California used to attract Americans from across the country seeking new opportunities and a better life. Now, it seems that the state is doing the opposite, with families and business owners fleeing the state’s taxes, rising crime rates, and poor business climate. What’s worse, the leaders of our state are either ignorant of how terrible their governance has impacted California residents or simply unwilling to change course. If something isn’t done, residents will continue voting with their feet and fleeing to better-run states.
For the sake of all Californians, its time to reverse course.
One of the most significant yet widely unknown factors putting our state in a disadvantage is the overzealous enforcement of California’s Private Attorney General Act, or PAGA for short. Passed in 2004, PAGA gave private attorneys across the state free reign to sue businesses for violating even the most minor infractions of the California Labor Code. Many Californian expats who operated small businesses in our state before seeking greener pastures will know about this egregious law.
What’s the harm of it? A whole lot, since the law makes it extremely easy and simple for lawyers to exploit undeserving businesses for personal enrichment. PAGA’s intention was to strengthen labor code adherence by giving attorneys outside the Attorney General’s office the ability to enforce it. In the end, the law’s supposed purpose of making justice more accessible to people upended the scale. Simply put, PAGA is a blunt weapon wielded by predatory trial attorneys seeking out financial gain, creating blatantly unjust results for plaintiffs and defendants alike. It doesn’t matter how small an infraction may be. Trial lawyers sniffing out a personal payload will fleece as much as they can out of innocuous business owners due to the powers they now possess.
As an attorney who has represented small businesses in the Central Valley for over 20 years, I have seen firsthand the unjust havoc that PAGA has wrought on community-owned enterprises. The structural incentives of the law create a system that rewards greed over what is right, and when the dust settles, the only winners are the trial lawyers that stoke the flames of frivolous lawsuits for themselves. If you own or operate a small business in California, even an innocent timestamp irregularity that can be fixed outside the courtroom can become a nightmare that closes your doors forever. How is that in any way fair?
A major flaw of the law is that in the vast majority of cases that are settled, plaintiffs’ attorneys fees are awarded based on the total settlement, then what remains is split 75/25 between the state and the workers. As a result, attorneys get rich while workers get trivial amounts of money. Businesses are financially crushed to enrich attorneys.
With PAGA on the books for nearly two decades, we have an extensive track record proving that its time for the law to sunset, or in the very least significantly rolled back. PAGA is a jobs-killing, economy wrecking monster, and trial lawyers are too often more than willing to drain businesses dry without ever considering the negative ramifications. Sacramento needs to address PAGA with a sense of urgency, because soon, the only people moving to California will be other ruthless trial attorneys seeking to take a stab at the PAGA pot of gold.