SAN JOSE – The Court of Appeal of the State of California, 6th Appellate District ruled Aug. 14 that California Labor Code protects employers that pay piece-rate employees for “rest and recovery periods and other nonproductive time on the job” in accordance with laws passed on Jan. 1, 2016, from lawsuits related to payment claims for rest periods through Dec. 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 (nonproductive) time accruing prior to and including Dec. 31, 2015," according to the ruling.
Regarding its lawsuit filed against the Superior Court of Monterey County, Jackpot Harvesting Co. Inc. asked the appeals court to decide whether the state statute meant that an employer “has a safe harbor against any employee claims for rest/NP time accruing prior to and including Dec. 31, 2015, or has an affirmative defense only to those claims accruing between July 1, 2012 and Dec. 31, 2015,” the appeals court opinion said.
The ruling said former Jackpot Harvesting employee Jose Roberto Lainez sued the company in a class-action lawsuit filed on May 14, 2015, claiming that he and other workers did not receive proper payment for rest/NP time when he did agricultural work for Jackpot.
On Jan. 1, 2016, the labor law went into effect, stating that “an employer complying with the statute’s requirements, including payment (by Dec. 15, 2016) of all amounts due to employees for uncompensated rest/NP time for the period of July 1, 2012, to Dec. 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 Dec. 31, 2015,’” the appeals court ruling said.
Jackpot claimed in a March 2016 response to Lainez’s lawsuit that it had met the conditions that protected it from the lawsuit.
“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,” the appeals court opinion said.
Lainez later admitted that the company had made the back payments required to grant it “safe harbor” against the suit.
However, the Superior Court ruled that “the language of the statute was unclear,” in regards to whether companies were absolved of all claims filed any time before Dec. 31, 2015 or just for the specified period.
The appeals court disagreed, and instructed the Superior Court to vacate its ruling denying the judgment requested by Jackpot.