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SACRAMENTO — Senate leaders struck a compromise Monday on the so-called “sue your boss” law that had become a sticking point in the state budget impasse. Under the compromise, the Private Attorneys General Act of 2003 will be revised to require that employees first take complaints about wage and hour violations to state authorities before proceeding with a private suit. Should public agencies decline to pursue labor law violations, employees can sue for damages. The agreed upon changes will be folded into a pending bill, SB 1809, carried by State Sen. Joseph Dunn, D-Santa Ana, the author of the original law. SB 1809 also removes as grounds for suit some technical labor law violations, such as failure to post labor laws in the workplace. Republicans had said SB 796 was bad for business and sought its repeal as part of the budget negotiations. Democrats vowed to resist, but both sides struck a deal as part of a larger compromise expected to lead to a vote on the state budget that could come as early as today or Wednesday. “Both sides moved quickly off their original positions,” Dunn said Monday. “When we got behind closed doors and embargoed all information, both sides moved quickly to the middle for a compromise.” “This was give and take from both sides that resulted in a fair compromise that will deter the filing of frivolous lawsuits,” said Republican Sen. Dick Ackerman, R-Irvine, in a prepared statement. Passed in the waning moments of the fall 2003 legislative session, SB 796 created a private attorney general system for labor law enforcement, allowing employers to use the civil system to get their employees to follow the state Labor Code. The law, which took effect in January, has been viewed with alarm by business interests and their attorneys, who have called the measure a “job killer” that would drive businesses out of the state. The California Chamber of Commerce said that damages sought under the law in just nine cases totaled some $336 million. Monday’s compromise means SB 796 will no longer allow “lawsuits reaching potentially into the millions of dollars” for “minor infractions,” according to a chamber news release. Dunn said he hoped to have the terms of the compromise incorporated in his SB 1809 in time for Gov. Schwarzenegger’s signature by the end of the week. “I never viewed these discussions as part of the budget,” said Dunn, who is chairman of the Senate Judiciary Committee. “What the budget did was provide a backdrop so that all those interested in [SB] 796 could come to the table.”

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