Attorney General Jeff Sessions has ordered prosecutors to stop settling corporate wrongdoing cases by requiring companies to make donations to third-party groups, a feature of some Obama-era bank settlements that congressional Republicans had opposed.
In a brief, one-page memo dated Monday and released on Wednesday, Mr. Sessions told Justice Department officials they could no longer include any provision in a civil or criminal settlement “that directs or provides for a payment or loan to any non-governmental person or entity that is not a party to the dispute.”
I had no idea what the Private Attorney General Act (PAGA) was, and I wondered what we could have possibly done wrong when it comes to our employees. As I spent time researching PAGA law I soon realized that this lawsuit could potentially cost the company millions of dollars. From what I understand, PAGA was originally designed to protect the employee; but unfortunately the pendulum has swung too far in the opposite direction and these days many ambulance-chasing attorneys open unfair litigation against good companies in California chasing that easy dollar.
The 3rd District Court of Appeal in Sacramento rejected that argument. The decision has caused new consternation at the chamber, which said in its appeal that the court risks “putting no limits on what money can be exacted and providing a road map for the evasion of Proposition 13’s limits” on increasing taxes.
The problem of PAGA lawsuits threatening small businesses is growing and solutions to deal with incidental violations are obvious. The legislature, to show its support for the state’s valuable small businesses, should create legislation giving small businesses the right to cure minor problems instead of putting businesses at risk for financial ruin.
The Los Angeles City Council took a step Tuesday toward borrowing up to $60 million to pay for legal payouts and court judgments despite a warning by City Controller Ron Galperin that the borrowing proposal is costly and unnecessary.