Plaintiffs’ attorneys, business lawyers battle over PAGA moratorium request

A collective of pro-worker and plaintiff groups, including the Consumer Attorneys of California, asked Gov. Gavin Newsom to retain the Private Attorney General Act statute after calls for a moratorium during the pandemic.

The earlier request to pause the law came from the California Business and Industrial Alliance, whose members said they feared an onslaught of Labor Code violation claims they long believed to be tedious will cripple businesses already struggling during the economic downturn.

Tom Manzo, the business alliance's president, said there have been 786 PAGA claims filed against businesses since March 25, averaging 18 claims filed a day. "It seems these cases are now accelerating during these difficult times," Manzo said.

The coronavirus pandemic has highlighted stark differences in the plaintiff and defense bar, the latest being over calls for a moratorium on claims under PAGA, which allows individuals to act on behalf of the state's top prosecutor in suing employers over violations ranging from incorrectly printed paychecks, inadequate breaks, too few days off and unpaid overtime to unsafe working conditions.

Opponents of the moratorium idea said PAGA is needed now more than ever as many workers have been on the front lines without being afforded the proper safeguards and benefits.

"This blatant attempt to exploit the current public health crisis facing California is an affront to the very front-line workers keeping this economy going," according to the letter, signed by the California Employment Lawyers Association, California Labor Federation and Bet Tzedek, among others.

Hospitals including Cedars-Sinai Medical Center, Hollywood Health System Inc. and Alliance Healthcare Services Inc. have been hit with PAGA suits.

The group added such businesses are subject to "minor infractions" of the Labor Code, a claim disputed by pro-employee groups. "CBIA offers no facts, nor could it. In fact, numerous press reports have highlighted the many workers who are being ordered to work without adequate personal protective equipment, in violation of workplace safety requirements," said the consumer attorneys' letter.

"These businesses and their employees are working hard to keep us all healthy and safe," said the business alliance in its letter to the governor's office. "They should not be rewarded with financially crippling PAGA suits. As the virus continues to wreak havoc on our economy, these lawsuits could spell even more ruin for much-needed Golden State medical services and businesses at large."

Goodwin Procter LLP partner Koray J. Bulut, who represents employers, said he was "skeptical anything will be done" by the governor.

"When you look under the hood and see who gets what in these claims, employees are getting very little," he said of the PAGA cases.

The workers' groups added PAGA is a necessary mechanism since more workers have been compelled to arbitration. They said workers who entered the country illegally and have been deemed essential cannot get federal unemployment benefits.

"PAGA offers a continued refuge for them, and other low-wage workers such as drivers, retail workers, and janitors who have sustained us during weeks of sheltering in place," according to the pro-employee letter.

The business alliance said PAGA claims have mostly benefited trial attorneys rather than workers.

In response, the attorneys' group said the state received $88 million in PAGA claims during 2019, according to a study by UCLA. It's not clear how much workers and law firms each received.

Calls for relief come as the medical industry, particularly nursing homes, are asking for executive immunity from liability suits. Nurses are on both sides of this issue. On one hand they want immunity from liability suits, but also PAGA protections. They too have signed the letter asking to keep PAGA intact.