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Private Attorneys General Act Backfires, Triggering Economic Devastation in California



Toyota, Nestle USA, Carl's Jr., and Jamba Juice are among the major companies that have moved their headquarters from California. (GV Wire Composite/Paul Marshall)
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California’s Private Attorneys General Act started with good intentions to protect workers but has morphed into a corporate nightmare — bringing an avalanche of minor violation lawsuits and costing businesses billions of dollars.

This analysis comes from Tom Manzo, president and founder of the California Business and Industrial Alliance, in an op-ed for the Orange County Register.

“PAGA is burdening businesses in California and driving many to leave the state,” Manzo writes. “Businesses that have fled the Golden State include Toyota, Nestle, Carl’s Jr., Jamba Juice, and many more — and these businesses are taking thousands of jobs with them.

“Unfortunately, if the California State Supreme Court fails to address these negative effects of PAGA, employers, and employees are right back where they started – bogged down in lengthy, expensive litigation.”

Watch: Reform PAGA Now!

Economic Impact and Predatory Practices

PAGA’s tolerance for trivial lawsuits causes damaging penalties for businesses, enriching predatory lawyers, the law’s opponents claim.

According to the California Chamber of Commerce, this widespread frivolous litigation has cost California businesses billions of dollars, forcing many businesses to cut back on hiring and investment.

“One of the biggest problems with PAGA is that it allows employees to file lawsuits for even minor violations of labor law,” Manzo opines. “This has led to a flood of lawsuits, many of which are as innocent as typos on a pay stub.”

Read more at The Orange County Register.