AB 1513- July 18, 2016 Update on Court's Hearing Concerning Plaintiff Nisei Farmers League's Motion for a Preliminary Injunction

By: Kyle D. Kring

Monday, July 18, 2016, I attended the hearing on Plaintiff Nisei Farmers League's Motion for a Preliminary Injunction in the Fresno Superior Court before Judge Jeffrey Hamilton Jr.

After a three and a half hour hearing, the court took the matter under submission, which means that the court will be issuing a formal written order, probably within the next few days given the impending deadlines. The court did not give any real indication as to which way the court was leaning on issuing the Preliminary Injunction. 

As you will recall, the court previously, as part of granting the Temporary Injunction, ordered that the July 1, 2016 deadline to register with the DIR for the affirmative defense was "tolled until 10 days after expiration of the TRO", which means until 10 days after the trial court issues its formal written order on the Preliminary Injunction.

By way of background, the trial court in deciding whether to issue a preliminary injunction, "must consider 'two interrelated factors,' specifically, the likelihood that plaintiffs will prevail on the merits at trial, and the comparative harm to be suffered by plaintiffs if the injunction does not issue against the harm to be suffered by defendants . . . if it does." (King v. Meese 43 Cal.3d at p.1226) The likelihood of plaintiffs' ultimate success on the merits "does affect the showing necessary to a balancing-of-hardships analysis. That is, the more likely it is that plaintiffs will ultimately prevail; the less severe must be the harm that they allege will occur if the injunction does not issue. This is especially true when the requested injunction maintains, rather than alters, the status quo.

While the court clearly believes there is some ambiguity in the definition of nonproductive time and "actual sums due", the critical question for the court is whether these terms are unconstitutionally vague, to which there is a great deal of case law discussing what exactly that means. The judge thought that it was telling that the sample form piece rate Itemized Wage statement on the DIR webpage was incorrect (and contrary to the law- Bluford and Gonzalez) as it did not provide a separate line item for rest breaks or nonproductive time. The judge also was of the opinion, without any real oral argument on the issue, that the 4% was well above actual sums due in most instances, thus making the term "actual sums due" more important.

After the lunch break, the court and the parties briefly discussed the Johnson v. U.S., a U.S. Supreme Court case, which arguably sets for the standard for an unconstitutionally vague law. In the afternoon portion of the hearing, the State's attorneys began to focus their argument on the fact that even if the law is somewhat ambiguous and needs some level of case law to interpret it, it may not be unconstitutionally vague and might not meet the standard to issue a Preliminary I njunction. The judge advised that he cannot re-write the statute to provide guidance as to what is "actual sums due" and "nonproductive time". The State argued that (1) the new law (AB 1513) doesn't affect the retroactive aspects of payment of piece rate compensation (basically saying that Bluford and Gonzalez say what they say and AB 1513); and, (2) piece rate is just an option to pay employees and employers don't need to utilize this system. However, in my opinion, the law clearly affects the retroactive aspects in that in order to take advantage of the affirmative defense offered by AB 1513, am employer needs to have some understanding of what to pay- minimum wage or average hourly rate (for which Bluford and Gonzalez provide little to no guidance) and what nonproductive time.

During the hearing, the judge asked the state the following question; "Is it the states position that each employer needs to make a guess as to what is nonproductive time and actual sums due?" The states response was that it is not the states responsibility to advise the public as to what is the law.

At the end of the day, the court didn't give any real feedback on which way it was leaning. While I think the court believes the statue is vague as to "actual sums" and the definition of nonproductive time, thus making it difficult on employers to do what is necessary to establish the affirmative defense under AB 1513; the court is struggling with what it can do to clarify the law, other than just to strike the law for being unconstitutionally vague which in my opinion is an unlikely result.

We will let you know how the court rules as soon as we find out.

Kyle D. Kring is the Founding Partner of Kring & Chung, LLP. He can be reached at (949) 345-1621 or kkring@kringandchung.com.

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