PAGA Cost Wal-Mart 65 Million Dollars

Tom Manzo
President, Timely Prefinished Steel Door Frames and President and Chairman of the Board at California Business and Industrial Alliance

If you are not familiar with PAGA, it stands for the Private Attorney General Act, a law referred to as the “sue your boss law”. It was enacted in 2004 and California is the only state in the union that has such a law. When the law was created there was a budget deficit in California and lawmakers decided to allow private attorneys to enforce labor laws. The trial lawyers loved it as it guarantees 100% of their fees and have learned how to turn this into the most lucrative business “shakedown” in California.

These lawsuits are comprised of late lunches, miscalculated incentives or bonuses, inaccurate employee ID numbers, and just about any labor law violation from the 1,400 page plus California Labor Law Digest. There have been a wave of PAGA Lawsuits against companies that have cashiers and not have an available seat.

After a long and drawn out battle it appears Wal-Mart will be settling on a 65 million dollar settlement over not having seats available for their cashiers. This amount is outrageous and is proof positive of how out of sorts this law is. Proponents of PAGA continue to say they are protecting employees from the bad employers who want to take advantage of them. Let’s look at the math on this settlement and you be the judge of who this law really protects.

The trial attorney representing the aggrieved employees will be receiving $ 21,664,500. This leaves $42,843,500 in the settlement fund. The state will receive 75% of that and the California LWDA will be able to deposit $32,132,625 into their account. $10,710,875 will go the 99,000 plus employees netting them a check roughly at $108 each. Some employees will recover less and some more based on length of employment and hours. If some of the employees do not respond or not found that money will also go to the state. All of this is over suitable seating and this is a law in California’s Labor Law Digest.

Wal-Mart is being told by the trial attorney suing them this is a good deal because maximum exposure could have been up to $522,184,200. He cited his findings on the cases against Rite-Aid and Target, and Target ended up settling for $9,000,000. Please keep in mind this is so a cashier can have a seat available if they choose to use it.

Seinfeld once had an episode where George bought the security guard a rocker at store so he did not have to stand all day. The guard fell asleep and the store was robbed, everyone laughed and thought this was funny. PAGA is no joke, and trial attorneys continue to sue as many companies as they can to score a huge payday. The trial attorney suing Wal-Mart states this is the biggest PAGA case yet and talks about all of his credentials and hard work he has put into the case. This was nine years in the making and his payday is $21,664,500 while the employee they claim to protect gets around $108, they do get stools now.

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