or prospective

employees to sign an arbitration agreement. We went thru that at my company last year.

Of course, there's nothing to prevent an employer to "consider other applicants" if a prospect refuses to sign the damn thing. They're a fucking legal scam.

[stopdiggin]

3. thanks. and thanks for a decent explanation.

I wonder whether the CA decision will withstand scrutiny. (and how soon that will come?)

https://www.callaborlaw.com/entry/discretion-the-better-part-of-valor-in-defending-against-paga-claims

Since the U.S. Supreme Court’s decision in Viking River Cruises v. Moriana, employers have been implementing and enforcing arbitration agreements requiring employees to arbitrate their individual Private Attorneys’ General Act (“PAGA”) claims. But what happens to the representative PAGA claim once the employee’s individual PAGA claim has been severed and sent to arbitration?

The U.S. Supreme Court held in Viking River that under federal Article III standing law, the representative PAGA claim had to be dismissed from court. But, Justice Sonia Sotomayor’s concurring opinion in that case left the last word on standing to California courts and the California legislature.

California courts have issued mixed and conflicting rulings regarding what to do with the representative PAGA claim once the employee’s individual claims are compelled to arbitration. Some courts have dismissed the representative claims following the decision in Viking River. Others have stayed the representative claim while the arbitration of individual claims proceeds.

[Auggie]

4. There's more ... like a 2024 ballot initiative sponsored by business groups

From the link:

The ruling does not eliminate the last threat to PAGA, however. Business groups, which have argued that the law harms the economy and serves mainly to enrich lawyers, have qualified an initiative for the November 2024 ballot that would repeal the 2004 law and instead allow individual employees to sue their employers for labor law violations and collect 100% of the penalties, but no attorneys’ fees.

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Remove lawyers and remove incentive to win cases.