Among California Gov. Gavin Newsom’s worst kept secrets are his 2028 presidential aspirations. His chest thumping over suing the Trump Administration’s tariff policies is yet another tell.
The governor has recently stated: “To our international partners: California is a stable, reliable partner. We want your business.”
But Newsom has made it clear he does not share that same attitude when it comes to businesses that already call California home. Instead of supporting job creators, Newsom and his allies in Sacramento continue to push bad policies that chase businesses out of the state.
A prime example is California’s Private Attorney General Act. PAGA allows employees to sue their employer for any perceived violation of the state’s 1,100-page labor code. This includes going after employers for accidental infractions, such as missing a hyphen on a paystub.
PAGA alone has inspired more representative lawsuits than any other statute in America over the past year. According to the California Department of Industrial Relations, plaintiffs filed more than 9,400 PAGA notices in 2024, a nearly 22% increase over 2023, and a whopping 85,936% increase over the eleven PAGA notices filed in 2006.
Last year’s reforms to the law were billed as the key to “make it easier for businesses to operate” under the PAGA regime. In reality, PAGA notices have matched their 2024 pace through the first three months of this year. Litigating one of these PAGA notices can cost an employer hundreds of thousands of dollars — costs so high that labor unions and the state have built in exemptions as a result. And that’s not to mention the settlement fees.
Now, Democratic state Sen. Scott Wiener, not satisfied with the existing PAGA regime or the alternative process of filing a report with the California Labor Commissioner’s Office, has introduced Senate Bill 310. This bill creates yet another legal avenue to penalize employers, this time through independent civil action.
If SB 310 passes, what little reform that PAGA did get after twenty years will be wiped out, and we should expect the amount of harmful costly litigation to grow exponentially.
Thanks in part to Newsom’s latest debacle of pushing a $20 minimum wage in the fast-food restaurant industry, the cost of doing business here is already one of the most burdensome in the country. Adding an explosion of costly litigation resulting from policies like SB 310 would put the nail in the coffin for businesses across the Golden State.
Defeating SB 310 and repealing PAGA are essential steps towards sending the message to employers that California is open for business. Right now, this is a message that only exists between Newsom’s ears.
Business owners can no longer shoulder the burden of PAGA, in addition to the already high-cost of operating in California. It’s no wonder we’ve seen a mass exodus of employers to states like Texas, Nevada, and Arizona. When they go, they take thousands of jobs with them, and our population stagnates or even declines.
To Newsom and our legislators: California businesses are stable, and a reliable partner to California. We want our governor and legislators to treat us like you want our business.
Tom Manzo is the president and founder of the California Business and Industrial Alliance.
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