Too Complicated to Prosecute For Wage Theft? Not Anymore, Says the California Supreme Court

In a state where wage theft costs workers an estimated $2 billion a year, one company tried to turn court “efficiency” into a shield against accountability.

Royalty Carpet Mills, Inc. (a major California manufacture) recently argued that its labor violations were too “complex” to prosecute collectively.

This specific legal case of Estrada v. Royalty Carpet Mills, Inc closes that loophole while exposing how “manageability” became corporate America’s latest weapon to weaken worker protection laws.

That’s what this article is about, so please continue reading on 🙂

A Pattern of Legal Evasion

How the System Failed

• Royalty Carpet Mills faced Private Attorneys General Act (PAGA) claims for violating California labor laws… specifically, denying employees legally required meal breaks.
• The company argued that the claims were too “unmanageable” because proving them would require testimony from hundreds of employees.
• A lower court accepted that argument and struck down the workers’ collective claim entirely, not because it was false, but because it was too complicated to try.
• The Court of Appeal reversed that decision, holding that courts cannot dismiss PAGA claims solely on “manageability” grounds.
• The California Supreme Court declared that “striking a PAGA claim on manageability grounds alone… is inconsistent with a victim / plaintiff’s statutory right” and exceeds a trial court’s authority!
• The ruling reinstated the workers’ right to a new trial on the meal-break violations.

The Macro Consequences

💸 The Economic Fallout

This decision prevents companies from exploiting procedural loopholes to dodge liability. Had Royalty Carpet Mills succeeded, corporations across California could have rendered wage laws unenforceable by claiming complexity. The court noted that striking PAGA claims “reduces judicial efficiency” and risks “underenforcement of California law”.

🧍🏽‍♀️ The Public Impact

The Private Attorneys General Act (PAGA) allows workers to act as private enforcers of labor law, recovering civil penalties on behalf of the state. Which maths out to being 75% to the state, 25% to the workers.
Allowing companies to strike these cases on “manageability” grounds would have stripped away a key enforcement mechanism protecting hundreds of thousands of low-wage workers.

🌱 The Erosion of Trust

The ordeal revealed how evil corporations have weaponized judicial discretion. “Manageability”, a concept meant to streamline trials, was being recast as a tool to completely and totally erase otherwise valid legal challenges.
The California Supreme Court’s decision here reaffirms that justice cannot hinge on administrative convenience, restoring some confidence in myself that complex labor cases will still see their day in court.