SANTA ANA – Orange County Superior Court Judge Peter Wilson ruled Sept. 11 that the California Business and Industrial Alliance (CABIA) failed to demonstrate in its suit how the controversial Private Attorneys General Act (PAGA) allegedly violated the separation of powers and due process, however, the organization's president is optimistic going forward.
CABIA believes that PAGA has prevented employers from defending themselves against lawsuits brought forward by workers as the act allows employees to file labor code violation complaints in court against employers on the state’s behalf while represented by private attorneys, which CABIA believes interferes with employers' due process.
“Separation of powers is still really important and key to all of this because we're pretty much saying that 'you can't deputize citizens to enforce this kind of thing,' and I don't know why that is such a difficult hurdle to overcome, but we still have equal protection claims and that's going to carry the lawsuit far,” Tom Manzo, founder and president of CABIA, said.
In an unrelated case, the California Supreme Court held on Sept. 12 in a separate case that workers cannot try to recover wages that they say were unpaid in civil lawsuits brought under PAGA, a ruling hailed by opponents of PAGA.
“... Attorneys can no longer use PAGA as a means to circumvent arbitration agreements to create 'class actions' for the recovery of unpaid wages,” Manzo said in an emailed statement. “This may reduce the number of PAGA complaints filed in the future.”
Manzo, while disappointed that its separation of powers claim did not hold up, sees a path forward for the suit.
“... We still have a live claim," he said in the statement. "Our equal protection claim survived the state's demurrer, and the judge ruled that CABIA has standing to bring this claim. This claim targets the PAGA carve-out negotiated by unionized construction industry companies.
"At minimum, a favorable ruling on this claim would overturn the PAGA carve-out. In a best case scenario, we'll be able to make the case that the same logic justifying this carve-out for construction also justifies it for every other industry.”