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Maine Follows California in Deputizing Workers to Sue Employers

June 18, 2021, 8:27 PM

The controversial California labor law known as the Private Attorneys General Act has found a foothold outside the Golden State, with Maine lawmakers approving a similar bill Friday.

California’s PAGA deputizes employees to seek civil penalties on behalf of the state for labor code violations. California courts have uniformly refused to push such claims into mandatory arbitration, prompting employers in the state to challenge the law, and worker advocates around the country to attempt to replicate it.

Maine is the first state to do so, with the passage of Senate President Troy Jackson’s (D) Act to Enhance Enforcement of Employment Laws.

The Covid-19 pandemic exposed the failure of current laws to ensure workers can seek justice for human rights and labor violations in the workplace, Jackson said.

His bill would authorize workers alleging violations of certain labor laws, including wage and hour violations, to bring private enforcement in the name of the state after providing notice to the Attorney General, the Department of Labor, or the Maine Human Rights Commission.

Part of the problem in Maine is that workers don’t always realize they’re signing away their right to sue when they start a new job, Jackson said in a statement.

The other challenge is that state agencies lack the resources to take up all legitimate cases. “If the state is unable to take the case, workers deserve somewhere else to turn. These bills would allow folks to access the resources they need in the wake of injustice,” Jackson said.

Not an Exact Copy

The bill is similar, but not identical to PAGA, Maine attorney Jeff Young, who sits on the board of the National Employment Lawyers Association, told Bloomberg Law in May.

While aggrieved workers in California must take action themselves under PAGA, Maine’s version allows advocacy groups and other organizations to sue on behalf of workers, Young said.

And though California’s Labor and Workforce Development Agency has 90 days to intervene in a proposed PAGA suit, Maine officials get 180 days to decide whether to bring suit themselves and another 90 days to step in and take over the litigation.

That extended time addresses one of the primary concerns lawmakers and others have raised about California’s law, including Maine’s Attorney General Aaron Frey, who urged lawmakers to vote against the bill at a public hearing in May.

The bill would interfere with the attorney general’s ability to ensure litigation is consistent with his position in other cases, Frey said.

Frey’s office spoke to counterparts in California, “and we did not walk away convinced that it was a model that was going to work very well in the end,” he told state lawmakers.

Ongoing Challenges

Last year, California pocketed more than $100.7 million in PAGA penalties, according to the state’s Labor and Workforce Development Agency. That’s up from $88 million in 2019.

But California businesses that paid out that $100 million continue to challenge the law, including arguing that the top state court’s precedent against arbitrating PAGA claims conflicts with more recent pro-arbitration U.S. Supreme Court rulings.

The California Business and Industrial Alliance sued the state in 2018 saying PAGA has become “a tool of extortion and abuse” that allows “greedy and unscrupulous plaintiffs’ attorneys to shake down California employers.”

Challenges like this may be part of the reason other states haven’t passed PAGA legislation, Myriam Gilles, a professor at Cordozo Law School in New York told Bloomberg Law in May.

“States are worried about wading into this area,” Gilles said, because the U.S. Supreme Court has continued to strike down state statutes that avoid arbitration, finding them to be preempted by the Federal Arbitration Act.

The vote on Maine’s LD1711 was 21-13 in the Senate, and 74-55 in the House. The bill faces additional procedural votes in the Legislature before heading to the governor’s desk for a signature, according to a Friday statement from President Jackson’s office.

To contact the reporter on this story: Maeve Allsup in San Francisco at mallsup@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Nicholas Datlowe at ndatlowe@bloomberglaw.com

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