California Supreme Court rejects SCOTUS decision, keeps state labor law alive

[Auggie]

San Francisco Chronicle / July 17, 2023

Workers in California can use a unique state law to join together and seek penalties against their employer for violating labor laws, the state Supreme Court ruled unanimously Monday, rejecting a U.S. Supreme Court decision that would have effectively nullified the California law.

The Private Attorneys General Act of 2004, or PAGA, lets employees sue their employers, individually or collectively, in the name of the state for violating laws such as those regulating minimum wages, overtime, sick pay and meal and rest breaks. If the suits succeed, the employees collect 25% of the penalties provided by labor law, and the state collects 75%.

Last June, the nation’s high court ruled 8-1 that PAGA violates the rights of businesses whose contracts require workers to take disputes to individual arbitration rather than going to court, a common practice for large companies. Arbitrators’ decisions are virtually unappealable, and studies have found that they usually favor employers, their frequent customers.

But as Justice Goodwin Liu observed in Monday’s 7-0 ruling — quoting another U.S. Supreme Court decision — “the highest court of each State… remains the final arbiter of what is state law.” And under the California court’s interpretation of PAGA, Liu said, employees may have to arbitrate their own claims but can still join co-workers to sue their employer on behalf of the state.

https://www.sfchronicle.com/politics/article/california-paga-lawsuits-18204697.php