AB 1513 Update: Ninth Circuit Confirms that "Carve-Out" Provisions in AB 1513 May Violate the Equal Protection Clause

By: Kyle D. Kring

While some employers are alleging that AB 1513 is unconstitutionally vague and an improper retroactive application of California rest break laws, at least two large farmers are contending that they were improperly excluded from using the AB 1513 affirmative defense to their advantage to resolve past rest break claims.

The Court of Appeals for the Ninth Circuit recently held that two large farmers' "complaint states a plausible claim for relief under the Equal Protection Clause, but fails to state a plausible claim that AB 1513's carve-outs amount to a Bill of Attainder." The equal protection claim was remanded to district court for further proceedings. As to the Bill of Attainder claim, the court ruled that plaintiffs were not individually punished by AB 1513, which is a necessary element of a bill of attainder.

AB 1513 created a safe harbor, giving employers an affirmative defense against new claims alleging failure to separately pay piece rate workers for rest breaks and nonproductive work time so long as the employer applied to the Department of Industrial Relations and made retroactive payments to all piece rate employees by December 15, 2016. Plaintiffs Fowler Packing Company, Inc. (Fowler) and Gerawan Farming, Inc. (Gerawan), both agricultural companies paying some employees on a piece-rate basis, believe they were improperly excluded from taking advantage of the AB 1513 affirmative defense. They claim that the only conceivable explanation for the carve-out provision preventing them from using the affirmative defense was that the "carve out" was necessary to get the United Farm Workers' support in passing the legislation. Plaintiffs may have a valid reason to believe so. 

The provision of AB 1513 at issue, precludes piece rate employers from using the affirmative defense if the defendant faces:

claims for paid rest or recovery periods or pay for other nonproductive time that were made in any case filed prior to April 1, 2015, when the case contained by that date an allegation that the employer has intentionally stolen, diminished, or otherwise deprived employees of wages through the use of fictitious worker names or names of workers that were not actually working.

Interestingly enough, plaintiffs allege that they are the target of three pending wage and hour class actions filed by the UFW in the seven years before the filing of Plaintiff's subject complaint.

While the State may be found to have singled out the two farmers- Fowler and Gerawan, the Ninth Circuit decision and the pending district court case regarding plaintiff's claim for relief under the Equal Protection Clause, will have no effect on AB 1513 as it relates to other employers who have taken advantage of the AB 1513 affirmative defense and the requirement to pay rest breaks separately beginning on January 1, 2016.

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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