Jackpot Harvesting Co. v. Superior Ct. ( 2018 )

Filed 8/14/18
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SIXTH APPELLATE DISTRICT
JACKPOT HARVESTING COMPANY, No. H044764
INC., (Monterey County
Super. Ct. No. 15CV000491
Petitioner,
v.
THE SUPERIOR COURT OF
MONTEREY COUNTY,
Respondent;
JOSE ROBERTO LAINEZ et al.,
Real Parties in Interest.
Labor Code section 226.2,1 which became effective January 1, 2016, addresses the
manner in which piece-rate employees are to be compensated for rest and recovery
periods and other nonproductive time on the job (collectively, rest/NP time).
Subdivision (b) of the statute (hereafter section 226.2(b)) provides a safe harbor for an
employer that, prior to 2016, failed to properly compensate its piece-rate workers for
rest/NP time.2 Under section 226.2(b), an employer that pays its employees for
1
All statutory references are to the Labor Code unless otherwise specified.
2
In this case, we refer to section 226.2(b) as a “safe harbor” provision insofar as it
affords an employer an affirmative defense to certain claims by piece-rate workers for
unpaid rest/NP time when the employer complies with a number of specified conditions.
In so doing, we acknowledge that a “safe harbor” statutory provision takes a number of
different forms and therefore has various meanings. (See, e.g., Optimal Markets, Inc. v.
Salant (2013) 221 Cal.App.4th 912, 920 [Code Civ. Proc., 128.7 provides party a 30-day
previously unpaid rest/NP time accrued between July 1, 2012 and December 31, 2015, is
entitled to assert “an affirmative defense to any claim or cause of action . . . based solely
on the employer’s failure to timely pay the employee the compensation due for [rest/NP
time] . . . for time periods prior to and including December 31, 2015.”
This lawsuit concerns whether an employer complying with the requirements of
section 226.2(b) has a safe harbor against any employee claims for rest/NP time accruing
prior to and including December 31, 2015, or has an affirmative defense only to those
claims accruing between July 1, 2012 and December 31, 2015. We will conclude that
under the plain and unambiguous language of section 226.2(b), an employer complying
with the statute has an affirmative defense against any employee claims for rest/NP time
accruing prior to and including December 31, 2015.
I. INTRODUCTION
Employers in California—and, specifically, agricultural employers—are required
to “authorize and permit all employees to take rest periods.” (Cal. Code Regs. tit. 8,
§ 11140, subd. 12.) Agricultural employees working outdoors in temperatures exceeding
95 degrees Fahrenheit are entitled to a specified recovery period. (Cal. Code Regs. tit. 8,
§ 3395, subd. (e)(6) [minimum 10-minute recovery period every two hours].) Under
California law, mandated rest and recovery periods “shall be counted as hours worked,
for which there shall be no deduction from wages.” (§ 226.7, subd. (d); see id., subd. (c)
[providing for penalties for an employer’s failure to provide mandated rest or recovery
periods].) Further, where an employee’s work hours are separately classified by the
employer as productive (directly compensated) or nonproductive (not compensated), an
employer must still pay the employee for all hours worked; an employer may not simply
safe harbor to avoid sanctions by withdrawing improper pleading]; Bourgi v. West
Covina Motors, Inc. (2008) 166 Cal.App.4th 1649, 1660 [safe harbor provisions under
Veh. Code, §§ 9990, 9991, for benefit of automobile dealers concerning minor repair
damage to vehicles].)
2
divide the total hours worked into the amount the employee was paid for productive time
to arrive at an average hourly wage. (Armenta v. Osmose, Inc. (2005) 135
Cal.App.4th 314, 324 (Armenta).)
Appellate courts in two 2013 decisions—Gonzalez v. Downtown LA Motors, LP
(2013) 215 Cal.App.4th 36 (Gonzalez) and Bluford v. Safeway Stores, Inc. (2013) 216
Cal.App.4th 864 (Bluford)—clarified that the principles that nonproductive time and
rest/recovery time are separately compensable apply to workers who are paid on a piece-
rate basis, i.e., workers compensated based upon the type and number of tasks performed
rather than the number of hours worked. The California Legislature thereafter, through
Assembly Bill 1513 (AB 1513), enacted section 226.2, which codified the
Gonzalez/Bluford decisions and provided a mechanism for compensating piece-rate
workers for previously unpaid accrued rest/NP time. (Stats. 2015, ch. 754, § 4, p. 5609.)
Real party in interest Jose Roberto Lainez (Lainez) filed suit on May 14, 2015,
against his former employer, petitioner Jackpot Harvesting Company, Inc. (Jackpot), a
company that performs harvesting and farming activities in Monterey County and
Ventura County. Lainez alleged that he had worked for Jackpot as an agricultural worker
and was compensated on a piece-rate basis. He alleged six causes of action for himself
and on behalf of all members similarly situated. Only the first cause of action—asserting
claims for unpaid minimum wages for rest/NP time, as well as interest, liquidated
damages, and statutory penalties—is at issue here.
On January 1, 2016, approximately six months after Lainez filed the class action
complaint, section 226.2 went into effect. Under section 226.2(b), an employer
complying with the statute’s requirements, including payment (by December 15, 2016) of
all amounts due to employees for uncompensated rest/NP time for the period of July 1,
2012 to December 31, 2015, may assert an affirmative defense to an employee’s “claim
or cause of action” arising out of such uncompensated rest/NP time “for time periods
prior to and including December 31, 2015.” (§ 226.2(b).)
3
In March 2016, Jackpot filed a first amended answer to the Lainez complaint,
alleging its compliance with section 226.2(b) as a 37th affirmative defense. Jackpot later
moved for summary adjudication, contending that because it had complied with all of the
safe harbor requirements by making back payments to Lainez and other Jackpot
employees—a total of 1,138 current and former employees—the 37th affirmative defense
was an absolute bar to the first cause of action of the complaint. Lainez opposed the
motion, but he admitted that Jackpot had complied fully with section 226.2(b).
The superior court denied the motion, concluding that the language of the statute
was unclear and that, while section 226.2(b) provided a safe harbor to employers against
claims by piece-rate workers for unpaid rest/NP time accruing between July 1, 2012 and
December 31, 2015, it did not provide a defense for such claims accruing prior to
July 1, 2012.
Jackpot challenges that order by this petition for writ of mandate. Jackpot
contends that under the plain language of the statute, if an employer complies with the
requirements of section 226.2(b), it has a safe harbor defense to all employee claims for
unpaid rest/NP time accruing on or prior to December 31, 2015. Jackpot argues
alternatively that even if the language of section 226.2(b) is unclear, applying all rules of
statutory interpretation, including consideration of legislative history, the intent of the
Legislature was to provide employers that complied with section 226.2(b) a complete
defense to all such claims for unpaid rest/NP time accruing on or prior to
December 31, 2015. Jackpot urges that writ relief is appropriate to address the claimed
error because, inter alia, the trial court’s ruling “has far-reaching consequences for
similarly situated California employers” that, like Jackpot, elected under the safe harbor
4
provision to make back payments to their piece-rate employees. Jackpot claims that over
2,300 private companies made such an election.3
The parties have cited no published cases interpreting the safe harbor provisions of
section 226.2(b). After our careful reading of the statute and our application of
established rules of statutory interpretation, we conclude that the unambiguous language
of section 226.2(b) provides the employer a safe harbor for all employee claims for
unpaid rest/NP time accruing on or prior to December 31, 2015, where the employer has
complied with all the requirements of the statute, including timely paying employees for
such claims that had accrued between July 1, 2012 and December 31, 2015. We
conclude that the court erred in denying Jackpot’s motion for summary adjudication. We
will therefore grant the petition for writ of mandate and will direct respondent superior
court to enter an order granting Jackpot’s motion for summary adjudication of the first
cause of action of the complaint.
II. FACTUAL AND PROCEDURAL BACKGROUND
A. Pleadings
Lainez filed his class action complaint on May 14, 2015, alleging six causes of
action. In the first cause of action of his complaint, Lainez alleged that he, along with
members of his purported class, were piece-rate agricultural workers employed by
Jackpot. (See Cal. Code Regs, tit. 8, § 11140, subd. 2(L) [defining piece-rate
compensation for agricultural workers as “a method of payment based on units of
3
In support of this assertion, Jackpot cited a Department of Industrial Relations
website. (See (as of Aug. 14, 2018).) We take judicial notice of this website (see
Evid. Code, §§ 452, 459; Moehring v. Thomas (2005) 126 Cal.App.4th 1515, 1523 & fn.
4 [judicial notice taken of United States Census Bureau’s website containing 2000 U.S.
Decennial Census]), in which the Department of Industrial Relations listed a total of more
than 2,100 employers that had filed elections to make back payments to piece-rate
employees under the safe harbor provision of section 226.2(b).
5
production or a fraction thereof”].) Their jobs required them to (1) perform a minimum
of 10 minutes of mandatory exercise in the morning, (2) attend meetings of
approximately 15 minutes in duration, (3) make trips between fields two to three times
per month with an average duration of 30 minutes, and (4) take 15-minute rest breaks.
Jackpot’s workers were compensated only on a piece-rate basis, and they were not
separately paid for this nonproductive time and rest time at a rate equal to or greater than
minimum wage. Citing various provisions of the Labor Code,4 Lainez asserted on behalf
of himself and similarly situated Jackpot workers a claim for damages, liquidated
damages, interest, and fees.
The remaining five causes of action of the complaint are not at issue in this
petition for writ of mandamus challenging the trial court’s denial of Jackpot’s summary
adjudication motion.
Jackpot filed its answer on July 13, 2015. Jackpot thereafter filed a first amended
answer to the complaint, alleging as a 37th affirmative defense that it intended to avail
itself of certain provisions of section 226.2, subdivisions (b) and (d).
B. Motion for Summary Adjudication
On February 3, 2017, Jackpot filed a motion for summary adjudication asserting
that the first cause of action of the complaint was without merit and the 37th affirmative
defense of the amended answer to the complaint had been established. Jackpot presented
evidence of 12 claimed undisputed material facts relating to its assertion that it had
complied fully with the safe harbor provisions of section 226.2(b).
4
Lainez cited the following Labor Code sections in support of his first cause of
action: sections 558 (liability for civil penalties for violating wage and hour laws); 1194
(recovery of minimum wages plus interest, reasonable attorney fees, and costs); 1194.2
(liquidated damages based upon failure to pay minimum wages); 1197 (unlawful to pay
less than minimum wage); and 1198 (unlawful to require employee to work a greater
number of hours than maximum hours fixed by law). Lainez also cited “Wage Orders 13
and/or 14” in support of the first cause of action.
6
The 12 undisputed material facts stated in the motion were that (1) Jackpot had
employed Lainez until his termination in or about December 2015 on its celery
harvesting crew, and he was compensated on a piece-rate basis; (2) Jackpot had filed on
June 23, 2016, the requisite notice with the Department of Industrial Relations (DIR) that
Jackpot elected to make back payments to its piece-rate employees under
section 226.2(b)(3) and subdivision (c); (3) Jackpot had elected to use the formula
identified in section 226.2(b)(1)(B) (i.e., “4% of gross earnings”) for calculating and
making back payments to current and former employees for previously uncompensated
rest/NP time from July 1, 2012 to December 31, 2015; (4) Jackpot had engaged Charles
Doglione, a certified public accountant and business consultant, to obtain payroll data
necessary to make the calculations for back payments to current and former employees;
(5) Jackpot had retained Simpluris, a national class action settlement administrator, to
locate and provide payments to all current and former affected workers; (6) Jackpot had
determined that there were 1,138 current and former employees who had been paid by
Jackpot on a piece-rate basis between July 1, 2012 and December 31, 2015; (7) Doglione
had provided to Simpluris the employee information and calculations for each affected
employee to be compensated, and he wired Simpluris the funds necessary to make the
payments and required payroll and other taxes; (8) Simpluris had located and confirmed
the mailing address for each affected employee; (9) Simpluris had sent on
November 18, 2016, checks for uncompensated or undercompensated rest/NP time
accrued for the period of July 1, 2012 to December 31, 2015, to all workers who had been
located, as well as explanatory statements and spreadsheets to those workers;
(10) Simpluris had sent by overnight delivery on December 14, 2016, a statement to the
DIR concerning amounts calculated as due to affected workers who could not be located,
along with a single check for the total amount due to this group of affected workers, a
second check for the administrative fee due under section 226.2, subdivision (d)(1), and a
statement detailing for each affected employee his or her name, last known address,
7
social security number, and amount payable; (11) Jackpot had preserved the records
showing hours worked, calculation of hours worked, and payments made to employees
and the Labor Commissioner; and (12) Jackpot stated that if any affected employee who
did not receive his or her check inquired of Jackpot, it would advise the employee to
contact Simpluris, who would then direct the person to the DIR. Jackpot argued therefore
that, under section 226.2(b), it had established as a matter of law a complete defense to
the first cause of action.
Lainez opposed the motion. He declared that he had begun working for Jackpot
prior to May 14, 2011, and that he was seeking compensation in the first cause of action
for unpaid minimum wages prior to July 1, 2012. Lainez in his opposition agreed that
each of the material facts identified in Jackpot’s summary adjudication motion was
undisputed. But Lainez argued that the safe harbor provision of section 226.2(b) did not
offer a complete defense to Jackpot because the statute did not immunize the company
against unpaid minimum wage claims accruing prior to July 1, 2012.
After hearing argument, the court denied the motion for summary adjudication. In
its formal order filed May 17, 2017, the court reasoned “that the express language in
Labor Code Section 226.2 is not clear and . . . while the [L]egislature intended the ‘safe
harbor’ defense to eliminate an employer’s liability for penalties and other consequential
damages arising from the failure to compensate piece rate workers for rest periods and
other non-productive time during the ‘safe harbor’ period of July 1, 2012 to December
31. 2015, the [L]egislature did not intend to deprive piece[-]rate workers of their rights to
receive compensation for rest periods and other non-productive time for time periods
prior to July 1, 2012.”
Jackpot filed a petition for writ of mandate and a request for temporary stay with
this court. We granted a temporary stay of all trial court proceedings to permit further
consideration of the issues raised in the petition. In the same order, we directed
respondent superior court to show cause why a peremptory writ of mandate should not
8
issue as requested in the petition. Real party in interest Lainez filed an answer and
opposition to the petition, and Jackpot filed a formal reply.
III. DISCUSSION
A. Parties’ Contentions
Jackpot argues there was no dispute below that it had complied with all
requirements of section 226.2(b) to assert the safe harbor defense. It contends the
language of the statute clearly provides that if, on or before December 15, 2016, the
employer pays its piece-rate employees prior amounts due for unpaid rest/NP time for
July 1, 2012 through December 31, 2015, and otherwise complies with the statute, it will
have a defense for “any claim or cause of action . . . for time periods prior to and
including December 31, 2015.” (§ 226.2(b).) Jackpot argues that since the Legislature
chose not to provide a specific date earlier than December 31, 2015, to limit the scope of
the defense, the court erred in construing section 226.2(b) as providing a safe harbor only
for claims accruing between July 1, 2012 and December 31, 2015.
Jackpot asserts further that the legislative history demonstrates that
section 226.2(b) was intended to provide the employer a defense for all claims accruing
on or prior to December 31, 2015. Jackpot cites both material it presented below in its
reply to Lainez’s opposition to the motion and evidence it discovered after the court’s
ruling that it presented below in a motion for reconsideration of the denial of summary
adjudication.
Lainez responds that the language of the statute is ambiguous and that the phrase
“for time periods prior to and including December 31, 2015” (§ 226.2(b)) is reasonably
susceptible of multiple interpretations, including the one adopted by the court below. He
contends the construction advanced by Jackpot that “would allow an employer to negate
any liability for minimum wages earned by piece[-]rate workers prior to July 1, 2012”
would constitute “[d]ivesting piece[-]rate workers of earned wages [which] is an absurd
result that must be avoided.” And Lainez asserts that interpreting section 226.2(b) as
9
urged by Jackpot would mean the divestiture of workers’ vested property rights (i.e.,
earned wages) in violation of the takings clause of the Fifth Amendment of the United
States Constitution.
Before addressing the merits of Jackpot’s position, we will (1) describe familiar
rules of statutory interpretation, (2) identify our standard of review, (3) provide some
background concerning the enactment of AB 1513, and (4) discuss the relevant
provisions of section 226.2.
B. Rules of Statutory Interpretation
Our interpretation of section 226.2 “is an issue of law, which we review de novo.
[Citation.]” (United Riggers & Erectors, Inc. v. Coast Iron & Steel Co. (2018) 4 Cal.5th
1082, 1089 (United Riggers & Erectors).)
Our essential task in interpreting a statute “ ‘is to determine the Legislature’s
intent so as to effectuate the law’s purpose. We first examine the statutory language,
giving it a plain and commonsense meaning. We do not examine that language in
isolation, but in the context of the statutory framework as a whole in order to determine
its scope and purpose and to harmonize the various parts of the enactment. If the
language is clear, courts must generally follow its plain meaning unless a literal
interpretation would result in absurd consequences the Legislature did not intend. If the
statutory language permits more than one reasonable interpretation, courts may consider
other aids, such as the statute’s purpose, legislative history, and public policy.’
[Citation.] ‘Furthermore, we consider portions of a statute in the context of the entire
statute and the statutory scheme of which it is a part, giving significance to every word,
phrase, sentence, and part of an act in pursuance of the legislative purpose.’ [Citation.]”
(Sierra Club v. Superior Court (2013) 57 Cal.4th 157, 165-166.)
California courts follow an approach to determine legislative intent that involves
up to three steps. (Alejo v. Torlakson (2013) 212 Cal.App.4th 768, 786-787.) The first
step is our “examin[ation] of the actual language of the statute. [Citations.]” (Halbert’s
10
Lumber, Inc. v. Lucky Stores, Inc. (1992) 6 Cal.App.4th 1233, 1238 (Halbert’s Lumber).)
We do so “ ‘because the statutory language is generally the most reliable indicator of
legislative intent.’ [Citation.]” (Klein v. United States of America (2010) 50 Cal.4th 68,
77.) In this first step, we scrutinize “words themselves, giving them their ‘usual and
ordinary meanings’ and construing them in context. [Citation.]” (People v. Lawrence
(2000) 24 Cal.4th 219, 230.) And we “will apply common sense to the language at hand
and interpret the statute to make it workable and reasonable. [Citation.]” (Wasatch
Property Management v. Degrate (2005) 35 Cal.4th 1111, 1122 (Wasatch Property
Management).) In doing so, if we find the statutory language to be “clear, its plain
meaning should be followed. [Citation.]” (Great Lakes Properties, Inc. v. City of El
Segundo (1977) 19 Cal.3d 152, 155.) Thus, if there is no ambiguity, “we presume the
Legislature meant what it said, and the plain meaning of the language governs.
[Citations.]’ ” (People v. Montes (2003) 31 Cal.4th 350, 356.)
If we determine the statutory language is unclear, we will proceed to the second
step and review the legislative history. (In re York (1995) 9 Cal.4th 1133, 1142;
Halbert’s Lumber, supra, 6 Cal.App.4th at p. 1239.) In doing so, we “examine the
legislative history and statutory context of the act under scrutiny.” (Sand v. Superior
Court (1983) 34 Cal.3d 567, 570.) Under these circumstances, we “select the
construction that comports most closely with the apparent intent of the Legislature, with a
view to promoting rather than defeating the general purpose of the statute, and avoid an
interpretation that would lead to absurd consequences.” (People v. Jenkins (1995) 10
Cal.4th 234, 246.)
In the event the proper interpretation of the statute is not evident after examining
the legislative history, “we must cautiously take the third and final step in the interpretive
process. [Citation.] . . . Where an uncertainty exists, we must consider the consequences
that will flow from a particular interpretation. [Citation.] Thus, ‘[i]n determining what
the Legislature intended we are bound to consider not only the words used, but also other
11
matters, “such as context, the object in view, the evils to be remedied, the history of the
times and of legislation upon the same subject, public policy and contemporaneous
construction.” [Citation.]’ [Citations.]” (MacIsaac v. Waste Management Collection &
Recycling, Inc. (2005) 134 Cal.App.4th 1076, 1084.)
An overarching principle for our interpretation of statutes is that courts have a
“limited role in the process of interpreting enactments from the political branches of our
state government. In interpreting statutes, we follow the Legislature’s intent, as exhibited
by the plain meaning of the actual words of the law, ‘ “ ‘whatever may be thought of the
wisdom, expediency, or policy of the act.’ ” ’ [Citations.] ‘ . . . [T]he judicial role in a
democratic society is fundamentally to interpret laws, not to write them. . . .’ [Citation.]
It cannot be too often repeated that due respect for the political branches of our
government requires us to interpret the laws in accordance with the expressed intention of
the Legislature. ‘This court has no power to rewrite the statute so as to make it conform
to a presumed intention which is not expressed.’ [Citations.]” (California Teachers
Assn. v. Governing Bd. of Rialto Unified School Dist. (1997) 14 Cal.4th 627, 632-633
(California Teachers Assn.).)
C. Standard of Review
Our interpretation of the language of section 226.2 “is an issue of law, which we
review de novo. [Citation.]” (United Riggers & Erectors, supra, 4 Cal.5th at p. 1089.)
Likewise, where, as is the case here, the relevant facts are undisputed, we review de novo
the application of the law to those facts. (International Engine Parts, Inc. v. Feddersen
& Co. (1995) 9 Cal.4th 606, 611; see also Harustak v. Wilkins (2000) 84 Cal.App.4th
208, 213 [appellate court “particularly well suited” to decide as question of law the
meaning of statutory phrase].) Further, a determination regarding a statute’s
constitutionality is a question of law that we review de novo. (Zubarau v. City of
Palmdale (2011) 192 Cal.App.4th 289, 307.)
12
The same standard of review applies to our review of the trial court’s order
denying summary adjudication. A party may move for summary adjudication as to one
or more causes of action if it contends that there is no triable issue of fact or there is an
absolute defense to the cause of action. (Code Civ. Proc., § 437c, subd. (f)(1).)5 An
appellate court scrutinizes the denial of summary adjudication by independent review.
(Certain Underwriters at Lloyd’s of London v. Superior Court (2001) 24 Cal.4th 945,
972.) Such a ruling “resolves a pure question of law [citation], namely, whether there is
any triable issue as to any material fact and, if not, whether the moving party is entitled to
adjudication in his [or her] favor as a matter of law [Citation.]” (Ibid.)
5
“A party may move for summary adjudication as to one or more causes of action
within an action, one or more affirmative defenses, one or more claims for damages, or
one or more issues of duty, if the party contends that the cause of action has no merit, that
there is no affirmative defense to the cause of action, that there is no merit to an
affirmative defense as to any cause of action, that there is no merit to a claim for
damages, as specified in Section 3294 of the Civil Code, or that one or more defendants
either owed or did not owe a duty to the plaintiff or plaintiffs. A motion for summary
adjudication shall be granted only if it completely disposes of a cause of action, an
affirmative defense, a claim for damages, or an issue of duty.” (Code Civ. Proc., § 437c,
subd. (f)(1).)
13
D. Background Concerning Enactment of AB 15136
There were two cases decided in 2013 by California courts of appeal that
prompted the subsequent drafting and enactment of AB 1513. In Gonzalez, supra, 215
Cal.App.4th at page 40, the Second District Court of Appeal addressed an employer’s
appeal from a judgment in favor of class action plaintiffs, automobile service technicians
compensated on a piece-rate basis. They successfully asserted they were entitled to be
paid “a separate hourly minimum wage for time spent during work shifts waiting for
vehicles to repair or performing other nonrepair tasks directed by the employer.”
(Ibid.) The employer had asserted that “it was not required to pay the technicians a
separate hourly minimum wage for such time because it ensured that a technician’s total
compensation for a pay period never fell below . . . the ‘minimum wage floor’—the total
number of hours the technician was at work during the pay period (including hours spent
waiting for repair work or performing non-repair tasks), multiplied by the applicable
minimum wage rate.” (Ibid.) The trial court concluded that the employer had violated
California’s minimum wage law, holding that “an employer [may not] avoid paying its
employees for all hours worked by averaging total compensation over total hours worked
in a given pay period.” (Ibid.) The specific wage law at issue in Gonzalez was Wage
Order No. 4-2001 (Wage Order No. 4) which “provides as follows: ‘Every employer
6
Because we conclude that the language of section 226.2(b) is clear and
unambiguous and the court erred in holding that the Legislature did not intend the safe
harbor provision to apply to rest/NP time claims accruing prior to July 1, 2012, under
settled rules of statutory construction, we need not resort to consideration of legislative
history. (See In re York, supra, 9 Cal.4th at p. 1142.) Our discussion here in which we
provide background concerning the enactment of AB 1513 is nonetheless appropriate.
“[W]e may also ‘ “examine the history and background of the statutory provision in order
to ascertain the most reasonable interpretation of the measure.” [Citation.]’ [Citation.]”
(Haniff v. Superior Court (2017) 9 Cal.App.5th 191, 202 (Haniff).) Even where, as here,
“the plain language of the statutes dictates the result,” legislative history may be
considered to provide additional authority to confirm the court’s statutory interpretation.
(Barratt American Inc. v. City of Rancho Cucamonga (2005) 37 Cal.4th 685, 697.)
14
shall pay to each employee, on the established payday for the period involved, not less
than the applicable minimum wage for all hours worked in the payroll period, whether
the remuneration is measured by time, piece, commission, or otherwise.’ (Cal.Code
Regs., tit. 8, § 11040, subd. (4)(B).)” (Gonzalez, supra, at p. 44.)
The Court of Appeal in Gonzalez affirmed, concluding that the plaintiffs were
entitled to separate compensation for time worked waiting for vehicles and performing
other nonrepair duties. (Gonzalez, supra, 215 Cal.App.4th at pp. 40-41.) The court
relied on Armenta, supra, 135 Cal.App.4th 314, a case that also involved interpretation of
Wage Order No. 4. (Gonzalez, supra, at p. 45.) In Armenta, the employer—a company
that maintained utility poles—had similarly compensated employees only for
“ ‘productive’ [time that] directly related to maintaining utility poles in the field” but did
not pay employees for “ ‘nonproductive’ ” time such as travel to and from job sites.
(Gonzalez, supra, at p. 46.) The Armenta court “held that use of such an averaging
method to determine an employer’s minimum wage obligation violates California law
and that ‘[t]he minimum wage standard applies to each hour worked by [the employees]
for which they were not paid.’ [Citation.]” (Gonzalez, supra, at p. 48.) The Gonzalez
court found Armenta’s reasoning persuasive. It held that “[b]y its terms, Wage Order
No. 4 does not allow any variance in its application based on the manner of
compensation.” (Gonzalez, supra, at p. 49.) The Gonzalez court thus concluded the
automobile service technicians were entitled to separate compensation for all hours
worked and that the averaging method utilized by the employer did not satisfy
California’s minimum wage requirements. (Gonzalez, supra, at pp. 48-49.) In so
holding, the Gonzalez court rejected the employer’s argument that because the plaintiffs
were piece-rate workers, Armenta was inapplicable. (Gonzalez, supra, at pp. 48-49; see
also Cardenas v. McLane FoodServices, Inc. (C.D.Cal. 2011.) 796 F.Supp.2d 1246,
1250-1252 [formula that did not separately compensate piece-rate truck driver employees
for required pre- and post-shift duties held noncompliant with the Labor Code].)
15
In Bluford, supra, 216 Cal.App.4th at page 866 (Bluford), the Third District Court
of Appeal reversed the trial court’s denial of class certification in an action by a truck
driver claiming the employer had violated the law by, inter alia, failing to compensate
him and other employees similarly situated for rest periods. The employer—similar to
the position asserted by its counterpart in Gonzalez concerning hours spent on the job for
tasks other than repair work—argued that it was not required to pay separate
compensation to its piece-rate employees for rest periods. (Bluford, supra, at p. 871.)
The appellate court disagreed. It noted that “[u]nder Industrial Welfare Commission
wage orders, employers are required to ‘authorize and permit all employees to take rest
periods’ at the rate of at least 10 minutes for every four hours worked. (Cal.Code Regs.,
tit. 8, §§ 11070, subd. 12; 11090, subd. 12.) ‘Authorized rest periods shall be counted as
hours worked for which there shall be no deduction from wages.’ (Ibid.)” (Ibid.) The
Bluford court, relying on Armenta, supra, 135 Cal.App.4th 314, held that “a piece-rate
compensation formula that does not compensate separately for rest periods does not
comply with California minimum wage law. [Citations.]” (Bluford, supra, at p. 872; cf.
Vaquero v. Stoneledge Furniture LLC (2017) 9 Cal.App.5th 98, 108-110 [sales associates
paid on commission basis entitled to separate compensation for rest periods].)
“In response to Gonzalez and Bluford, the Governor directed the [Labor and
Workforce Development] Agency to take the lead in drafting and enacting legislation to
address any penalties California employers should face as well as providing an expedited
process by which piece-rate employees would receive years of back wages. The Agency
thus assumed a key role in formulating and drafting AB 1513, and in coordinating with
the Governor’s office and members of the Legislature. In preparing legislative proposals
for AB 1513, the Agency communicated with Legislative Counsel. The Agency also
sought confidential input from key stakeholders including representatives of business and
labor.” (Labor and Workforce Development Agency v. Superior Court (2018) 19
Cal.App.5th 12, 18 (LWDA).)
16
The Legislature under AB 1513 codified the Gonzalez/Bluford decisions requiring
employers to separately compensate piece-rate workers for rest/NP time periods at or
above minimum wage. As explained by the Legislative Counsel’s Digest: “This bill
would require the itemized statement provided to employees compensated on a piece-rate
basis to also separately state the total hours of compensable rest and recovery periods, the
rate of compensation, and the gross wages paid for those periods during the pay period,
and the total hours of other nonproductive time, as specified, the rate of compensation,
and the gross wages paid for that time during the pay period. The bill would require
those employees to be compensated for rest and recovery periods and other
nonproductive time at or above specified minimum hourly rates, separately from any
piece-rate compensation.” (Legis. Counsel’s Dig., Assem. Bill No. 1513 (2015-2016
Reg. Sess.) Stats.2015, Summary Dig., p. 5609.) In addition, the new legislation “until
January 1, 2021, would provide that an employer shall have an affirmative defense to any
claim or cause of action for recovery of wages, damages, liquidated damages, statutory
penalties, or civil penalties based solely on the employer’s failure to timely pay the
employee the compensation due for rest and recovery periods and other nonproductive
time for time periods prior to and including December 31, 2015, if, by no later than
December 15, 2016, the employer complies with specified requirements, subject to
specified exceptions.” (Ibid; see also Fowler Packing Company, Inc. v. Lanier (9th Cir.
2016) 844 F.3d 809, 812 [“[t]o protect California businesses from unforeseen liability
arising from Gonzalez and Bluford, . . . AB 1513 also created a ‘safe harbor’ that
provided employers with an affirmative defense against claims alleging failure to pay
previously for nonproductive work time . . . so long as they pay, no later than
December 15, 2016, any minimum wage deficiencies occurring between July 1, 2012,
and December 31, 2015”].)
Additionally, we note the comments to the Assembly Committee on Labor and
Employment describing the background of AB 1513. The Assembly Committee noted
17
that after the Gonzalez and Bluford decisions, “many employers have expressed concern
about liability since they had not previously [separately] compensated employees paid on
a piece rate system . . . [for rest/NP time]. They and others have expressed concerns that
these decisions may generate significant litigation and administrative workload for
employers, the courts, and the Labor Commissioner, in actions to recover back wages and
penalties. This litigation will be costly and there is significant uncertainty whether
workers will recover back pay, and when that may occur. [¶] Therefore, this bill
represents compromise in an attempt to address many of these concerns. The legislation
provides a means to resolve these issues in a way that is intended to: 1) reach more
piece-rate workers and provide larger and more timely back pay recoveries than could be
expected through litigation; 2) relieve employers of related liability for statutory penalties
and damages for past violations; and 3) clarify compensation requirements going forward
in a way that protects the right of piece-rate workers to be fully compensated for rest and
recovery periods and other nonproductive time.” (Assem. Com. on Labor and
Employment, Rep. on Assem. Bill No. 1513 (2015 Reg. Sess.) Sept. 11, 2015, p. 5.)
E. Labor Code Section 226.2
Section 226.2, subdivision (a)—codifying the decisions in Gonzalez and
Bluford—mandates that piece-rate employees receive compensation for all rest/NP time
that is “separate from piece-rate compensation.” (§ 226.2, subd. (a)(1).) Such employees
are assured under an alternative formula in subdivision (a) that their compensation for
rest and recovery time will be no less than minimum wage; in some instances the
compensation may be greater than minimum wage. (§ 226.2, subd. (a)(3)(A), (B).) And
an employer must compensate its piece-rate employees for nonproductive time at no less
than the applicable minimum wage. (§ 226.2, subd. (a)(4).)
18
Under section 226.2(b), the safe harbor provision,7 “[n]otwithstanding any other
statute or regulation, the employer . . . shall have an affirmative defense to any claim or
7
Section 226.2(b) provides in its entirety: “Notwithstanding any other statute or
regulation, the employer and any other person shall have an affirmative defense to any
claim or cause of action for recovery of wages, damages, liquidated damages, statutory
penalties, or civil penalties, including liquidated damages pursuant to Section 1194.2,
statutory penalties pursuant to Section 203, premium pay pursuant to Section 226.7, and
actual damages or liquidated damages pursuant to subdivision (e) of Section 226, based
solely on the employer’s failure to timely pay the employee the compensation due for rest
and recovery periods and other nonproductive time for time periods prior to and
including December 31, 2015, if, by no later than December 15, 2016, an employer
complies with all of the following: [¶] (1) The employer makes payments to each of its
employees, except as specified in paragraph (2), for previously uncompensated or
undercompensated rest and recovery periods and other nonproductive time from
July 1, 2012, to December 31, 2015, inclusive, using one of the formulas specified in
subparagraph (A) or (B): [¶] (A) The employer determines and pays the actual sums due
together with accrued interest calculated in accordance with subdivision (c) of
Section 98.1. [¶] (B) The employer pays each employee an amount equal to 4 percent of
that employee's gross earnings in pay periods in which any work was performed on a
piece-rate basis from July 1, 2012, to December 31, 2015, inclusive, less amounts already
paid to that employee, separate from piece-rate compensation, for rest and recovery
periods and other nonproductive time during the same time, provided that the amount by
which the payment to each employee may be reduced for amounts already paid for other
nonproductive time shall not exceed 1 percent of the employee's gross earnings during
the same time. [¶] (2) Payment shall not be required for any part of the time period
specified in paragraph (1) for which either of the following apply: [¶] (A) An employee
has, prior to August 1, 2015, entered into a valid release of claims not otherwise banned
by this code or any other applicable law for compensation for rest and recovery periods
and other nonproductive time. [¶] (B) A release of claims covered by this subdivision
executed in connection with a settlement agreement filed with a court prior to October 1,
2015, and later approved by the court. [¶] (3) By no later than July 1, 2016, the employer
provides written notice to the department of the employer’s election to make payments to
its current and former employees in accordance with the requirements of this subdivision
and subdivision (c). [¶] (A) The notice must include the legal name and address of the
employer and must be mailed or delivered to the Director of Industrial Relations, Attn:
Piece-Rate Section, 226.2 Election Notice, 1515 Clay Street, 17th Floor, Oakland, CA
94612. The director may provide for an email address to receive notices electronically in
lieu of postal mail. [¶] (B) The department shall post on its Internet Web site either a list
of the employers who have provided the required notice or copies of the actual notices.
The list or notices shall remain posted until March 31, 2017. [¶] (4) The employer
19
cause of action for recovery of wages, damages, liquidated damages, statutory penalties,
or civil penalties, including liquidated damages pursuant to Section 1194.2, statutory
penalties pursuant to Section 203, premium pay pursuant to Section 226.7, and actual
damages or liquidated damages pursuant to subdivision (e) of Section 226, based solely
on the employer’s failure to timely pay the employee the compensation due for rest and
recovery periods and other nonproductive time for time periods prior to and including
December 31, 2015, if, by no later than December 15, 2016,” it complies with the
enumerated steps in section 226.2(b). Those steps include completing payment to
employees for all unpaid rest/NP time “from July 1, 2012, to December 31, 2015,
inclusive.” (§ 226.2(b)(1).) The employer may choose one of two specified formulas in
calculating the rate of compensation for such unpaid rest/NP time. (Ibid.) The statute
also mandates that the employer provide each employee with a statement that includes a
recitation that payment was made under the statute, the method of calculation used, and,
calculates and begins making payments to employees as soon as reasonably feasible after
it provides the notice referred to in paragraph (3) and completes the payments by no later
than December 15, 2016, to each employee to whom the wages are due, or to the Labor
Commissioner pursuant to Section 96.7 for any employee whom the employer cannot
locate. [¶] (5) The employer provides each employee receiving a payment with an
accompanying accurate statement that contains all of the following information:
[¶] (A) A statement that the payment has been made pursuant to this section. [¶] (B) A
statement as to whether the payment was determined based on the formula in
subparagraph (A) of paragraph (1), or on the formula in subparagraph (B) of paragraph
(1). [¶] (C) If the payment is based on the formula in subparagraph (A) of paragraph (1),
a statement, spreadsheet, listing, or similar document that states, for each pay period for
which compensation was included in the payment, the total hours of rest and recovery
periods and other nonproductive time of the employee, the rates of compensation for that
time, and the gross wages paid for that time. [¶] (D) If the payment is based on the
formula in subparagraph (B) of paragraph (1), a statement, spreadsheet, listing, or similar
document that shows, for each pay period during which the employee had earnings
during the period from July 1, 2012, through December 31, 2015, inclusive, the gross
wages of the employee and any amounts already paid to the employee, separate from
piece-rate compensation, for rest and recovery periods and other nonproductive time.
[¶] (E) The calculations that were made to determine the total payment made.”
20
by spreadsheet or similar document, a detailed calculation of the payment.
(§ 226.2(b)(5).) The employer must provide under the safe harbor provision a written
notice to the DIR on or before July 1, 2016, of the employer’s intention to make
payments to current and former employees for prior unpaid rest/NP time. (§ 226.2(b)(3).)
And there is an outside deadline for the employer to make the payments for all unpaid
rest/NP time—whether to the employee directly or to the Labor Commissioner if the
employee cannot be located—of December 15, 2016. (§ 226.2(b)(4).)
Under subdivision (c) of section 226.2, an employer may assert the defense under
the safe harbor provision notwithstanding its good faith failure to make a payment to one
or more employees as required under section 226.2(b)(1), or its good faith failure to
provide an accurate statement as required under section 226.2(b)(5), if the employer
promptly remedies the error. Subdivision (d) contains, inter alia, a requirement that the
employer use due diligence to locate and pay former employees. Subdivision (e) tolls the
statute of limitations for rest/NP time claims accruing before January 1, 2016, for periods
(1) from January 1, 2016 through July 1, 2016, as to instances in which the employer has
not provided a notice of its intention to pay prior amounts due for accrued rest/NP time,
and (2) from January 1, 2016 through December 15, 2016, as to instances in which the
employer has provided such a notice. Further, application of the safe harbor provision is
subject to six exceptions specified in subdivision (g). Lastly, there is a sunset clause for
the statute, including the safe harbor subdivision, of January 1, 2021. (§ 226.2, subd.
(k).)
F. Safe Harbor Applies to All Claims Accruing Prior to and Including
December 31, 2015
1. Section 226.2(b) Is Not Ambiguous
In resolving the question of the scope of the safe harbor defense, we begin by
“examin[ing] . . . the actual language of the statute. [Citations.]” (Halbert’s Lumber,
supra, 6 Cal.App.4th at p. 1238.) The statute provides that, if the employer complies
21
with certain requirements (including payment to current and former piece-rate
employees) on or before December 15, 2016, it may assert “an affirmative defense to
“any claim or cause of action . . . based solely on the employer’s failure to pay the
employee for [rest/NP time] for time periods prior to and including
December 31, 2015 . . .” (§ 226.2(b), italics added.) After this prefatory language,
section 226.2(b) recites in five subparts the specific tasks the employer must accomplish
by December 15, 2016, to avail itself of the safe harbor. One requirement is that the
employer pay its current and former employees prior amounts due for unpaid rest/NP
time “from July 1, 2012, to December 31, 2015,” utilizing one of two formulas presented
in the statute. (§ 226.2(b)(1).)
Real party in interest Lainez argues that the language in section 226.2(b), “time
periods prior to and including December 31, 2015,” “does not have a plain or unequi-
vocal meaning.” He contends that because the words “all” or “any” do not precede the
phrase, “time periods prior to and including December 31, 2015,” the language is
reasonably susceptible of an interpretation that only claims accruing between July 1,
2012 and December 31, 2015, are subject to the safe harbor provision. For several
reasons, we disagree, and we find that the language of section 226.2(b) is not reasonably
susceptible of the construction advanced by Lainez.
First, the relevant statutory language refers to “any claim or cause of action”
(§ 226.2(b), italics added) with a date restriction of “prior to and including
December 31, 2015.” “ ‘Any’ is a term of broad inclusion.” (Lopez v. Sony Electronics,
Inc. (2018) 5 Cal.5th 627, 635.) It “means without limit and no matter what kind.
[Citation.]” (Delaney v. Superior Court (1990) 50 Cal.3d 785, 798; see also Zabrucky v.
McAdams (2005) 129 Cal.App.4th 618, 628 [the word “ ‘any’ mean[s] ‘of whatever kind’
or ‘without restriction’ ”].) Thus, the use of “any” in the statute “unambiguously reflects
a legislative intent for that statute to have a broad application. [Citations.]” (Department
of California Highway Patrol v. Superior Court (2008) 158 Cal.App.4th 726, 736.)
22
Because the plain import of “any” is the absence of restriction or limitation (U.S. ex rel.
Barajas v. U.S. (9th Cir. 2001) 258 F.3d 1004, 1011), it is not reasonable to infer a date
limitation in the safe harbor provision other than the one specified by the Legislature, i.e.,
“prior to and including December 31, 2015.”
Second, other language in section 226.2 supports the Legislature’s clear intent, as
expressed in the first paragraph of 226.2(b), that the safe harbor applies to any unpaid
rest/NP time claims accruing on or prior to December 31, 2015. The Legislature
provided that “[c]laims for unpaid wages, damages, and penalties that accrue after
January 1, 2016” were expressly excepted from the safe harbor. (§ 226.2, subd. (g)(4).)
Thus, considering “ ‘the context of the statute as a whole and the overall statutory
scheme” (Smith v. Superior Court (2006) 39 Cal.4th 77, 83), the statutory intent of the
safe harbor provision was to provide a defense to employers for any pre-2016 claims for
unpaid rest/NP time.
Third, it would have been a simple matter for the Legislature, had it wished, to
have limited the safe harbor provision to claims for time periods from July 1, 2012
through December 31, 2015. It could have easily provided for a limitation of pre-2016
claims covered by the safe harbor to those accruing on or after July 1, 2012. Similarly,
had this been its intent, the Legislature could have specified in subdivision (g)(4) that the
safe harbor exclusion applied to “[c]laims for unpaid wages, damages, and penalties that
accrue [before July 1, 2012, or] after January 1, 2016.” (Ibid., bracketed italics added
denoting potential statutory rewrite.) “We must assume that the Legislature knew how to
create an exception if it wished to do so; nothing would have been simpler than to insert
[language creating an exception].” (City of Ontario v. Superior Court (1993) 12
Cal.App.4th 894, 902.) Moreover, as drafted, section 226.2 contains numerous (38)
references to specific dates and several (seven) designations of particular timespans. The
Legislature here has demonstrated that it knew how to identify a particular date or a
specific time interval, and it chose not to do so; it did not describe the pre-2016 safe
23
harbor period as having a date beginning on July 1, 2012. (Cf. People v. Murphy (2001)
25 Cal.4th 136, 143 [where Legislature demonstrates ability to express specific
requirement and fails to use that language in a particular statute, absence of such
language in a similar enactment shows Legislature did not intend to impose that
requirement].)
Fourth, Lainez’s construction of the safe harbor provision is contrary to the sound
policy against the judicial rewriting of legislation. As explained by our high court, “We
may not, however, insert qualifying provisions not included or rewrite the statute to
conform to an inferred intention that does not appear from its language. [Citations.]”
(Mills v. Superior Court (1986) 42 Cal.3d 951, 957, superseded by constitutional
amendment on other grounds as stated in Whitman v. Superior Court (1991) 54 Cal.3d
1063, 1076; see also California Teachers Assn., supra, 14 Cal.4th at p. 633.) This rule is
codified in Code of Civil Procedure section 1858, under which the court is prohibited
from “insert[ing] what has been omitted, or . . . omit[ting] what has been inserted” from a
statute. (See People v. Guzman (2005) 35 Cal.4th 577, 587 (Guzman).) Here, adopting
Lainez’s position would require that we rewrite the first paragraph of section 226.2(b) to
read “any claim or cause of action for recovery . . . for time periods prior to and including
December 31, 2015, [but on or after July 1, 2012,] . . . .” (Italics added to denote
potential statutory rewrite.) Further, were Lainez’s position credited, we would be
compelled to rewrite subdivision (g)(4) of section 226.2 to provide that “[c]laims for
unpaid wages, damages, and penalties that accrue after January 1, 2016 [or prior to July
1, 2012]” are expressly excepted from the safe harbor. (Italics added to denote potential
statutory rewrite.) Such judicial statutory revision is prohibited. (Guzman, supra, at p.
587; see also Haniff, supra, 9 Cal.App.5th at pp. 201-202.)
Fifth, concluding that the safe harbor of section 226.2(b) does not apply to pre-
July 1, 2012 claims would run counter to expressio unius est exclusio alterius. Under this
“ ‘familiar rule of construction, . . . where exceptions to a general rule are specified by
24
statute, other exceptions are not to be implied or presumed.’ [Citation.]” (Mutual Life
Ins. Co. v. City of Los Angeles (1990) 50 Cal.3d 402, 410.) Thus, “if exemptions are
specified in a statute, we may not imply additional exemptions unless there is a clear
legislative intent to the contrary. [Citation.]” (Sierra Club v. State Bd. of Forestry
(1994) 7 Cal.4th 1215, 1230.) Here, the Legislature expressly provided—as one of the
six specified exceptions to section 226.2(b)8—that claims arising after January 1, 2016,
would not be governed by the safe harbor provision. (See § 226.2, subd. (g)(4).) We
may not infer a further exception for claims accruing prior to July 1, 2012, absent a clear
showing that the Legislature had an intent contrary to the express language of the statute.
(See, e.g., FNB Mortg. Corp. v. Pacific General Group (1999) 76 Cal.App.4th 1116,
1131 [where 10-year statute of limitations under Code Civ. Proc., § 337.15 contained
8
Subdivision (g) of section 226.2 provides in its entirety: “The provisions in
subdivisions (b), (c), (d), (e), and (f) shall not apply to any of the following:
[¶] (1) Damages and penalties previously awarded in an order or judgment that was final
and not subject to further appeal as of January 1, 2016. [¶] (2) Claims based on the
failure to provide paid rest or recovery periods or pay for other nonproductive time for
which all of the following are true: [¶] (A) The claim was asserted in a court pleading
filed prior to March 1, 2014, or was asserted in an amendment to a claim that relates back
to a court pleading filed prior to March 1, 2014, and the amendment or permission for
amendment was filed prior to July 1, 2015. [¶] (B) The claim was asserted against a
defendant named with specificity and joined as a defendant, other than as an unnamed
(DOE) defendant pursuant to Section 474 of the Code of Civil Procedure, in the pleading
referred to in subparagraph (A), or another pleading or amendment filed in the same
action prior to January 1, 2015. [¶] (3) Claims that employees were not advised of their
right to take rest or recovery breaks, that rest and recovery breaks were not made
available, or that employees were discouraged or otherwise prevented from taking such
breaks. [¶] (4) Claims for unpaid wages, damages, and penalties that accrue after
January 1, 2016. [¶] (5) 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. [¶] (6) An employer
that is a new motor vehicle dealer, as defined by Section 426 of the Vehicle Code.”
25
several express exceptions, court would not infer unstated tolling exception based upon
promise to make repairs].)
Sixth, our duty in construing the statute is to “apply common sense to the language
at hand and interpret the statute to make it workable and reasonable. [Citation.]”
(Wasatch Property Management, supra, 35 Cal.4th at p. 1122.) Interpreting the safe
harbor of section 226.2(b) to apply to all claims or causes of action for rest/NP time
accruing on or before December 31, 2015, not only is consistent with the plain language
of the statute; it is a construction that “make[s the statute] workable and reasonable.”
(Wasatch Property Management, supra, at p. 1122.) An employer that complies with the
statute by, inter alia, timely paying all employees for unpaid rest/NP time that accrued in
the 42 months prior to the effective date of the statute, January 1, 2016, will be entitled to
assert such compliance as “an affirmative defense to any claim or cause of action [for
monetary relief]” for rest/NP time claims accruing “for time periods prior to and
including December 31, 2015.” (§ 226.2(b).) It would not make sense—and would thus
be unworkable and unreasonable—to construe the statute as setting forth a detailed
method by which the employer may avoid liability and potentially lengthy and expensive
litigation by making payments for a time period spanning up to 42 months, while
discouraging the employer from making those payments by leaving it exposed to liability
and litigation for older claims (i.e., those accruing prior to July 1, 2012). Moreover, such
a construction would be unreasonable in that it would afford the employer no safe harbor
for pre-July 2012 claims—ones that arose during a period in which the employer’s
liability to pay separate compensation for rest/NP time to piece-rate workers was not
clear—while providing the employer with a defense for previously unpaid rest/NP time
26
that accrued after the clarifying decisions of Gonzalez and Bluford were rendered in
March and May 2013, respectively.9
Seventh, we construe the statute to ascertain the intent of the Legislature “ ‘so as
to effectuate the purpose of the law.’ [Citation.]” (Moyer v. Workmen’s Comp. Appeals
Bd. (1973) 10 Cal.3d 222, 230 (Moyer).) We interpret the language of section 226.2 by
“ ‘keeping in mind the nature and obvious purpose of the statute where they appear’
[citations].” (Moyer, at p. 230.) With that in mind, the intent of the safe harbor provision
is clear: It provides a straightforward method of compensating piece-rate workers for
unreimbursed pre-2016 rest/NP time without protracted, expensive, and uncertain
litigation, while providing incentive to employers to reimburse employees voluntarily by
affording them a defense to further claims based solely upon their failure to have made
such payments. Interpreting the language of the safe harbor as providing employers with
a defense to all claims and causes of action accruing “for time periods prior to and
including December 31, 2015” (§ 226.2(b))—as clearly provided in subdivision (b)—
effectuates the purpose of the statute.
In denying the motion for summary adjudication, the trial court found that “the
[L]egislature did not intend to deprive piece[-]rate workers of their rights to receive
compensation for rest periods and other non-productive time for time periods prior to
July 1, 2012.” Lainez urges that the court’s conclusion regarding legislative intent was
9
Construing section 226.2 as providing a safe harbor only for rest/NP time claims
that accrued between July 1, 2012, and December 31, 2015, would be impractical and
unreasonable for an additional reason. Although the question of whether the specific pre-
July 2012 rest/NP time claims were stale was not addressed below, generally speaking,
actions based upon wage liabilities created by statute are governed by the three-year
statute of limitations of Code of Civil Procedure section 338, subdivision (a). (See
Cuadra v. Millan (1998) 17 Cal.4th 855, 859, disapproved on other grounds in Samuels v.
Mix (1999) 22 Cal.4th 1, 16, fn. 4.) Thus, at the time section 226.2 became effective on
January 1, 2016, unasserted statutory rest/NP time claims that had accrued prior to
January 1, 2013, might be barred by the applicable statute of limitations.
27
correct, arguing that the language at the beginning of section 226.2 “expressly prohibits
an interpretation that would divest piece[-]rate workers of their earned wages.”
The preamble of section 226.2 reads in part: “This section shall apply for
employees who are compensated on a piece-rate basis for any work performed during a
pay period. This section shall not be construed to limit or alter minimum wage or
overtime compensation requirements, or the obligation to compensate employees for all
hours worked under any other statute or local ordinance.” Lainez contends that because
the courts in Gonzalez and Bluford made it clear that employers were required to comply
with minimum wage requirements under section 1197 by compensating piece-rate
workers separately for rest/NP time, a construction of section 226.2(b) that would provide
complying employers with a safe harbor for rest/NP time claims accruing prior to July 1,
2012 “would ‘alter’ or ‘limit’ those preexisting minimum wage obligations under
[s]ection 1197.”
Although statements of the purpose or intent of legislation in a preamble “do not
confer power, determine rights, or enlarge the scope of a measure, they properly may be
utilized as an aid in construing a statute,” but are not conclusive. (People v. Canty (2004)
32 Cal.4th 1266, 1280; see also Carter v. California Dept. of Veterans Affairs (2006) 38
Cal.4th 914, 925 [preamble is an aid to interpreting statute but it is not controlling].)
“Legislative findings and statements of purpose in a statute’s preamble can be
illuminating if a statute is ambiguous. [Citation.] But a preamble is not binding in the
interpretation of the statute. Moreover, the preamble may not overturn the statute’s
language. [Citations.]” (Yeager v. Blue Cross of California (2009) 175 Cal.App.4th
1098, 1103, fn. omitted (Yeager).) This point has been reiterated in a leading treatise:
“In general, statements regarding the scope or purpose of an act that appear in the
preamble may aid in the construction of doubtful clauses, but they cannot control the
substantive provisions of the statute.” (1A Singer & Singer, Sutherland Statutes and
Statutory Construction (7th ed. 2009), § 20:3, p. 123, fn. omitted.)
28
Here, the language in section 226.2(b) that an employer complying with the
statute’s requirements “shall have an affirmative defense to any claim or cause of action
for recovery . . . for time periods prior to and including December 31, 2015” is clear and
unambiguous. Since section 226.2’s preamble does not expressly state an intention that
its safe harbor provision be limited to those rest/NP claims accruing between
July 1, 2012, and December 31, 2015, we will not construe the general language of the
preamble in a manner that contradicts the express language of subdivision (b). (Yeager,
supra, 175 Cal.App.4th at p. 1103; see also Chambers v. Miller (2006) 140 Cal.App.4th
821, 825-826 [preamble to statute “does not override its plain operative language”].)
We conclude therefore that, based upon the plain meaning of the language of
section 226.2(b), the employer safe harbor applies to any claims or causes of action for
unpaid rest/NP time that accrued prior to and including December 31, 2015. We do not
agree with the conclusion by the court below that the statute is ambiguous, and we find
that section 226.2(b) is not reasonably susceptible of the interpretation that the safe
harbor defense applies only to rest/NP time claims that accrued in the three and one-half
years before the December 31, 2015 date specified in the statute (i.e., between July 1,
2012 and December 31, 2015).
2. Lainez’s Due Process Contention
Lainez makes a constitutional argument in further support of his position that the
trial court did not err. He contends that interpreting section 226.2(b) as providing a safe
harbor for all rest/NP time claims accruing prior to and including December 31, 2015,
would result in a taking of the vested property rights of piece-rate workers in violation of
the takings clause of the Fifth Amendment of the United States Constitution.10
10
“As relevant here, the Fifth Amendment provides that no person shall ‘be
deprived of . . . property, without due process of law; nor shall private property be taken
for public use without just compensation.’ The latter provision is commonly referred to
29
Lainez did not make this argument below that the safe harbor provision as drafted
would violate the takings clause of the Fifth Amendment. As a general rule,
“constitutional issues not raised in earlier civil proceedings are waived on appeal.
[Citations.]” (Bettencourt v. City and County of San Francisco (2007) 146 Cal.App.4th
1090, 1101; see Fourth La Costa Condominium Owners Assn. v. Seith (2008) 159
Cal.App.4th 563, 585 [failure to raise at trial contention that statute was unconstitutional
because it violated procedural due process and equal protection rights resulted in its
forfeiture on appeal].) This principle applies equally to arguments not raised in summary
judgment proceedings. (Saville v. Sierra College (2005) 133 Cal.App.4th 857, 872-873
[unasserted issue in opposing motion for summary judgment forfeited; were doctrine not
applied, losing parties “could attempt to embed grounds for reversal on appeal into every
case by their silence”].) Lainez has forfeited the constitutional argument.
Lainez, as the party asserting unconstitutionality, “bears a substantial burden” of
establishing the claim. (Eastern Enterprises v. Apfel (1998) 524 U.S. 498, 523 (Eastern
Enterprises).) Even if we were to consider the merits of his federal due process
contention as a pure question of law presented by undisputed facts (Hale v. Morgan
(1978) 22 Cal.3d 388, 394), we would conclude it to be without merit.11
as the ‘takings clause.’ ” (Santa Monica Beach, Ltd. v. Superior Court (1999) 19 Cal.4th
952, 984, fn. 2 (dis. opn. of Baxter, J.).)
11
The California Constitution contains a parallel takings clause. (See Cal. Const.,
art. I, § 19.) Lainez does not assert here that the construction of section 226.2(b)
advanced by Jackpot would violate the takings clause of the California Constitution. We
therefore do not separately consider the issue. (See Kim v. Sumitomo Bank (1993) 17
Cal.App.4th 974, 979 [notwithstanding de novo standard of review of summary
judgment, appellate court’s function is not to address arguments not raised on appeal or
issues for which authorities are not cited].) Generally, however, the federal and state
takings clauses are construed congruently. (San Remo Hotel v. City and County of San
Francisco (2002) 27 Cal.4th 643, 664.)
30
The takings clause of the Fifth Amendment, made applicable to the states through
the Fourteenth Amendment (Chicago, B. & Q. R. Co. v. Chicago (1897) 166 U.S. 226,
239), has as its purpose the “prevent[ion of] the government ‘from forcing some people
alone to bear public burdens which, in all fairness and justice, should be borne by the
public as a whole.’ [Citation.]” (Eastern Enterprises, supra, 524 U.S. at p. 522.) As the
United States Supreme Court has explained: “[T]hough the classic taking is a transfer of
property to the State or to another private party by eminent domain, the Takings Clause
applies to other state actions that achieve the same thing. Thus, when the government
uses its own property in such a way that it destroys private property, it has taken that
property. [Citations.] Similarly, our doctrine of regulatory takings ‘aims to identify
regulatory actions that are functionally equivalent to the classic taking.’ [Citation.] . . .
Finally . . . , States effect a taking if they recharacterize as public property what was
previously private property. [Citation.]” (Stop the Beach Renourishment, Inc. v. Florida
Dept. of Environmental Protection (2010) 560 U.S. 702, 713.) Initially, in evaluating a
challenge under the takings clause, the court resolves whether there is, in fact, a
constitutionally protected property right implicated. (Peterson v. U.S. Dept. of Interior
(9th Cir. 1990) 899 F.2d 799, 807; see, e.g., Bowen v. Public Agencies Opposed to Social
Security Entrapment (1986) 477 U.S. 41, 55 [states’ contractual right to withdraw state
and local government employees from Social Security System “did not rise to the level of
‘property’ ” and “[could] not be viewed as conferring any sort of ‘vested right’ ”].)
Lainez’s constitutional argument is based upon the broad assertion that construing
section 226.2(b) as a safe harbor to all claims accruing on or prior to December 31, 2015,
would violate the takings clause of the Fifth Amendment because it “would result in
piece[-]rate workers being divested of their earned wages—effectively taking their
property away from them and transferring it to the employers who failed to pay them
their wages.” Lainez argues that he and other similarly situated piece-rate workers have
vested property rights to claims for unpaid rest/NP time accruing prior to July 1, 2012, of
31
which they would be unconstitutionally deprived if section 226.2(b) were interpreted as
providing a safe harbor to complying employers against all rest/NP time claims accruing
prior to and including December 31, 2015. Lainez has cited no cases holding that an
employer’s failure to separately pay minimum wages for a piece-rate employee’s rest/NP
time prior to the appellate courts in Gonzalez and Bluford making this requirement clear
created a vested right in favor of the employee to such compensation.
Jackpot responds that the takings clause of the Fifth Amendment is not implicated.
Jackpot cites a body of law rejecting constitutional challenges by employees to an
amendment to a federal labor statute. The statute was the Fair Labor Standards Act of
1937 (29 U.S.C. § 201 et seq.; the FLSA), and the amendment was the Portal-to-Portal
Act (29 U.S.C. § 251 et seq.).
In 1938, Congress enacted the FLSA, which “established a minimum wage and
overtime compensation for each hour worked in excess of 40 hours in each workweek”
for workers engaged in commerce or in the production of goods for commerce within the
meaning of the act. (Integrity Staffing Solutions, Inc. v. Busk (2014) ___ U.S.___, 135
S.Ct. 513, 516 (Integrity Staffing).) As explained by our nation’s high court, the FLSA
did not include definitions of “ ‘work’ ” or “ ‘workweek,’ ” and the Supreme Court,
“[a]pplying . . . expansive definitions [to those terms], . . . found compensable the time
spent [by employees] traveling between mine portals and underground work areas,
[citation], and the time spent walking from timeclocks to work benches, [citation].
[¶] These decisions provoked a flood of litigation . . . [namely,] more than 1,500 lawsuits
under the FLSA [citation]. These suits sought nearly $6 billion in back pay and
liquidated damages for various preshift and postshift activities. [Citation.] [¶] Congress
responded swiftly. It found that the FLSA had ‘been interpreted judicially in disregard of
long-established customs, practices, and contracts between employers and employees,
thereby creating wholly unexpected liabilities, immense in amount and retroactive in
operation, upon employers.’ [Citation.] Declaring the situation to be an ‘emergency’ ”
32
(Integrity Staffing, supra, 135 S.Ct. at p. 516), Congress passed an amendment to the
FLSA, the Portal-to-Portal Act, which created an exemption for employers for future
claims for compensation for certain activities, including “activities which are preliminary
to or postpreliminary to” the employee’s principal work activity. (29 U.S.C. § 254(a)(2).)
Employees mounted a number of constitutional challenges to the Portal-to-Portal
Act, which had effectively barred their claims for compensation for preshift and postshift
activity. They argued, inter alia, that the amendment violated the takings clause of the
Fifth Amendment. The constitutional claims were uniformly rejected. (See Moss v.
Hawaiian Dredging Co. (9th Cir. 1951) 187 F.2d 442, 445, fn. 3 (Moss) [citing 16 cases
upholding constitutionality of Portal-to-Portal Act].) In Battaglia v. General Motors
Corp. (2d Cir. 1948) 169 F.2d 254 (Battaglia), the plaintiffs contended that although “the
employees’ rights to overtime compensation ultimately flow[ed] from the [FLSA], they
[were] also in some sense ‘contractual’ in nature and hence vested.” (Id. at p. 258, fn.
omitted.) The Ninth Circuit Court of Appeals disagreed, concluding the Portal-to-Portal
Act was constitutional, and that Congress’s decision to amend the FLSA in the exercise
of its power to regulate commerce did not violate the takings clause of the Fifth
Amendment. (Battaglia, supra, at pp. 259-260, 261.)
Likewise, the court in Seese v. Bethlehem Steel Co. (4th Cir. 1948) 168 F.2d 58,
62 (Seese) addressed whether “under the Fifth Amendment[, the Portal-to-Portal Act]
takes property without due process in that it strikes down vested rights under existing
contracts.” The court of appeals rejected the constitutional challenge, holding that “even
rights arising out of contract cannot fetter [C]ongress in the exercise of a power granted it
by the Constitution, and . . . the rights stricken down by the statute are not rights arising
out of contract at all, but rights created by statute as an incident of the statutory regulation
of commerce. The Portal-to-Portal Act of May 14, 1947, like the [FLSA] which it
modified and amended, was an exercise by Congress of the power to regulate interstate
and foreign commerce; and it is well settled that the exercise of such power is not
33
invalidated even by the fact that its effect is to destroy rights under valid existing
contracts.” (Ibid.; see also Fisch v. General Motors Corp. (6th Cir. 1948) 169 F.2d 266,
270-272 [Portal-to-Portal Act did not deprive workers of vested rights in violation of due
process].)
Further, in Moss, supra, 187 F.2d 442, the court rejected a constitutional challenge
by employees to a different amendment to the FLSA. There, the plaintiffs had urged in
litigation that a section of the FLSA should be interpreted as entitling them to overtime
on overtime. (Id. at p. 443.) After trial but prior to decision in Moss, the United States
Supreme Court rendered its decision in Bay Ridge Co. v. Aaron (1948) 334 U.S. 446 (Bay
Ridge), which had the effect of validating the plaintiffs’ argument. (Moss, supra, at
p. 443.) And prior to judgment being entered in Moss, Congress passed legislation,
“popularly known as the Overtime-on-Overtime Act,” which amended the FLSA and
retroactively sustained the positions of the employer defendants that they had properly
paid overtime to the employees. (Moss, supra, at p. 444.) The plaintiffs, challenging the
constitutionality of the Overtime-on-Overtime Act amending the FLSA, argued “that
when they did the work for which additional compensation [was] sought [in the lawsuit]
they acquired rights to overtime compensation under the [FLSA], the measure of which
overtime compensation was required to be as stated in the Bay Ridge decision. These,
they say, were vested rights, contractual in nature.” (Moss, supra, at p. 444-445.) The
Ninth Circuit Court of Appeals, relying on the Portal-to-Portal Act cases discussed, ante,
upheld the constitutional validity of the Overtime-on-Overtime Act. (Moss, supra, at
p. 446-447.)
The analogy between due process challenges to amendments to the FLSA and
those directed to section 226.2 addressing compensation for rest/NP time for piece-rate
34
workers, while perhaps not perfect,12 nonetheless informs our conclusion that the safe
harbor provision is not violative of the takings clause of the Fifth Amendment. We see
no distinction between the claims for preshift and postshift compensation affected by the
Portal-to-Portal Act amending the FLSA, and the pre-July 2012 rest/NP time claims
affected here by the enactment of section 226.2. As found by the courts in such cases as
Battaglia, supra, 169 F.2d at pages 259 to 260 and Seese, supra, 168 F.2d at page 62, the
Portal-to-Portal Act, notwithstanding its impact on the employees’ preshift and postshift
compensation claims, did not constitute a violation of the takings clause of the Fifth
Amendment. The same conclusion applies here to section 226.2 and its impact upon
employees’ pre-July 2012 rest/NP time claims.
As the California Supreme Court has explained: “All presumptions and
intendments favor the validity of a statute and mere doubt does not afford sufficient
reason for a judicial declaration of invalidity. Statutes must be upheld unless their
unconstitutionality clearly, positively and unmistakably appears. [Citation.]” (Lockheed
Aircraft Corp. v. Superior Court (1946) 28 Cal.2d 481, 484).) We conclude that the safe
harbor provision, as construed to apply to all claims for unpaid rest/NP time accruing
prior to and including December 31, 2015, is not an unconstitutional taking. (See
12
For example, Congress, in enacting the Portal-to-Portal Act, made detailed
findings expressing the necessity of the legislation as a matter of national public interest,
stating that, because the FLSA had “ ‘been interpreted judicially in disregard of long-
established customs, practices, and contracts between employers and employees, thereby
creating wholly unexpected liabilities, immense in amount and retroactive in operation,
upon employers with the results that if [the FLSA] as so interpreted or claims arising
under such interpretations were permitted to stand, . . . the payment of such liabilities
would bring about financial ruin of many employers and seriously impair the capital
resources of many others . . . [and] the courts of the country would be burdened with
excessive and needless litigation.’ ” (Seese, supra, 168 F.2d at p. 60.) While Jackpot
contends that the California Legislature enacted AB 1513 “to avoid disastrous effects to
[California’s] economy due to unanticipated judicial interpretations” of minimum wage
laws as applied to piece-rate employees, there are, unlike the Portal-to-Portal Act, no
express urgency findings in the legislation that we consider here.
35
Eastern Enterprises, supra, 524 U.S. at p. 523 [party asserting unconstitutionality “bears
a substantial burden”].)
3. Conclusion
Section 226.2(b) provides an affirmative defense to “any [employee] claim or
cause of action” arising out of “previously uncompensated or undercompensated”
“[rest/NP time] for time periods prior to and including December 31, 2015,” where the
employer complies with various requirements, including reimbursing the employee for
unpaid rest/NP time “from July 1, 2012, to December 31, 2015, inclusive.”
(§ 226.2(b)(1), italics added.) The language of subdivision (b) makes clear that the
employer safe harbor applies to all pre-2016 claims, as confirmed elsewhere in the statute
noting the safe harbor to be inapplicable to claims accruing after January 1, 2016. (See
§ 226.2, subd. (g)(6).) And the specification in subdivision (g) of six exceptions to the
safe harbor, without inclusion of an exception for pre-July 1, 2012 claims, is further
evidence of this intent. The language of subdivision (b) is not reasonably susceptible of
the interpretation advanced by Lainez and adopted by the court below. Section 226.2(b)
clearly and unambiguously provides that employers complying with the statute will
receive, through the availability of an affirmative defense, a safe harbor for all claims and
causes of action arising solely from the failure to pay rest/NP time as to any such claims
accruing prior to and including December 31, 2015.
In reaching this conclusion, we are guided by the overarching principle that the
court’s “ ‘role in a democratic society is fundamentally to interpret laws, not to write
them. . . .’ [Citation.] . . . ‘This court has no power to rewrite the statute so as to make it
conform to a presumed intention which is not expressed.’ [Citations.]” (California
Teachers Assn., supra, 14 Cal.4th at pp. 632-633.) Interpreting section 226.2 as
providing an employer safe harbor for rest/NP claims accruing on or prior to December
31, 2015, but not for those claims accruing prior to July 1, 2012, would effectively
36
require us to rewrite the statute. We respectfully submit that any requests for changes to
the statutory language must be presented to the Legislature.
IV. DISPOSITION
Let a peremptory writ of mandate issue commanding respondent superior court to
vacate its order of May 17, 2017, and enter a new order granting the motion of petitioner
Jackpot Harvesting Company, Inc. (Jackpot) for summary adjudication of the first cause
of action of the complaint. Upon finality of this opinion, the temporary stay issued by
this court is vacated. Statutory costs are awarded to Jackpot.
37
___________________________________________
BAMATTRE-MANOUKIAN, J.
WE CONCUR:
__________________________
ELIA, ACTING P.J.
__________________________
MIHARA, J.
Jackpot Harvesting Co., Inc. v. Superior Court
H044764
Trial Court: Monterey County Superior Court
Court No.: 15CV000491
Trial Judge: The Honorable
Lydia M. Villarreal
Attorneys for Petitioner Patane Gumberg Avila, LLP
Jackpot Harvesting Company, Inc.: James K. Gumberg
Jennifer C. Owens
Attorneys for Real Parties in Interest Karasik Law Firm
Jose Roberto Lainez et al.: Gregory N. Karasik
Law Offices of Santos Gomez
Santos V. Gomez
Maria Esmeralda Vissuzi
Amici Curiae on Behalf of Petitioner: Grower-Shipper Association of
Central California
James Bogart
Western Growers Association
Jason Resnick
California Farm Bureau Federation
Carl Borden
Ventura County Agricultural Association
Robert Roy
Tanimura & Antle Fresh Foods, Inc.
Carmen A. Ponce
Arnold & Porter Kaye Scholer LLP
Martin R. Glick
Christopher T. Scanlan
Nunes Cooling, Inc
Brett R. Harrell
Jackpot Harvesting Co., Inc. v. Superior Court
H044764
39