With paid sick leave and the $15 minimum wage, unions have plenty of victories to celebrate this Labor Day. For business owners who employ the state’s labor force, it’s a different story.
While California can be an expensive place to operate, hundreds of thousands of business owners and executives still choose to survive and even thrive in what is the world’s sixth-largest economy. But our ranking – driven largely by the state’s thriving tech economy – obscures the difficulties faced by less sexy industries. And it ignores a hostile legal climate that rewards trial attorneys for suing legacy businesses that are desperately trying to remain here.
It’s not a partisan issue. Business owners of all political stripes, and even the United Farm Workers, have been hit with PAGA suits.
Consider my company, Timely Industries in Pacoima, which employs 193 people to manufacture pre-finished steel door frames. It’s a booming business. I have a warehouse full of already sold frames, and we’re running at full capacity to keep up with customer demand.
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Timely opened its doors in 1971, and its employees have always been on equal footing with customers. Imagine my shock when I received a phone call last December informing me that a disgruntled former employee had filed a complaint under the state’s Private Attorneys General Act.
Our offense? Providing employees the flexibility (which they had requested) to take lunch breaks together.
The former employee, who couldn’t file a wrongful termination suit, was counseled by his attorneys that the flexibility violated the state’s mandatory five-hour lunch break law. The complaint cost our company nearly $1 million – and cost our employees their desired lunchtime flexibility. Apparently, trial attorneys believe the purpose of our state’s 1,000-plus-page labor code is to let no good deed go unpunished.
Fortunately, there’s a silver lining: Because of our ordeal, I’ve now connected with dozens of other business owners who have faced similarly frivolous lawsuits. With their support, I’ve founded a new trade organization called the California Business & Industrial Alliance, which is focused on reforming the PAGA.
This Labor Day, I’m hopeful that business and labor can come together to reform a law that desperately needs change. As we celebrate the contributions that workers have made to the strength, prosperity and well-being of our state, let’s ensure our labor law is helping rather than hurting.
Tom Manzo, president of Timely Industries in Pacoima, is founder of the California Business & Industrial Association, an advocacy group in the San Fernando Valley. He can be contacted at TomManzo@CABIA.org.