By Sarah Kroll-Rosenbaum, Akerman LLP, and Harrison Thorne, Akerman LLP
Businesses operating in California over the past two decades have likely heard of, if not encountered, the Private Attorneys General Act, or PAGA.
For even the most sophisticated employers, being sued in a representative PAGA action feels a lot like being sued in an employee class action. But it’s not. Enacted in 2004, PAGA authorizes any “aggrieved employee” to stand in the shoes of the state of California to initiate an action for civil penalties against his or her employer “on behalf of himself or herself and other current or former employees.”
Moreover, a series of rulings over the past several years highlighting the unique aspects of PAGA lawsuits has led to a torrent of PAGA claims. In 2009, the California Supreme Court held in Arias v. Super. Ct. that PAGA plaintiffs do not need to satisfy state class action requirements. Then in 2014, the California Supreme Court held in Iskanian v. CLS Transp. Los Angeles, LLC that employees could not waive their right in an arbitration agreement to bring a PAGA claim. At the same time, class actions have become less attractive to the plaintiffs’ bar, as the U.S. Supreme Court has generally permitted class action waivers in arbitration agreements. As a result, PAGA litigation has exploded in California.
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