Calif. Business Group, Citing COVID-19, Asks for 90-Day Halt to PAGA Suits
Plaintiffs attorney Shannon Liss-Riordan, who brings employment lawsuits under California's Private Attorneys General Act, called the proposed move "outrageous." "This isn't the time for employers to say, 'yeah, we're off the hook, let's suspend the rule of law,'" she said.
March 26, 2020 at 05:15 PM
3 minute read
A California business group has sent a letter to Gov. Gavin Newsom to impose a 90-day moratorium on lawsuits brought under the state's Private Attorneys General Act in light of the COVID-19 outbreak.
The letter, sent on Wednesday by the California Business and Industrial Alliance, says so-called PAGA notices continue unabated despite the unprecedented impact the coronavirus has had on employers, particularly those in the health care field. Last week alone, lawyers filed 167 claims under PAGA, which, "while lucrative for trial lawyers, often cost businesses thousands if not millions of dollars in settlement and legal fees," the letter says.
"These attorneys aren't even slowing down," said the group's founder, Tom Manzo, who filed the letter. "They're not even taking a pause and what's even more repulsive is they're attacking businesses that we're all going to need as a society right now."
"Imagine this hospice care center dealing with who knows what is mentally on their mind and now all of a sudden the owner says you got this PAGA notice and your attorney says this could cost you millions," Manzo said. "This is horrible timing for all of this."
The letter asks Newsom to issue an executive order.
Plaintiffs lawyer Shannon Liss-Riordan, of Lichten & Liss-Riordan, who often brings PAGA lawsuits, called the move "outrageous."
"This is pretty outrageous for employers to call for a moratorium on claims right now when we need our legal system now more than ever," she said. "We know things will be slowed down a bit because courts are struggling and closing and open only for emergencies, but to say workers can't even file a PAGA claim at this time is a bridge too far."
COVID-19 could raise employment issues such as whether layoffs were required, how to keep track of time working from home and paying for unused equipment, she said. She noted that the courts could decide penalties later, even reducing that amount, given that employers are facing an unprecedented crisis.
"There are so many employment issues implicated by this unprecedented crisis," she said. "This isn't the time for employers to say, 'yeah, we're off the hook, let's suspend the rule of law.' "
PAGA, which is part of California's Labor Code, allows employees to bring lawsuits seeking civil penalties on behalf of themselves or other employees alleging a wide range of alleged violations, such as missed lunch breaks or unpaid overtime, against employers.
Manzo said he formed CBIA nearly three years ago to reform PAGA through legislation. The group represents about 150 small and midsize businesses and has a pending lawsuit against California seeking to reform PAGA.
Its letter to the governor noted that PAGA claims filed in the past week included those against hospitals, such as Cedars-Sinai, and other such health care entities as senior care homes.
"It's shameful that trial attorneys are targeting our state's hospitals and health care services," the letter says. "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."
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