In recent years, the United States Supreme Court has done its level best to derail class actions. In decision after decision the Court has curtailed the ability of regular people to join together to challenge the actions of corporations and other entities. The more cynical among us might see this as a pattern whereby the Court is going out of its way to grant new rights to the powerful and wealthy interests in our society. (See, for example, the recent decision in McCutcheon v. FEC, in which the Court greatly expanded the ability of wealthy individuals to contribute to campaign funds-and thereby disproportionately influence elections.)
The Court’s attack on class actions has dramatically affected workers seeking to enforce their rights under federal and state labor laws. Many workers who have sought to represent groups of employees in court have been (1) prevented from representing other workers (by way of a class action waiver that they were forced to sign in order to get the job), and (2) forced into arbitration where they are denied the right to present their case to a jury of their peers.
Workers in California are fortunate in that they have another resource to rely upon in the event that they are unable to bring a class action. California’s Private Attorneys General Act (also known as “PAGA”) was enacted in 2004 because the California Labor & Workplace Development Agency (LWDA) did not have enough attorneys or staff to enforce the California Labor Code. The goal at that time was to allow workers-particularly low wage agricultural workers-to file representative actions on behalf of themselves and their co-workers. (California Rural Legal Assistance, an incredible organization that represents farm workers, led the fight enact PAGA.)
In a PAGA representative action, the worker who brings the case stands in the shoes of the California Attorney General and sues on behalf of the State of California. As a result, that worker can seek to recover the penalties that employers would normally have to pay to the State of California. 75 percent of any penalties collected are paid directly to the LWDA, and 25 percent are paid to the workers. (This is a positive result for the workers, who otherwise would not be able to collect any of those penalties.)
PAGA appears to be working. According to the Daily Journal (citing data from the LWDA), in 2005, 759 lawsuits were filed under PAGA. In 2013, that number had risen to 3,137. The total amount paid to the LWDA for PAGA claims is $31.6 million. That figure represents penalties that otherwise would likely not have been paid.
PAGA may be the only avenue left for workers who have signed a class action waiver to join together in a collective action. This is why the upcoming California Supreme Court decision in Iskanian is so critical. That decision will address the issue of whether workers who have signed arbitration agreements with class action waivers can pursue their PAGA claims as representative actions in court.
Colleagues who attended the oral argument in Iskanian uniformly reported that the California Supreme Court seemed likely to find a way to find in the workers’ favor. Let us hope that that is the case.
If you have any questions about your rights in the workplace, or feel that your rights have been violated, please contact the attorneys at Hunter Pyle Law for a free consultation. We can be reached at 510.444.4400, or at inquire@hunterpylelaw.com.