Home » Santa Clarita News » Editorials » Reform PAGA To Protect Small Businesses — George Runner — July 20, 2021

Reform PAGA To Protect Small Businesses — George Runner — July 20, 2021

By George Runner

Members of California’s small business community are just now getting back on their feet following the devastation caused by the coronavirus pandemic.

To achieve a full economic recovery, lawmakers in Sacramento must come together to find ways to ease the regulatory burden that business owners are up against. A great place to start would be to reform the Private Attorneys General Act (PAGA) which has wreaked havoc on California small businesses and consequently, hurt consumers and employees.

The original intent of PAGA was to give aggrieved employees the ability to file claims against their employers for legitimate labor and wage violations and recover appropriate compensation. When it was first enacted in 2003, PAGA seemed like a commonsense way to address a real issue. Everyone can agree that workers who can prove they were harmed in the workplace should be entitled to compensation.

Unfortunately, the law was written so broadly that it has allowed our state’s court system to become overrun with phony claims from predatory trial lawyers who have made a cottage industry out of filing frivolous lawsuits.

These attorneys actively recruit clients to accuse their employers of wrongdoing by promising them a big payday if the court rules their way. This behavior is a far cry from PAGA’s original purpose or “justice under the law.” Unchecked, PAGA will continue to be a profit machine for wealthy lawyers while driving more small businesses out of the state.

The most egregious aspect of PAGA is the incentive it provides trial lawyers to strong-arm vulnerable companies to settle before trial. This tactic allows lawyers to target and force large settlements from small businesses that they know cannot afford a drawn-out legal fight. Instead of risking their entire livelihoods to fight a minor violation in court, most business owners simply pay the ransom just to get the issue out of their hair, even when they are innocent.

PAGA empowers lawyers to file meaningless lawsuits in bad faith, knowing full well they have no case but can force a settlement anyway. How is that justice?

California’s PAGA woes extend far past our courtrooms. Businesses that rack up unnecessary legal fees defending themselves from malicious claims are forced to pass higher prices on to consumers or lay off employees just to stay afloat. Over the past year, this issue has impacted all our lives as prices for everyday goods continue to rise across the country.

The economic fallout caused by PAGA has been felt the most by those in our state’s working-class communities. When prices rise and small businesses suffer, lower-income individuals and families get hit the hardest. This drag on economic growth creates a vicious cycle of downward mobility.

According to a recent study by Citizens Against Lawsuit Abuse (CALA), if California lawmakers took real action to clean up our state’s lawsuit abuse epidemic, it could unleash over $46 billion in increased economic activity. This boon would positively change the lives of millions of Californians.

As a former lawmaker, I know what it means to put political differences aside to deliver meaningful results for those who need it most. I am calling on our elected representatives in Sacramento to reform PAGA and mitigate the damage it is currently causing. The law should provide employees who have their rights violated with an outlet to collect damages, while also protecting small businesses from predatory lawsuit abuse. These reforms will go a long way towards restoring California’s standing as a great place to do business.

George Runner is a businessman and former member of the State Board of Equalization, State Senate, and State Assembly representing Santa Clarita.


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Reform PAGA To Protect Small Businesses — George Runner — July 20, 2021

One comment

  1. I would hope as a former business owner that something could be done about PAGA, one the most egregious and abusive act created by the Dems that undermines small business. All it did was line the lawyer’s pockets and destroyed relationships between the employer and its employees.

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