The year 2020 was a rough year for many businesses in California. Now that restrictions are being lifted, people are eager to leave their home and spend money on goods and services in the state. However, there is a downside to these times and that is the presence of lawsuit abuse that force companies to issue lay-offs that may affect the most vulnerable workers.
The “Sue Your Boss” law
In California, under the Private Attorneys General Act also known as the “Sue Your Boss” law, an aggrieved worker has the right to sue their employer on behalf of themselves, co-workers or the state. Due to the vague language of this law, many frivolous lawsuits are filed for minor issues including mere typos. In the worst of circumstances, these lawsuits rise to the level of class-action cases where even a legitimate claim is severely undercompensated for. And, these lawsuits can cause a small business who cannot afford the necessary legal representation or damages to close their doors.
The PAGA hurts small businesses
The Private Attorneys General Act ultimately hurts small businesses. It has real consequences on California residents. The American Tort Reform Foundation ranks California as the third worst “Judicial Hellhole” in the U.S. Attorneys who work for aggrieved employees and act in bad faith ultimately leads to the destruction of small businesses.
Learn more about business law
Businesses in California need to protect themselves against frivolous lawsuits at all costs. This post is for educational purposes only and does not contain legal advice. Our firm may be able to provide further information on business law may be a useful resource for those who want to know more about their rights and options.