Virus Time-Out for Labor Violation Suits Sought by Trade Group

March 27, 2020, 7:56 PM

A California trade group wants the most populous U.S. state to temporarily block employees from suing employers over labor violations as the cornovirus outbreak fuels layoffs and business closures.

The California Business and Industrial Alliance asked Governor Gavin Newsom to ban employees for 90 days from filing claims under a state law that gives employees the right to step into the shoes of the state labor commissioner to sue over all manner of infractions.

In the last week, 167 such complaints have been filed under California’s Private Attorneys General Act, many targeting hospitals and health-care service providers, the group said this week in a letter to Newsom. Under the law, which has generated thousands of lawsuits since it was enacted in 2004, workers keep 25% of any penalties won and the rest goes into state coffers, not including fees for the lawyers, which can exceed the total paid to workers and the state.

“These claims, while lucrative for trial lawyers, often cost businesses thousands if not millions of dollars in settlement and legal fees for even a minor infraction of California’s labor code,” the group said. “Aggrieved employees typically recoup far less.”

The group’s founder, Tom Manzo, said he’s awaiting a response from Newsom, a Democrat elected in 2018 with strong support from labor.

Attorney Shannon Liss-Riordan, who specializes in representing employees suing for labor code violations, said the request was “outrageous.”

“There should be no moratorium on legal claims now, nor on the justice system as a whole,” Liss-Riordan said in an email. “Judges and lawyers are now doing all they can to keep our legal system operating and serving the people who need it. Many need justice now more than ever.”

To contact the reporter on this story:
Malathi Nayak in San Francisco at mnayak21@bloomberg.net

To contact the editors responsible for this story:
David Glovin at dglovin@bloomberg.net

Peter Blumberg, Joe Schneider

© 2020 Bloomberg L.P. All rights reserved. Used with permission.

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