Publications Archives

Is There Federal Preemption for California AB 1513 Claims Against California Trucking Companies for Rest and Recovery Breaks and Non-Productive Time?

By: Kyle D. Kring and Tyler Kring

AB 1513/Labor Code section 226.2 provides that companies who pay piece rate must pay for rest and recovery breaks and non-productive time separate and in addition to traditional piece rate wages. Trucking companies often opt to use piece rate pay because it incentivizes drivers to perform as efficiently as possible. In 1994, Congress aimed to prevent states from interfering with the trucking carriers' way of doing business and drafted a preemption provision in the Federal Aviation Administration Authorization Act of 1994 (FAAAA). The "safe harbor" affirmative defense which the recently passed AB 1513 create, has resulted in a number of trucking companies signing up with the Department of Industrial Relations (DIR) for the AB 1513 affirmative defense. The intersection between the FAAAA and AB 1513 has raised the question whether federal law, specifically the FAAAA, preempts California meal and rest break law including AB 1513/Labor Code section 226.2?

The answer to this question may be costly for California truck companies. The Ninth Circuit, in Dilts v. Penske Logistics, refused to adhere to Congress, holding that federal preemption did not apply to meal and rest breaks in California because the state laws were not sufficiently "related to" prices, routes, or services.

AB 1513 Due Diligence and Payment Procedures - Time to Comply is Running Out

By: Kyle D. Kring

Posted on November 8, 2016

As many of you know, the deadline to make the AB 1513 payments is currently December 15, 2016, unless the Fresno Superior Court issues a stay on payments made per AB 1513 within the next week or two, which appears unlikely at this time. What you may not know is that the December 15th deadline applies to both payments to employees you are able to identify and payments to the DIR/DLSE (two separate checks) for employees who you are not able to locate.

In order to accomplish your "due diligence" in locating ex-employees, you need to start the investigative process now to ensure compliance by December 15, 2016. We have recommended a two-step process of sending an initial letter to your ex-employees requesting they confirm their last known address. If the employee does not respond to this letter, we recommend that you conduct a public records search in a further attempt to locate the ex-employee and satisfy the "due diligence" requirement in AB 1513.

Paid-When-Paid Provisions and Effects on Subcontractors

By: Timothy J. Broussard

Posted on October 3, 2016

When a subcontractor is not paid on a project, it usually comes at the worst time. There is payroll and suppliers to be paid. Yet, the builder has failed to pay the subcontractor because the owner is in dispute with the builder, particularly on extra work charges. Or, perhaps the owner has run into cash flow issues that affect timing of funding. The subcontractor should conduct careful investigation to identify and verify these problems with the builder and, if available, the owner's representatives. Sometimes, there are other reasons why there is no funding to the builder.

Ninth Circuit Decides Against Class Action Waivers

By: Kyle D. Kring and Tyler Kring

Posted on September 1, 2016

On August 22, 2016, the Ninth Circuit joined the Seventh Circuit and the National Labor Relations Board (NLRB) with their ruling in Morris v. Ernst & Young LLP regarding class action waivers. The court found that arbitration agreements containing class action waivers violated employees' rights to bring class and collective actions against an employer.

Who Decides Whether the Agreement Permits or Prohibits Classwide Arbitration, a Court or the Arbitrator?

By: Kyle D. Kring and Tyler Kring

Posted on August 10, 2016

Just last week a small majority of the California Supreme Court in Sandquist v. Lebo Automotive, Inc. affirmed the Court of Appeal, holding that as a matter of state contract law, the question of whether the parties to an arbitration agreement agreed to class arbitration is an issue for an arbitrator, rather than court, to decide.

AB 1513 Update- Court Denies Preliminary Injunction

By: Kyle D. Kring

Please be advised that court denied the Nisei Farmers League's Preliminary Injunction. View a copy of the court's order here. In light of this ruling, the deadline to register with the DIR for the "safe harbor" provision under California Labor Code section 226.2(b)(3) is July 28, 2016.

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. 

AB 1513 UPDATE - Temporary Injunction Granted to Prevent California from Enforcing the July 1, 2016 Deadline to Sign Up for "Safe Harbor Defense"

By: Kyle D. Kring

Posted on July 1, 2016

This is to update you on the Nisei Farmers League's constitutional challenge to the AB 1513 affirmative defense, and specifically, the deadline to notify DIR of your company's intention to participate in the affirmative defense.

Nisei Farmers League Files Complaint to Declare AB 1513 Unconstitutional

By: Kyle D. Kring

Posted on June 30, 2016

On June 27, 2016, Nisei Farmers League filed a lawsuit against the California Labor and Workforce Development Agency, David Lanier; Department of Industrial Relations, Christine Baker; and the Division of Labor Standards Enforcement, Julie Su alleging that AB 1513 and Labor Code section 226 is unconstitutionally vague and ambiguous. Additionally, the Plaintiff filed an Exparte Application for a preliminary injunction to stay enforcement of AB 1513/Labor Code section 226. The hearing on the Exparte motion is set for this afternoon, June 30, 2016. (See Attached Complaint and related court filings.)

New Los Angeles and San Diego Minimum Wage and Sick Leave Ordinances

By: Kyle D. Kring and Tyler D. Kring

Recently passed ordinances in the cities of San Diego and Los Angeles will soon become effective, leaving employees with higher minimum wages and an increase in paid sick leave time. Both cities are adopting similar, but slightly different, systems that force minimum wages to gradually rise over the next five years and paid sick leave hours increase. This article discusses both cities ordinances and the impact they will have on the employer and employee. It is important to note that despite the new local ordinances, cities must abide by existing state and federal law as well. Where there are differences between the authorities, the employer must follow the law that is most generous and beneficial to the employee.

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