hunting grounds. According to LWDA data covering the Agriculture, Forestry, Fishing and Hunting Industry Sector, analyzed by former California Department of Industrial Relations Director, Christine Baker and former Cal/OSHA Chief, Len Welsh (Baker & Welsh), out of 58 recent settlements, the average settlement amount was more than $775,000. The largest settlement ($6 million) was paid by a major farm labor contractor. Eleven other ag businesses paid $1 million dollars or more. Some employers are sued more than once. Many more agricultural businesses are currently defending PAGA claims that have not yet settled, and countless others are waiting to be sued for the first time. Since 2004, the number of PAGA lawsuits that have been filed against the state’s employers has exploded. The state now receives about 5,000 PAGA notices annually according to the Legislative Analyst’s Office—a staggering 1,440 percent increase over the first year PAGA was in effect. According to a study authored by Baker & Welsh for the CABIA Foundation, on average employers pay $1.1 million per PAGA case, compared to $790,000 for cases decided by the LWDA. But it’s the plaintiffs’ attorneys who are the real winners—yielding settlements and fee awards of more than $372,000 per case on average. Aggrieved employees don’t fare nearly as well—recouping an average $1,300 per PAGA case. That’s approximately 4.5 times less than they make in a LWDA-decided case, where attorneys’ fees are not awarded. When
Consequently, California employers will have to continue fighting shakedown PAGA lawsuits unless and until the law is changed by the California voters. Fortunately, relief may come if the general business and ag communities get serious about fighting it. In October 2021, a coalition including the California Chamber of Commerce, California New Car Dealers Association and Western Growers filed a proposed initiative measure entitled The Fair Pay and Employer Accountability Act of 2022. If approved by California voters, the proposed initiative would repeal PAGA by taking away the ability to pursue civil penalties via a representative action and replace it with a new streamlined administrative system. Moreover, the measure would create a consultation unit requiring the Labor Commissioner to provide pre-enforcement advice, allowing employers to cure alleged violations without penalties. The program would be funded by LWDA funds from PAGA settlements and existing funding though the workers’ compensation system. To qualify for the ballot, the initiative petition must receive more than 600,000 signatures from registered voters. Substantial financial support from industry will be required to qualify the initiative petition for the ballot and to run an effective campaign required to win on election day. But it will be a small price to pay to eliminate the worst features of PAGA.
California receives 5,000 PAGA notices annually—a 1,440% increase since 2004. Plaintiffs’ attorneys earn an average of $372,000 per PAGA case; employees recoup an average of $1,300. And businesses win because they can resolve disputes faster and don’t have to shell out for attorneys’ fees. PAGA relief in sight? Businesses defending PAGA actions have bemoaned the fundamental unfairness of the statue and the case law interpreting it for years. While some cases are decided by the LWDA, successful employees get paid more money, faster. courts have been sympathetic to the pleas of employer-defendants, they say that any issues with PAGA must be addressed by the legislature, not the courts. And while countless bills have been introduced to reform PAGA in the California Legislature, these bills are routinely blocked by labor and the plaintiffs’ bar.
JANUARY | FEBRUARY 2022
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Western Grower & Shipper | www.wga.com
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