California’s trial lawyer racket, and how to end it – San Bernardino Sun

California is the world’s 4th largest economy. But if you’re one of the small businesses that power our state, the only award you get is a frivolous lawsuit.

Thank the Private Attorneys General Act (PAGA), one of the country’s most abusive and most-abused labor laws. PAGA was originally meant to protect workers from bad employers, but it has become a tool for predatory lawsuits. Minor technical violations can lead to million-dollar payouts, transforming PAGA into a cash cow for wealthy trial lawyers and a crushing threat to small businesses throughout the state.

Here’s how the scam works. PAGA allows trial lawyers to file lawsuits for even minor technical infractions, like the wrong font size on a pay stub or a date formatted incorrectly. The potential fines and fees can run into the millions of dollars, causing many small businesses to settle out of fear of a devastating court outcome. Many of these lawsuits have nothing to do with protecting workers and everything to do with enriching the trial lawyers, who get one-third of the PAGA payout.

After the lawyers have taken their cut, most of the rest of the money goes to the government. No wonder they’re not even trying to rein in this abuse! Meanwhile, employees lose: A study by the California Business and Industrial Alliance found that employees earn less and it takes longer to receive their money in a PAGA court case, as compared to a case decided by the state.

While the California Legislature has passed laws allowing private employers to face PAGA claims in court, it quietly carved out an exemption that shields government agencies from those same claims. In practice, the message is clear: “Sue the business owner, not the government.”

This double standard ensures the government agencies are protected, while minority, women-owned, immigrant-owned, mom-and-pop, and family-run businesses are left wide open to frivolous, predatory lawsuits. It offends the principle of equal justice under the law and undermines public trust.

The California Legislature, backed by the powerful trial lawyer lobby, for years blocked meaningful efforts to reform PAGA. In 2024, Gov. Gavin Newsom signed a package of so-called “improvements” into law, which were supposed to reform PAGA’s worst excesses. The trial attorneys apparently missed the memo: State data shows they’re still filing PAGA notices at a rapid clip, eager to get a quick payday and move on to the next target.

PAGA is a state-sanctioned racket that rewards political donors and punishes job creators. While Sacramento politicians protect their trial lawyer allies, small businesses are left to fend for themselves. It doesn’t have to be this way. California needs leadership willing to stand up to special interests and put working people and small business owners first.

We need to end this abuse and restore fairness. Overhaul California’s broken PAGA system and protect our job creators by:

• Appointing pro-reform leadership at the Labor and Workforce Development Agency.
• Installing a Secretary of Labor and State Labor Commissioner committed to impartial enforcement, timely resolutions, and restoring public trust.
• Using executive authority to reclaim enforcement from profit-driven lawyers. Direct the Labor Commissioner’s office to review and investigate every claim, eliminating “jackpot” lawsuits and ensuring that the state, not ambulance-chasing trial lawyers, determines which violations warrant action.
• Modernizing enforcement with smarter tools. By deploying AI-assisted case management and data analytics, we’ll flag abusive claims, prioritize credible cases, and accelerate investigations, delivering faster, fairer outcomes for both workers and employers.
• Replacing lawsuits with an administrative model, by working with the Legislature to scrap the current “sue-first” system and institute an administrative process: credible claims lead to citations and remedies, not million-dollar windfalls for lawyers.