California’s Unique Worker Law Under Attack by Business Group

Mortgage lender Guaranteed Rate Inc., tea and coffee importer Royal Cup Inc., and a subsidiary of CIGNA Holdings Inc. are some of the businesses that have been hit in the first weeks of 2019 with claims brought by California workers deputized to sue on the state’s behalf.

California’s unique Private Attorneys General Act allows workers to step into the shoes of a state enforcement agency and represent other workers hurt by alleged labor law violations. Although similar in ways to class actions, PAGA claims aren’t subject to employment contracts that include agreements to resolve disputes only in individual arbitration.

But ...