Judge Blasts Growers’ Labor Law Objections

FRESNO, Calif. (CN) — Two Central Valley farming companies could not prove they were intentionally excluded from an amnesty clause in California's newest labor law over piece-rate pay, a federal judge ruled Friday.

Fresno-based Fowler Packing Co. and Gerawan Farming sued the state in January, claiming the legislature left them out of an exemption clause in Assembly Bill 1513 and punished them because of past labor disputes with the United Farm Workers.

The bill, which took effect Jan. 1, essentially rewrote the rules governing the payment of piece-rate compensation in California. It requires employers to pay workers for rest and recovery periods and other nonproductive time at or above specified minimum hourly rates, separately from any piece-rate compensation.

The law also forced businesses to pay back wages to eligible employees, such as fruit pickers and those paid by the mile driven.

Fowler Packing and Gerawan Farming take issue with the "penalty relief plan" that gives businesses a grace period to settle with and pay back wages to employees in return for protections from employment lawsuits and other penalties. The growers claim the legislature carved them out of this amnesty clause, which opened them up to class actions, while other businesses were given relief.

The farming companies argued that exceptions in the law specifically targeted them. For example, the safe harbor does not apply to any nonproductive wage and hour claim that was asserted in court before March 1, 2014 — which excludes Gerawan, because the UFW sued it about three weeks before that cutoff date.

In his 15-page opinion, U.S. District Judge Dale Drozd said the legislature had at least one reasonably conceivable basis for including the exception in the penalty relief plan — the need to balance the concern of increased litigation due to the new law with the desire not to disturb ongoing litigation.

"[I]t is certainly conceivable the legislature sought to impose a reasonable limit by allowing employers to invoke the statutory affirmative defense only in cases that had not yet been filed, or that were in the very early stages of litigation," Drozd said.

He continued, "In contrast, in cases that had been pending for a substantial amount of time prior to the statute taking effect, the legislature could have concluded the parties and the courts were more likely to have invested substantial resources and to have developed significant expectations." Drozd added that the chosen date of March 1, 2014, represents a reasonable passage of time — nearly 22 months prior to the effective date of the law.

To the extent that the farmers argue the date was selected with the intent to target them, Drozd finds that the court "is in no position to second-guess a provision that is otherwise rationally related to a legitimate state interest."

The farmers also object to the provision in the law stating that employers cannot be exempt from any claims made prior to April 1, 2015, that include allegations that the employer intentionally stole or diminished employees' wages through the use of fictitious worker names, also referred to as "ghost workers."

A class action making such claims was filed by agricultural piece-rate workers against Fowler Packing on March 17, 2015, rendering the farming company unable to claim the affirmative defenses set forth in the law.

Again, Drozd found a legitimate state interest in allowing a subset of such cases to proceed through litigation.

"Certainly, the legislature could have decided that employers facing both claims for failure to pay wages for nonproductive time and ghost worker claims should not be afforded the same affirmative defenses as those defending claims for lost wages only. Such a distinction clearly finds a rational basis and would not have been so unrelated to the legislature's broader goal of addressing the potential increase in litigation so as to bar its adoption," Drozd said.

Although the farming companies argue that the legislature should have applied such an exception to all cases involving ghost worker claims, without a time limit employees could simply add these additional allegations to their lawsuits just to deny an employer the ability to take advantage of the affirmative defense, the judge said.

"Furthermore, the decision to select April 1, 2015, as opposed to any other date, is reasonable, and the court finds it unnecessary to question the process that resulted in the legislature's adoption of this time limitation," Drozd said.

Although the exceptions cited by the farmers create certain classifications among employers based on the nature and length of preexisting litigation, this does not mean they were intended to punish, the judge said.

"[T]hese classifications do not impose judgment without trial nor do they deprive employers of liberty, property interests, or even access to the courts," Drozd added.

David Schwarz, the growers' attorney, said they plan to appeal the decision.

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