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State AGs Taking On Bigger Workplace Enforcement Role

By Braden Campbell
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Law360 (August 28, 2020, 10:28 PM EDT) -- State attorneys general have stepped up their workplace enforcement efforts in recent years by suing employers that short workers on pay, fighting job misclassification and challenging noncompete agreements binding low-wage workers, according to a new report by the Economic Policy Institute.

The liberal think tank's Aug. 27 report runs down dozens such actions taken since 2018 by state attorneys general offices, some of which have recently formed units dedicated to prosecuting employment violations. These new efforts comprise another layer of protection for vulnerable workers in an especially precarious time, said report author Terri Gerstein, who heads the State and Local Enforcement Project at Harvard Law School's Labor and Worklife Program.

"Offices that have done this work have really had an impact and done really great work," said Gerstein, a veteran of the New York State Office of the Attorney General and that state's Department of Labor. "These issues are so important right now. They were before the pandemic and now even more so, and they should really be top-line issues for leaders in all of our states and cities."

Gerstein's report charts increased efforts by attorneys general to curb several workplace abuses, including wage theft, which occurs when employers short workers on overtime and minimum wage. Attorneys general in Massachusetts, New York, West Virginia and other states have filed numerous such actions, securing millions of dollars in combined pay for construction, health care, grocery, car wash and other workers, according to the report.

And attorneys general have contributed to the ongoing reckoning for workplace sexual harassers during the #MeToo movement. New York Attorney General Letitia James recently struck a nearly $19 million settlement in a suit against disgraced movie producer Harvey Weinstein, and Washington State Attorney General Bob Ferguson secured a $525,000 deal in 2018 for vegetable sorters in a workplace sexual harassment case. Attorneys general have also secured safer conditions for workers during the pandemic, penalized employers that deprived workers of sick days under their states' laws, and sued businesses for using child labor.

Employers should be mindful of the increasing involvement of attorneys general in workplace litigation and advocacy, said Christopher Wilkinson, a former U.S. Department of Labor attorney who now represents businesses for Orrick Herrington & Sutcliffe LLP. While the Trump administration has been more focused on fostering compliance with employment laws than cracking down on violators, state attorneys' vigilance means employers "still have to be on top of particular things like wage and hour laws," he said.

Historically, the attorneys general offices of California, Massachusetts and New York — which have long had dedicated workers' rights units — have been the most active in the employment space. But others have recently caught up amid growing awareness of income inequality and the precarity of low-wage work, Gerstein said.

Minnesota Attorney General Keith Ellison is a notable example of this trend, Gerstein said. The former representative left Congress to become attorney general in 2019 in order to take more direct action for the people of his state, including by fighting for low-wage workers.

"One of the things that was a high priority for him when he first took office was to start a unit that would focus on workers' rights and address wage theft. That was one of the first things he did," Gerstein said. Attorneys general in Washington, D.C., Illinois, Michigan, New Jersey and Pennsylvania have also launched employment-focused units in the last five years.

These efforts complement those of state labor departments, which often have specific mandates and are strained by the volume of complaints they take in and investigate. By contrast, attorneys general may have more flexibility to file systemic suits or confront novel wrongs, such as the proliferation of noncompete agreements barring low-wage workers from looking for new jobs, Gerstein said.

And state attorneys can advocate for workers and secure relief in ways private lawyers can't, according to Michael Rubin, a partner with plaintiff-side employment firm Altshuler Berzon LLP who focuses on appellate and impact litigation.

"Public officials' workplace rights enforcement authority is broader than private litigants'," Rubin said. "They have great intake capability and they have enforcement powers that can remedy issues on a broader scale, often without having to jump through the same procedural hoops."

Rubin pointed to recent suits by state and city attorneys in California accusing gig economy companies Uber, Lyft and DoorDash of misclassifying workers as independent contractors and depriving them of minimum wages, unemployment benefits and other protections afforded workers classified as employees.

Under California law, state enforcers are not bound by the employment agreements these companies cite to send would-be class actions to solo arbitration, where relief is more limited, Rubin said. Attorneys general may also be able to obtain injunctions and civil penalties not available to private lawyers, and can more freely pursue class litigation, he said.

State attorneys general have also muddied the regulatory waters by filing and in some cases winning lawsuits challenging federal employment rules, Wilkinson said. Red state attorneys general defeated several Obama administration employment regulations, including a DOL rule setting the salary level under which employers must pay overtime at nearly $48,000.

Attorneys general in blue states have continued this trend under President Donald Trump, with some success. New York's James recently won a court order striking down U.S. Department of Labor guidance limiting who can take paid time off and when under a federal law providing paid leave when workers can't do their jobs because of COVID-19.

"The aggressiveness in these areas with regard to these lawsuits [and] judges in many instances issuing surprising orders validating these lawsuits ... have really sort of made things, I would say, uncertain from a regulatory standpoint," Wilkinson said.

The Economic Policy Institute report calls on more state attorneys general to enter the employment space, although Gerstein conceded some have more capacity to do this than others. Some attorneys general are cash-strapped, others with majority-conservative legislatures may not have backing, and others still may have limited jurisdiction depending on their states' laws. But the most important component is the will to act.

"There's no roadmap," Gerstein said. "The only roadmap is to decide you're going to do it and assign someone to do it, and then they can figure it out and you can go from there."

--Editing by Emily Kokoll and Daniel King.

For a reprint of this article, please contact reprints@law360.com.

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