California Changes to Private Attorneys General Act (PAGA) Initiative (2018)

California Changes to Private Attorneys General Act (PAGA) Initiative

Election date
November 6, 2018
Topic
Civil and criminal trials and Labor and unions
Status
Not on the ballot
Type
State statute| Origin
Citizens

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The California Changes to Private Attorneys General Act (PAGA) Initiative (#17-0035; #17-0036; #17-0037) was not on the ballot in California as an initiated state statute on November 6, 2018.

Sean McNally, CEO of KBA Engineering, board member of the California Workers Compensation Institute, and co-chair of the California Chamber of Commerce Amicus Committee filed three versions of the ballot initiative.[1] The initiatives would all had made changes to the Private Attorneys General Act (PAGA). As of 2018, PAGA was part of the state's Labor Code and allows employees to file civil lawsuits against their employers for labor violations on behalf of themselves and other employees. PAGA allowed an employee to act as a private attorney general in place of the state's Labor and Workforce Development Agency (LWDA). PAGA provided employees who win a case with an award that includes reasonable attorney's fees and costs.[2][3][4][5]

Initiative #17-0035 would have repealed PAGA; put the California Labor Commissioner, an appointed executive official, in charge of issuing civil penalties for labor violations; and provided that employers acting in good faith reliance on an administrative regulation, ruling, or interpretation of the Labor Commissioner.[6]

Initiative #17-0036 would have added a Part 14 to the Labor Code following PAGA; prohibited attorneys from collecting contingency fees on PAGA lawsuits; required that attorneys charge no more than 150 percent of the rate charged by the state attorney general; subjected attorneys' hours for billing to court review and approval; required that an employee personally suffer an actual injury to sue under PAGA; limited discovery rights in PAGA cases; required complaints to be filed under penalty of perjury; required attorneys involved in PAGA cases to undergo an annual eight-hour legal ethics training; and provided that employers acting in good faith reliance on an administrative regulation, ruling, or interpretation of the Labor Commissioner not be penalized not be penalized.[7]

Initiative #17-0037 would have added a Part 14 to the Labor Code following PAGA; prohibited attorneys from collecting contingency fees on PAGA lawsuits in excess of specific limits; required that an employee has personally suffered an actual injury to sue under PAGA; limited discovery rights in PAGA cases; required complaints to be filed under penalty of perjury; only awarded PAGA penalties if the employer's labor violation was willful; required attorneys involved in PAGA cases to undergo an annual eight-hour legal ethics training; and provided that employers acting in good faith reliance on an administrative regulation, ruling, or interpretation of the Labor Commissioner not be penalized.[8]

## Contents

* 1 Text of measure
* 1.1 Ballot title
* 1.2 Petition summary
* 1.3 Fiscal impact
* 1.4 Full text
* 2 Path to the ballot
* 2.1 #17-0035
* 2.2 #17-0036
* 2.3 #17-0037
* 3 See also
* 4 External links
* 5 Footnotes

## Text of measure[edit]

### Ballot title[edit]

The official ballot titles for the three proposals were as follows:[9]

Initiative 17-0035

Eliminates Workers’ Authority to Recover Penalties from Offending Employers for State Labor-Law Violations. Limits Penalties for Labor-Law Violations. Initiative Statute.[10]
Initiative 17-0036

Limits Workers’ Authority to Recover Penalties from Offending Employers for State Labor-Law Violations. Initiative Statute.[10]
Initiative 17-0037

Limits Workers’ Authority to Recover Penalties from Offending Employers for State Labor-Law Violations. Initiative Statute.[10]

### Petition summary[edit]

The summaries provided for inclusion on signature petition sheets were as follows:[9]

Initiative 17-0035

Repeals current law that permits employees to file lawsuits on behalf of themselves and other aggrieved employees to recover monetary penalties for violations of state labor laws, including laws governing unpaid wages. Limits penalties State may assess for labor-law violations, changes State’s share of assessed penalties from 75 to 50 percent, and exempts employers from penalties in certain circumstances.[10]
Initiative 17-0036

Limits current law that permits employees to file lawsuits on behalf of themselves and other aggrieved employees to recover monetary penalties for violations of state labor laws, including laws governing unpaid wages. Changes State’s share of assessed penalties from 75 to 50 percent and exempts employers from penalties in certain circumstances. Prohibits contingency-fee arrangements and limits hourly rates for attorneys representing employees. Limits information employers must disclose.[10]
Initiative 17-0037

Limits current law that permits employees to file lawsuits on behalf of themselves and other aggrieved employees to recover monetary penalties for violations of state labor laws, including laws governing unpaid wages. Changes State’s share of assessed penalties from 75 to 50 percent and exempts employers from penalties in certain circumstances. Limits contingency-fee arrangements for attorneys representing employees. Limits information employers must disclose.[10]

### Fiscal impact[edit]

Note: The fiscal impact statement for a California ballot initiative authorized for circulation was prepared by the state's legislative analyst and director of finance.

The fiscal impact statements were as follows:[9]

Initiative 17-0035

Net reduction in state trial court costs that could reach the low tens of millions of dollars annually. Reduction in state penalty revenue used for labor law enforcement in the low tens of millions of dollars annually. Likely minor net impact on state administrative costs to enforce labor laws.[10]
Initiative 17-0036

Net reduction in state trial court costs that would likely be in the millions of dollars annually, but could reach the low tens of millions of dollars annually. Reduction in state revenue used for labor law enforcement potentially up to the low tens of millions of dollars annually. Likely minor net impact on state administrative costs to enforce labor laws.[10]
Initiative 17-0037

Net reduction in state trial court costs that would likely be in the millions of dollars annually, but could reach the low tens of millions of dollars annually. Reduction in state revenue used for labor law enforcement potentially up to the low tens of millions of dollars annually. Likely minor net impact on state administrative costs to enforce labor laws.[10]

### Full text[edit]

The full text of the measure is available for Initiative #17-0035, Initiative #17-0036, Initiative #17-0037.

## Path to the ballot[edit]

See also: California signature requirements and Laws governing the initiative process in California

In California, the number of signatures needed to qualify a measure for the ballot is based on the total number of votes cast for the office of governor. For an initiated state statute, petitioners must collect signatures equal to 5 percent of the most recent gubernatorial vote. To get a measure on the 2018 ballot, the number of signatures required was 365,880. In California, initiatives can be circulated for 180 days. Signatures needed to be certified at least 131 days before the 2018 general election, which was around June 28, 2018. As the signature verification process can take several weeks, the California secretary of state issues suggested deadlines for several months before the certification deadline.

The timelines for the initiative petitions were as follows:[11]

### #17-0035[edit]

* Sean McNally submitted a letter requesting a title and summary on October 6, 2017.
* A title and summary were issued by the California attorney general's office on December 12, 2017.
* Proponents of the initiative needed to submit 365,880 valid signatures by June 11, 2018, in order for it to make the ballot.
* On January 18, 2018, the secretary of state's office announced that the initiative's proponents withdrew the measure from consideration.

### #17-0036[edit]

* Sean McNally submitted a letter requesting a title and summary on October 6, 2017.
* A title and summary were issued by the California attorney general's office on December 12, 2017.
* Proponents of the initiative needed to submit 365,880 valid signatures by June 11, 2018, in order for it to make the ballot.
* On January 18, 2018, the secretary of state's office announced that the initiative's proponents withdrew the measure from consideration.

### #17-0037[edit]

* Sean McNally submitted a letter requesting a title and summary on October 6, 2017.
* A title and summary were issued by the California attorney general's office on December 12, 2017.
* Proponents of the initiative needed to submit 365,880 valid signatures by June 11, 2018, in order for it to make the ballot.
* On January 18, 2018, the secretary of state's office announced that the initiative's proponents withdrew the measure from consideration.

## See also[edit]

* 2018 ballot measures
* California 2018 ballot propositions
* California ballot measures

## External links[edit]

* Initiative #17-0035
* Initiative #17-0036
* Initiative #17-0037

## Footnotes[edit]

1. ↑ California Coalition on Worker's Compensation, "Sean McNally," accessed October 11, 2017
2. ↑ California Labor and Workforce Development Agency, "Private Attorneys General Act (PAGA)," accessed October 12, 2017
3. ↑ Shivani Sutaria Law, "High Cost Violations: The 4 P’s of California’s Wage and Hour Laws – Penalties, Plaintiff’s Attorneys’ Fees, Personal Liability and PAGA," June 28, 2016
4. ↑ Goodman, Matthew J. "The Private Attorney General Act: How to Manage the Unmanageable." Santa Clara Law Review 56, 2. (2016): pages 413-455.
5. ↑ JDSUPRA, "PAGA Reform for Real? Three Different Versions of PAGA Reform Initiative Filed with California Attorney General," October 9, 2017
6. ↑ California Attorney General, "Initiative #17-0035," October 6, 2017
7. ↑ California Attorney General, "Initiative #17-0036," October 6, 2017
8. ↑ California Attorney General, "Initiative #17-0037," October 6, 2017
9. ↑ 9.0 9.1 9.2 California Secretary of State, "Initiatives and Referenda Cleared for Circulation," accessed March 6, 2017
10. ↑ 10.0 10.1 10.2 10.3 10.4 10.5 10.6 10.7 10.8 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
11. ↑ California Secretary of State, "Ballot Measures," accessed May 22, 2017

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