THE LARGER MEANING OF PAGA REFORM By Dave Puglia, President and CEO
“On my desk in the Oval Office, I have a little sign that says: There is no limit to what a man can do or where he can go if he doesn’t mind who gets the credit.” - President Ronald Reagan Even though I hold Ronald Reagan in the greatest esteem, I am going to violate that admonition a little bit for what I think is a good purpose. Not so much to give credit, although it’s important to recognize a small band of warriors whose boldness yielded great results, but more critically to illuminate a strategic trail that has been cut through the nasty impenetrable thicket that is the California Legislature. This is an abbreviated review of the reforms to California’s notorious Private Attorneys General Act (PAGA). Enacted in 2004, PAGA was intended to be a more effective way to help employees resolve workplace disputes. Instead – predictably given the way the law was crafted – trial lawyers seized on this new weapon to shake down California businesses to the tune of $8 billion over the past decade. Agricultural employers were hit with at least 180 cases during this time span at an average of $875,000 per settlement. For every legislative session in Sacramento since about 2010, business groups made the case to legislators that PAGA was being abused by trial lawyers, undercutting the
intent of the Legislature to ensure that the law primarily benefit truly harmed employees. And every session, one or two very modest little bills to reform PAGA around the edges were introduced and promptly shot down in committee hearings. It became sort of a “Groundhog Day” thing in the Capitol. Meanwhile, with every passing year, the number of abusive PAGA claims increased as more trial lawyers moved in. Settlement amounts soared as trial lawyers realized that the web of trip wires that is the California Labor Code makes it nearly impossible for an employer to take these kinds of cases to trial. Frustration in the business community boiled over as it seemed nothing could motivate the majority in the Legislature to restrain PAGA abuses. And yet, today, we celebrate the enactment of legislation reforming PAGA in ways we only dreamed of before. What changed? How did two legislative bills that never would have passed a single committee hearing before this year advance in 2024 all the way to Gov. Gavin Newsom’s desk without a single vote in opposition? It all started with a bunch of determined new car dealers who refused to accept escalating shakedown lawsuits as “the price of doing business” in California. With the counsel of their leader, Brian Maas, President of the California New Car Dealers Association (CNCDA), the group began in 2018 (yes, six years ago!) on a
From left to right: Jot Condie, President and CEO of California Restaurant Association (CRA); Brian Maas, President of the California New Car Dealers Association; Dave Puglia, President and CEO of Western Growers; Jennifer Barrera, CalChamber President and CEO.
4 Western Grower & Shipper | www.wga.com September | October 2024
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