Ninth Circuit Sides With Growers Against California

SAN FRANCISCO (CN) – Two Fresno-based farm companies have plausibly argued that a California workers’ compensation law denies them equal protection, because the Legislature may have targeted them in a law to court support from the United Farm Workers union, the Ninth Circuit ruled Tuesday.

Fowler Packing Company and Gerawan Farming sued California in January after the Legislature approved Assembly Bill 1513. It requires employers who pay employees piece-rate to pay for nonproductive time, such as rest and recovery periods, in addition to the piece-rate compensation.

The law includes a “safe harbor” provision, giving employers who could be sued a grace period to pay back wages. Fowler and Gerawan, however, could not benefit from this provision because of “carve-out” exceptions.

The growers claim these exceptions were deliberately included to garner support of the United Farm Workers union. A bill related to the safe harbor issue was proposed in 2014 but never formally introduced. Fowler and Gerawan say the bill that did pass was the result of “closed negotiations” that included the UFW, other unions and the lead defendant, the California Labor and Workforce Development Agency.

The bill provides safe harbor to anyone facing nonproductive wage and hour claims filed after March 1, 2014.

The UFW sued Gerawan three weeks before that cutoff date. In another exception, an April 1, 2015, cutoff date prevents Fowler from using the safe harbor defense against a March 17, 2015 claim that it used ghost workers: fictitious or nonactive workers, to deprive employees of wages.

As a result, both growers say they face class actions of a type to which other growers are not exposed. They said in their lawsuit that the exceptions violate the Constitution’s Bill of Attainder and Equal Protection clauses.

A federal judge in Sacramento disagreed, and dismissed with prejudice. U.S. District Judge Dale Drozd found the exceptions related to legitimate state interests and no evidence they were meant to punish Fowler and Gerawan.

But the Ninth Circuit did not fully agree on Tuesday, finding that the growers stated a plausible claim for their equal protection complaint. The state acknowledged at oral argument in November that the carve-outs were included to court UFW support.

“Each cut-off date corresponds, within a matter of weeks (or even a matter of days), to the corresponding filing dates of the cases against Fowler, Gerawan, and Delano [Farms Company],” Ninth Circuit Judge Ronald Gould wrote for the panel. “Accepting plaintiffs’ allegations as true, as we must at this stage of the litigation, we can conceive of no other reason why the California Legislature would choose to carve out these three employers other than to respond to the demands of a political constituent.”

Delano Farms Company is not a party to this complaint.

The state said it had legitimate reasons for choosing the cut-off dates, “to protect expectations developed as a result of already-pending litigation and to prevent unlimited relief to employers,” Gould wrote, but equal protection does not allow these exceptions to be created for the purpose of excluding certain parties.

For instance, the state claims that the cutoff date for ghost worker claims is tied to the difficulty of calculating such cases.

“But ghost worker claims are completely irrelevant to AB 1513’s safe harbor, which deals with claims of underpayment as a result of failing to pay for nonproductive work time,” Gould wrote. “It would be no less rational to base the ability of a defendant to use the safe harbor on the grounds of whether that defendant has ever received a speeding ticket.”

He dismissed the bill of attainder claim, though, because AB 1513 does not impose punishment on the growers.

The farm companies’ attorney called the ruling “a welcome vindication of the most fundamental protection of our Constitution, which is equal protection under the law.”

Attorney David Schwarz, with Irell & Manella in Los Angeles, said the Ninth Circuit “really focused on the idea that you can’t have a legislative process that singles out and discriminates against two growers at the behest of one union. That’s not an appropriate way to make legislative policy.”

The defendant state boards did not return requests for comment Tuesday.

The defendants are the directors of the California Labor and Workforce Development Agency, of the California Department of Industrial Relations, and of the California Labor Commission.

Ninth Circuit Judges Richard Clifton and Paul Watford joined Gould on the panel. They reversed and remanded the equal protection claim only.

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