The Legislature violated two employers’ right to equal protection by carving them out of an exemption it granted all other employers from retroactive liability for certain minimum wage violations; avoiding the United Farmworkers Union’s opposition to the legislation was not a rational basis for treating the two employers differently. Responding to recent appellate decisions that greatly expanded employers’ potential minimum wage liability, the California Legislature passed AB 1513, amending Lab. Code § 226.2 to grant employers an affirmative defense to suits based on past failures to pay minimum wages for non-productive work time so long as the employers promptly make back payments of the wages required under the recent decisions. However, the bill also contained carve-outs that prevented several employers already named in lawsuits from enjoying the benefits of the new affirmative defense. The carve-outs were phrased in a manner that almost precisely identified the existing lawsuits and only those lawsuits and the defendant employers for less favorable treatment. The disfavored employers sued claiming that the carve-outs violated the Bill of Attainder Clause and the Equal Protection Clause of the US Constitution. The Ninth Circuit reverses dismissal of the Equal Protection claim finding that the alleged reason for the carve-outs—to mollify the United Farmworkers Union and gain its non-opposition to the legislation—was not a rational basis on which to discriminate against the disfavored employers and that no other plausible reason for the carve-outs had been suggested. The Ninth Circuit also held that the Bill of Attainder claim was properly dismissed since the statute does not impose punishment of the sort targeted by the Bill of Attainder Clause.
Ninth Circuit Court of Appeals (Gould, J.); December 20, 2016; 844 F.3d 809