Last Monday, the Labor & Employment Section of the Los Angeles County Bar Association held its annual Symposium, and I was honored to speak on the panel entitled “State of Play in PAGA and Class Action Litigation.” The Symposium was an all-day event, comprising numerous panels addressing key issues in employment litigation in 2026. I spoke as the only defense attorney on the only wage and hour panel.
My fellow panelists included an employee-side attorney, a mediator, and an expert specializing in data analysis, but in many ways, the panel reached the same conclusions. I want to take a beat here to share some of those conclusions, peppered with a few personal ones based on recent litigation trends as the first quarter of 2026 draws to a close.
One of the organizers of this Symposium remarked to me that they had trouble finding experts from the employer side to speak on wage and hour litigation. Many lawyers avoid wage and hour practice. It’s tedious work, involving technical data analysis and complicated legal issues. These cases rarely go to trial, and the issues are not juicy or exciting. The lawyers that handle these cases are often insurance defense attorneys under defense only policies, or lawyers at very large law firms for very big employers, charging several thousand dollars an hour. And even most of them do not relish these cases.
My practice has always involved some level of wage and hour work for my mostly mid-sized regional and local client base, focusing in large part on hospitality, retail, and manufacturing. Those industries are huge targets for these suits because of their larger employee count. Over my four decades in practice, I have watched the evolution of wage and hour litigation, influenced in great part by the California Supreme Court decisions in the late 90s to early 2000s, making it procedurally easier to bring these cases. We also had the passage of AB 60 in 2000, with the return of daily overtime and the introduction of meal and rest break penalties. Then we had the advent of PAGA, enacted in 2004 by our exiting Governor Gray Davis. In response to all this, we have seen the rise of class action waivers included in arbitration agreements, followed by the myriads of federal and state decisions honing and tailoring how these arbitration agreements can be used and enforced. Now factor in the explosion of huge plaintiff side law firms specializing in these mass collective action wage and hour cases, in a state with more lawyers per capita than anywhere in the country. In response to all that, we got the PAGA Reform of 2024, the effects of which we are just starting to see.
And that brings us to March 2026.
The inevitable conclusion of the panel last Monday is that wage and hour litigation marches on, despite the PAGA Reform. The trajectory of stand-alone PAGA cases may be changing, but that is driving wage and hour litigation in different directions to compensate. Because of the diminution in value of these PAGA suits, employee-side lawyers are doubling down on efforts to poke holes in our arbitration agreements AND focus on finding employers who do not use arbitration agreements or situations where we are missing the signed arbitration agreement.
While we all want to blame the political climate in California and the excess number of lawyers, please remember that there IS another cause to all this madness. There are many bad, non-compliant employers doing business in this state. For every one of you who tries to comply with every little Labor Code technicality, there are that many more businesses out there who intentionally run roughshod over their employees. And many more still who just open and operate in complete ignorance of the legal requirements. They are part of the system that harms all of you.
My team here is well poised to defend these lawsuits, whether it is taking advantage of the tools under the PAGA Reform, or dusting off the weapons we to fight the old school class action litigation. But you all know me – my mission is to keep you OUT of this litigation altogether, which is why I write this article. So let me break down the key takeaways from the Symposium and our state of play in March 2026.
Update and distribute your Employee Handbooks/Arbitration Agreements.
As I said above, with the PAGA Reform taking effect, employee side law firms are pushing back more on our arbitration agreements. Where we used to see firms stipulate and agree to arbitration, those same firms are now forcing us to make Motions to Compel, based on several factors. Some of the challenges we are seeing from the plaintiff-side firms involve some recent decisions by the California appellate courts. We revise our arbitration agreements every year to respond to these cases in real time, but that doesn’t help if you all fail to update your arbitration agreements. Whether you have your employees execute separate agreements (which IS better) or include them in the employee handbook as a failsafe, UPDATE YOUR AGREEMENTS.
And DISTRIBUTE YOUR UPDATED AGREEMENTS TO ALL YOUR EMPLOYEES. Yes, I know it’s a pain. Yes, I know it can be costly. None of this effort costs as much as ONE class action lawsuit, which can easily be six or seven figures, in addition legal fees. As Nike says, just do it.
Ensure ALL your employees sign your updated arbitration agreements, and DO NOT LOSE THEM!
There is no minimum period for “new” employees” to work without fear they could be your next class rep. Employees who work one shift without a proper break or wage statement can start a class action representing all your employees, going back four years, and those employees do not have to join or even approve of the class action. In California, they are automatically included. And these lawsuits can easily extend to “related entities” operating at separate sites.
Next – please, PLEASE, find a way to save these agreements. Save them in a safe file, or MUCH better, save them electronically where they will not be lost. I know you all are busy doing other important things for your businesses. But double and triple check your systems for this. The signed arbitration agreement may be the most important document you obtain and retain. I am not exaggerating. It is the first thing these employee side attorneys ask to see. Those of you facing this exposure understand.
Be wary of mass onboarding documents.
There have been a few recent cases that have denied Motions to Compel Arbitration when those arbitration agreements are buried in a pile of 50 other documents that the employee is expected to sign, all at once, in a rushed onboarding session. It’s usually not the only ground these agreements are tossed, but let’s not give them that argument. If you are asking employees to sign numerous documents upon hire, make sure you remind them that they can ask questions about any of them. Put that assurance in writing. Give them plenty of time. And ensure none of those other documents include an NDA or other “contract” with a choice of forum clause in conflict with your arbitration agreement.
And honestly, stop overloading these employees with paper. I know, we are the ones recommending those long employee handbooks. But honestly, that only requires one signature. Many of you distribute policies that are already in those lengthy employee handbooks. Go through your onboarding packages and pare them down. When I review and audit your onboarding forms, I tell most of you the same thing.
If possible, get a wet signature on the arbitration agreement. I know it’s not always possible, especially for remote employees. And I would rather have it electronically signed than not signed at all. But if we get both, it’s another argument in our favor. Then SCAN IT and SAVE IT!
Watch out if you’re not in a target industry.
The panel concluded, as have I, that considering the PAGA Reform, plaintiff firms are looking for new industries to hit. We know you restaurant and retail operators have been plagued by these lawsuits, but what about financial services, such as law, accounting, banking, insurance, or even entertainment? We are seeing more PAGA and class action lawsuits in these areas, and the exposure is even greater when employee pay is higher. Be careful out there.
Remember to audit your payroll compliance and train your managers!
Good employment practices may not stop these lawsuits from being filed, but it provides the tools we need to fight them. If we can defeat the class actions with the arbitration agreements, this compliance will do a LOT to squashing the PAGA only suits.
This PAGA Reform HAS been useful, which is why we see these attorneys scrambling to revert to the class action lawsuits and find new target employer groups. It feels like a game of whack-a-mole. But bobbing and weaving is what we do.
