PAGA refers to a California law that allows employees to sue their employer for labor-code violations on behalf of all fellow employees.
It means one person can sue for all violations an employer has committed, even if they only affected other people, as long as at least one affected him or her personally. It’s called the Labor Code Private Attorneys General Act of 2004.
The point is to have private citizens help enforce the labor code because the government can’t do it all alone. And it ain’t a bad deal. You step into the shoes of the government, and you sue to collect all the penalties it would impose if it were suing directly. In return, you (and your fellow employees) keep 25% of the proceeds. The state gets the rest, but with enough employees or violations, or both, you see some big numbers.
PAGA may rise in importance as more employers use class-action waivers in their employment agreements. The U.S. Supreme Court gave a green light to these waivers last week, but the decision doesn’t apply to PAGA because PAGA cases are not class actions for the benefit of employees. They’re law-enforcement actions for the benefit of the public. They seek civil penalties on behalf of the state, not money damages on behalf of people. When you sue under PAGA, you do it as a proxy or agent of the agencies that enforce the labor laws, and the government remains the real party in interest. That’s why it’s called a qui tam action, which comes from an old Latin phrase that means, “one who sues for the king as well as himself.” Not only would it violate public policy to let employees sign away a law that the state passed specifically to enforce other laws, but you couldn’t enforce that deal, anyway, because the state wasn’t a party to it.
More on this next week.