California is one of the most expensive states for businesses to operate in–in large part due to lawsuit abuses that unfairly target businesses–earning the state the unflattering distinction of being the worst “judicial hellhole” in the nation. Making this even worse is the fact that the targets of these frivolous lawsuits are often the 3 million California small businesses that make up the backbone of our economy.
The breeding ground for these lawsuit abuses is created via the Private Attorney General Act (PAGA). Under PAGA, employers are being sued minor for frivolous items such as typos on a paycheck or not having a beginning and ending date on a pay check stub. Hard working employees ultimately bear the cost of these lawsuits.
While well-intended, PAGA has led to thousands of questionable lawsuits against employers both large and small. Trial lawyers pursuing expensive lawsuits are forcing many businesses to close down or move out of the state. According to the non-partisan Legislative Analyst’s Office, over 6,000 PAGA notices are filed every year and PAGA lawsuits increased by more than 400% from 2005 to 2013.
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