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Supreme Court limits California labor law that allows private suits against employers

LA Times

In a victory for California employers, the Supreme Court on Wednesday placed limits on a state labor law that authorizes private lawsuits on behalf of groups of workers, even if they had agreed to resolve their disputes through individual arbitration. The majority ruled the Federal Arbitration Act preempts or overrides the state law. The outcome appears to limit private suits but not block them entirely. The conservative high court has repeatedly overruled judges in California who refused to uphold arbitration clauses. Over nearly two decades, the justices have steadily closed the door to courts and lawsuits and instead upheld private arbitration as the means to resolve costly disputes, whether involving banks, credit cards, retail purchases or the workplace. In 2004, the California Legislature adopted a different approach to protect the rights of workers. The Private Attorneys General Act said lawyers may file claims against an employer seeking penalties on behalf of a group of employees and for multiple violations of the labor code. Three-fourths of the money recovered is paid to the state. Lawmakers said the state’s labor laws were going unenforced, even when workers were cheated out of their wages or not paid extra for overtime work. They said the state did not have enough staff of its own to police industries where “labor law violations are the most rampant, including agriculture, garment, construction, car wash, and restaurants.”

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