By Tom Scott

In recent weeks, California’s legislative leaders came together, worked with the Governor, and agreed to pass much needed reforms to the Private Attorney Generals Act (PAGA). As a concerned advocate for legal reform with deep roots in our state, I have spent twenty years of my life focused on enacting legal reforms like these that will benefit the California workforce and save the taxpayers money. I view the new PAGA reform legislation’s passage as a huge win that all Californians can get behind.

PAGA was originally codified to ensure employees had equal protection and access to bring cause against their employers if an individual was mistreated under existing labor law. It was needed legislation that after its original passage, was later abused by power hungry and greedy trial attorneys aiming to profit off of regulatory confusion. These same attorneys would advance suspect cases against a business with hopes that the employers charged would rather settle than face their day in court.

Many of these businesses were truly small businesses who were unaware that they had committed a violation in the first place. They had no time to fix the violation and did not have the operating budgets to hire a defense attorney to fight a case being levied against them. Many were forced to settle even if they did nothing wrong.

We are not only talking about a handful of PAGA abuses filed. A multitude of PAGA cases as well as case field under the Americans for Disability Act (ADA) were jammed through the California court system since PAGA became law in 2004. This has truly been a big business operation for trial lawyers in our state for many years.

PAGA has been a nightmare for small businesses up and down our state. Think about it this way: it has been hard enough for a small business owner to survive with no infringement. When you add in the constant worry of a frivolous PAGA lawsuit to be filed any day, it can certainly heighten one’s anxiety and make the employer question if staying in business is the way to go.

The changes that I believe are key in the new law are the statute of limitations on filed claims and a filing plaintiff will now have to prove they suffered the accused violations. I’m also glad to see that businesses will have a good faith opportunity to come into compliance with any indicated deficiencies. I can’t help thinking how many small businesses our state could have kept if reforms like these were enacted just a few short years ago.

In closing, I am pleased that our elected leaders in Sacramento found common ground between employees and employers and they acted. Something had to happen. It was my fear and the fear of others that inaction would continue, and more California small businesses would suffer into 2025 and beyond.

The resulting legislation is truly a compromise that benefits both employers and employees. The various parties choosing to come together to solve this through legislative compromise should be celebrated. It removed a contentious proposition from the ballot in November that would have cost our state millions of dollars.

I thank all the legislators who worked hard to get this compromise across the finish line. I thank Governor Newsom for signing these reforms into law. We should also thank the many legal reform advocates in our state including California Citizens Against Legal Abuse (CA CALA) who never wavered in their pursuit of reform.

It is my belief that the passage of this legislation will ultimately prove to be critical for small businesses and all size businesses in California to reach their full potential.

Tom Scott is the former Executive Director of California Citizens Against Lawsuit Abuse and lives in Folsom.