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In a victory for unions and low-wage workers, Alameda County Superior Court Judge Steven Brick is expected to award a $1.4 million judgment this week to some 200 employees of the Cintas Corp. over failure to comply with the city of Hayward’s living-wage ordinance. The case is significant not only because plaintiffs are receiving an award for unpaid wages under the city ordinance � which might be a first in California � but also because the case will yield almost $260,000 in penalties obtained under the Private Attorney General’s Act, also known as the “Sue Your Boss” law. That $260,000 is more than the state Labor and Workforce Development Agency has collected under the act since it was altered two years ago. PAGA authorizes workers to sue their employers over infractions of the labor code, and the state is entitled to a share of any penalties. But apparently the state hasn’t been following up on dispositions, and has only collected $120,850 since 2004, according to Jehan Flagg, an LWDA spokeswoman. LWDA is entitled to 75 percent of all penalties awarded in suits, while workers keep 25 percent. “There’s no statutory requirement that parties notify us of the filing of a suit or any judgment. We don’t have comprehensive information on the suits that are filed under PAGA,” Flagg said. “We don’t ‘follow-up’ because there’s no way to know how long a case takes,” she adds. “We rely on the employees/attorneys to inform us.” That the state isn’t tracking these cases steams Michael Rubin, a partner with Altshuler, Berzon, Nussbaum, Rubin & Demain, who represented the Hayward plaintiffs and contacted the LWDA about his proposed judgment. “It doesn’t cost a lot to set up a procedure to make sure the state gets the money it’s owed,” Rubin said. The agency had been pushing a bill it claimed would fix the problem. AB 2997 would have required parties seeking a court settlement under PAGA to notify the labor agency no less than 20 days prior to filing the request with the court. Labor groups, among them UNITE HERE (which has fought Cintas in various campaigns), opposed the measure, however, saying that the involvement of the agency at such a late stage of the proceeding would interfere in settlements. “They were implying that there are all these evil wage-and-hour lawyers,” said Barry Broad, who represents UNITE HERE. “We thought there was this hidden agenda that instead of spending their resources prosecuting those who don’t pay the minimum wage, they are messing around in PAGA cases.” The agency recently dropped the measure after unions still objected to a counter-amendment, Flagg said, that required attorneys to notify the agency of settlements after the fact. Rubin thinks a statutory fix would be a good idea as more cases are adjudicated and penalties obtained under PAGA. The act, which Gov. Gray Davis signed into law in October 2003, was amended twice within the next year over fears it was opening the door to frivolous lawsuits over what management-side lawyers said were picayune violations of the labor code. The amendments gave the LWDA first dibs on investigating any potential violations. Plaintiff attorneys can only file suit pertaining to those violations if and when the LWDA passes on them. Some plaintiff attorneys say it isn’t always worth waiting for the department to seek the additional penalties. Robert Jesinger, a partner with Wylie, McBride, Jesinger, Platten & Renner, said he wasn’t counting on the LWDA investigating when he considered filing a PAGA suit against Farris Electric over unpaid vacation pay in Santa Clara County Superior Court. Now he finds himself waiting for the outcome of the agency investigation to see if he can file his complaint. “I am not sure if it was a great avenue,” he says. Other employment lawyers say they are handling similar cases, but nobody is tracking them. “There are tons of cases filed,” says Richard Simmons, a partner with Sheppard, Mullin, Richter & Hampton. He cites the legislative analysis for AB 2007 that says as many as 1,000 cases have been filed in California under PAGA. “[The act] does require plaintiffs to share their recovery with the state and because of that they do not keep the government apprised of their case and how it settles.” Rubin’s suit might also be one of the first regarding non-compliance with a living-wage ordinance. The LWDA has been notified of other such complaints, although it doesn’t track them. Rubin’s firm is also suing Cintas in Los Angeles over non-compliance with the living-wage ordinance there, and there are a handful of other suits around the country. Class certification was denied in the L.A. matter, which is currently on appeal. The Hayward case might encourage others wishing to challenge non-compliance of living- or minimum-wage ordinances in court. “The use of class-action vehicles to enforce living-wage laws may be the wave of the future,” says Paul Sonn, a lawyer with Brennan Center for Justice at New York University School of Law, who also filed an amicus brief in the Hayward case. “The problem with living-wage and minimum-wage laws is the lack of enforcement by government. “ Hayward may lead advocates of workers to turn to the courts to ensure that workers receive wages to which they are entitled,” he said.

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