SACRAMENTO, CA - Governor Schwarzenegger may be a fan of sequels but he must now fend off another frivolous-lawsuit bill. Senate Bill 174, a proposal to allow individual employees to sue their employers on behalf of current and former employees in minimum wage and overtime compensation recovery cases, is making its way through the capitol.

The current labor code states that "any employee receiving less than the legal minimum wage or the legal overtime compensation applicable to the employee is entitled to recover in a civil action the unpaid balance of the full amount of this minimum wage or overtime compensation, including interest thereon, reasonable attorney's fees, and costs of suit.'' This provision is just, letting individual employees get back what they
rightfully earned. But the "sue your boss'' proposal adds a twist.

SB 174 allows a worker, along with their attorney, to recover the unpaid wages of their fellow and former employees on their behalf. By granting representative status to suing employees, the legislation would in effect
turn every civil proceeding on this issue into a de facto class-action lawsuit.

Not only does SB 174 encourage predatory lawsuits, allowing workers to track down colleagues in order to create a larger class, it bypasses the current class certification process. In order to be certified as a class, the number
of claimants must be large enough so that going through each claim individually would overload the court. SB 174 makes no reference to class size. Further, most class actions include a provision that allows individuals to opt out.

SB 174 does not, and would circumvent the class-action requirements, opening the door for voracious attorneys to target businesses with deep pockets. Of course, legislation favoring the trial bar is nothing new in California.

In 2003, the similar SB 796 passed the legislature and was signed by Gov. Gray Davis. Called the Private Attorneys General Act, it permitted an employee to sue their boss on behalf of other employees for any accused
labor code violation.

What followed were frivolous lawsuits against businesses, including a $135 million lawsuit against the biotech firm Amgen. The lawsuit claimed that Amgen's labor code display poster harmed the employee and his co-workers because the poster's lettering was too small.

Governor Schwarzenegger, recognizing that these worthless suits had to be stopped, signed SB 1809 in August 2004. This bill mandated that the aggrieved employee give written notice of the alleged violation to the
applicable enforcement agency before pursuing legal action. The legislation also granted employers a 33-day window to correct the alleged infraction without penalty.

These sensible changes ensure that employees' claims are handled individually, preventing employees and attorneys from forming quasi-class actions. Only if the employer does not fix the infraction or if the
applicable agency decides after an investigation not to prosecute, can the employee file a lawsuit.

Now SB 174 proponents are saying that it is needed to combat extensive employer non-compliance, of which they provide no real evidence. They contend that bending the class action requirements is needed because the
state government lacks the resources to prosecute all violators.

While violations should be corrected, it should be done through proper regulatory channels, not by private attorneys general. If the legislature passes SB 174, the governor must veto this damaging proposal.

Anthony P. Archie is a public policy fellow at the Pacific ResearchInstitute. He can be reached via email at aarchie@pacificresearch.org.