different strategy: to qualify a ballot initiative to repeal and replace PAGA. The risks of going forward were high. Obtaining sufficient valid signatures from voters to qualify a ballot measure is a multimillion-dollar endeavor, not to mention the far greater financial cost required to win the subsequent campaign. (Think about the ubiquitous TV ads and mail pieces flooding your home during election season.) Maas knew that only the threat of a ballot initiative to repeal PAGA would motivate the Legislature to take PAGA reform seriously. Setting out on this journey – and by design committing his members to dig deeper into their wallets than ever before – was anything but simple. A relatively new law, however, meant that qualifying a ballot measure would not inevitably force Maas’s group to mount a fully funded campaign to pass it. From the inception of the ballot initiative in 1911, once proponents of a ballot initiative submit signatures, the process advances no matter what: Either there are sufficient valid voter signatures, in which case the measure is placed on the ballot, or there aren’t, in which case it dies. But in 2014, the Legislature passed a new law allowing an initiative’s proponent to withdraw a qualified ballot measure even after voter signatures have been submitted, as long as at least 131 days remain before the election. This reform was intended to give interest groups that turn to the initiative process and the Legislature a chance to compromise before requiring voters to decide the matter. The law has been used 11 times to produce compromise legislation that satisfied initiative backers to withdraw their qualified ballot measures. That’s ultimately how we won the major PAGA reforms of 2024. And the “we” part of this is really important. As Maas moved forward, he found three key business association partners to join forces with the car dealers: Western Growers, the California Chamber of Commerce and the California Restaurant Association. Together, these four organizations, through their members and their own association resources, cobbled together the $9.5 million needed to qualify the PAGA repeal-and-replace initiative.
From there, it was game on as interests on the left – notably labor unions – sought a workable compromise that would avoid a costly fall ballot measure fight. With additional partners coming on board for a possible legislative compromise, the business coalition went back to their wells, raising more than $3 million for a public affairs program to make PAGA reform a high priority for the Legislature. With June 27, 2024 – the deadline to withdraw our qualified PAGA initiative from the November ballot rapidly approaching – negotiations between our coalition and labor groups quickly heated up in the early part of the month. After a final weekend of high stakes negotiations, an agreement was announced on June 18 by Gov. Newsom and legislative leaders. Later that week, legislation was introduced, and on July 1, the Governor signed PAGA reform into law. Credit where credit is due: This would not have happened without Gov. Newsom and his staff. After negotiating a deal between labor unions and elements of the restaurant industry that motivated the latter to withdraw their minimum wage referendum from the November 2024 ballot, Gov. Newsom moved PAGA reform to the top of his list. He and his staff operated in good faith. They organized the legislative partners and brought business and labor unions to the table, ultimately driving a workable solution over the goal line. While we did not get everything we asked for – no side ever does in a compromise – the reform package addresses the major problems with PAGA and will reduce the number and severity of lawsuits against our member companies and businesses across the state. More importantly, this unified, sustained and well-funded campaign demonstrates what is still possible in California. Thanks to the direct democracy reforms of 1911, and the 2014 reforms to them, we are not necessarily consigned on all things to the dictates of the Legislature’s supermajority. Be assured that the merry band behind the risky and expensive strategy that resulted in PAGA reform will not disband. Indeed, we are actively looking for our next adventure.
6 Western Grower & Shipper | www.wga.com September | October 2024
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