Legislation opposed by the California Chamber of Commerce and a large coalition as a Cost Driver that undermines a painstaking negotiation by business and labor to reach a historic agreement to reform the Private Attorneys General Act (PAGA) passed the Senate Judiciary Committee this week.
SB 310 (Wiener; D-San Francisco) creates a new private right of action for wage and hour penalties that will be manipulated by trial attorneys, undermining the 2024 PAGA reform, which sought to reduce avenues for litigation abuse and overall costs on employers.
The bill gifts trial attorneys a new means of leveraging wage and hour cases against employers of every size for high settlements, the CalChamber-led coalition pointed out in a letter to committee members.
Coalition Opposition
The coalition opposing SB 310 includes the California New Car Dealers Association, California Restaurant Association, California Retailers Association, Western Growers Association, plus numerous other employer groups and local chambers of commerce.
Under current law, Labor Code section 210 penalties for violations of multiple Labor Code provisions may be collected through PAGA or if the employee files a wage claim with the Labor Commissioner.
When drafting the PAGA reform and the provisions imposing penalty caps when an employer “takes all reasonable steps” to comply with the law and to fix policies and practices, reform advocates made sure the caps applied where a lawsuit seeks Labor Code section 210 penalties through PAGA.
New Reason to Sue
SB 310, however, removes those guardrails from Labor Code section 210, giving it a new, separate private right of action that trial lawyers will attach to every boilerplate claim they file to inflate settlement costs.
As an example of how law firms abuse litigation, in February, the Labor and Workforce Development Agency required one law firm to refile more than 130 PAGA cases. If passed, SB 310 hands such firms a new procedural tool for extracting higher penalties from employers.
Key Vote
SB 310 passed Senate Judiciary on April 22, 10-2.
Ayes: Allen (D-Santa Monica), Arreguín (D-Berkeley), Ashby (D-Sacramento), Durazo (D-Los Angeles), Laird (D-Santa Cruz), Stern (D-Los Angeles), Umberg (D-Santa Ana), Wahab (D-Hayward), Weber Pierson (D-San Diego), Wiener (D-San Francisco).
Noes: Niello (R-Fair Oaks), Valladares (R-Santa Clarita).
Not voting: Caballero (D-Merced).
SB 310 will be considered next by the Senate Appropriations Committee.
