Teukolsky Law founder Lauren Teukolsky was quoted in a Courthouse News story on the Private Attorneys General Act ("PAGA"), a California law that allows private attorneys to stand in the shoes of the State to bring labor enforcement actions against employers who break the law. PAGA is under attack by a consortium of businesses that are suing to have PAGA declared unconstitutional. Teukolsky Law represents a group of 57 nurses who have sued a Tenet-owned hospital in Templeton, CA for labor violations, including failing to provide rest breaks because the hospital was understaffed and the nurses did not want to leave their patients unattended.
Nine of the nurses have brought a PAGA action in San Luis Obispo Superior Court to represent all nurses at the hospital because they all signed arbitration agreements requiring them to bring their claims in secret, private arbitration proceedings. Courts currently allow employees to bring PAGA claims in open court, even if they have signed arbitration agreements. The arbitration agreements the nurses signed contain class action waivers, which means that the nurses are not allowed to bring an action to represent all of the nurses with similar claims at the hospital -- except through PAGA.
If business groups are successful in having PAGA declared unconstitutional, this could greatly impair the ability of employees to vindicate their workplace rights. Teukolsky Law will continue to fight every day for the rights of employees against powerful business lobbies that seek to take away their rights. If you believe that your rights have been violated, contact us today for a free consultation.
Today, the California Senate voted to approve AB 3080, a bill that would prohibit employers from requiring their employees to arbitrate employment-related claims against their employers. Under current law, employers can require their employees to sign arbitration agreements as a condition of employment. Arbitration is a private court system without judges and juries. Instead, arbitrators -- usually retired judges -- are paid to adjudicate claims. Arbitrations are usually confidential, and held in hotel conference rooms or other private locations. If the bill becomes law, employers in California will no longer be allowed to require employees to give up their right to go to court. Instead, employees will be able to sue their employers in court for discrimination, retaliation, sexual harassment, and a host of other claims that employees can bring under California's Fair Employment and Housing Act, one of the strongest anti-discrimination laws in the country. Employers will also be prohibited from requiring employees to arbitrate wage-and-hour claims under the California Labor Code.
Governor Brown has until September 30 to sign or veto the bill. If he signs AB 3080 into law, it will almost certainly be challenged by employers as contrary to the Federal Arbitration Act, a federal law which expresses a preference for cases to be resolved through private arbitration. Nonetheless, today's Senate vote is a huge win for employees. Many of our clients have no idea that they have signed arbitration agreements giving up their rights to sue their employers in court. Forced arbitration agreements are contrary to American values, and should be ended.
On July 13, 2017, the California Supreme Court issued a blockbuster decision in Williams v. Superior Court, holding that plaintiffs who bring representative wage-and-hour actions under California's Private Attorney General Act ("PAGA") have broad discovery rights and are entitled to obtain a the names and contact information of other "aggrieved employees" without making a heightened showing that the employer has violated the law. This is the most significant PAGA decision since the Supreme Court held in Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal. 4th 348 (2014), that an employee’s right to bring a representative PAGA action may not be waived through a forced arbitration agreement.
While employers will undoubtedly bemoan the Williams decision, let's just remember that we are on the precipice of a Supreme Court decision in the 2017-2018 term that will likely eviscerate wage-and-hour class actions on a nationwide basis. If the Supreme Court rules as I suspect they will, PAGA will be the only remaining vehicle for employees to bring representative wage-and-hour actions. This shifting class action landscape was undoubtedly on the minds of the Cal Supremes when they issued the pro-employee Williams decision yesterday.
While employment class actions are likely on their way out the door, employees in California can still pursue representative claims on behalf of themselves and other affected employees under the Private Attorney General Act, aka "PAGA." Under PAGA, an "aggrieved employee" can seek penalties and unpaid wages against an employer for violations like the failure to pay overtime and minimum wage, and the failure to provide meal and rest breaks. In Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal. 4th 348 (2014), the California Supreme Court held that an employee cannot be compelled to waive her right to bring a representative PAGA claim in a predispute arbitration agreement. In a trio of cases decided in the past year, the California Court of Appeals held that employers cannot use predispute arbitration agreements to compel a PAGA case to arbitration. See Betancourt v. Prudential Overall Supply, 9 Cal.App.5th 439 (2017); Hernandez v. Ross Stores, Inc., 7 Cal.App.5th 171 (2016); and Tanguilig v. Bloomingdale’s, Inc., 5 Cal.App.5th 665 (2016). This means that employees who have signed arbitration agreements can still bring their representative PAGA actions in court. In response to Iskanian and its progeny, the employer lobby, including the Chamber of Commerce, is hard at work trying to pass legislation to limit PAGA's reach. Their efforts so far have been largely unsuccessful, but who knows what next year's legislative session will bring.
Lauren Teukolsky is the founder and owner of Teukolsky Law, A Professional Corporation.