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Cucumber Harvesters Are Employees, Not Independent Contractors: Sixth Circuit
Practical Law Legal Update 8-616-7966 (Approx. 6 pages)
Cucumber Harvesters Are Employees, Not Independent Contractors: Sixth Circuit
by Practical Law Labor & Employment
| Published on 30 Jun 2015 • USA (National/Federal) |
In Perez v. D. Howes, LLC, the US Court of Appeals for the Sixth Circuit held that a company's seasonal cucumber harvesters were employees, not independent contractors, and therefore were due unpaid wages and other damages under the Fair Labor Standards Act (FLSA). The court's short opinion relied on a more detailed district court opinion that granted summary judgment to the US Department of Labor (DOL), applied a six-factor test to conclude that the workers were employees, and distinguished a prior Sixth Circuit case that concluded the same type of workers were independent contractors.
On June 22, 2015, in Perez v. D. Howes, LLC, the US Court of Appeals for the Sixth Circuit held that a company's seasonal cucumber harvesters were employees, not independent contractors, and therefore were due unpaid wages and other damages under the FLSA. The court's short opinion relied on a more detailed district court opinion that granted summary judgment to the US DOL, applied a six-factor test to conclude that the workers were employees, and distinguished from a prior Sixth Circuit case that had concluded the same type of workers were independent contractors. (No. 14-cv-2026, (6th Cir. June 22, 2015).)
Background
D. Howes LLC, a pickling cucumber farm owned by Daryl Howes, employed several dozen migrant workers to harvest cucumbers during the 2011 harvest. The workers were treated as independent contractors (each was made to sign independent contractor agreements) and were paid a portion of the proceeds from sale of the cucumber crop. Howes tracked the workers' hours on a weekly basis by simply asking each of them how many hours they had worked and recording the number they provided. Howes permitted the workers to rent housing at Green Camp, a nearby property owned by his relative. Prior to having the workers move in to Green Camp, Howes had one of his employees make various repairs. Howes put the employee in charge of handling any issues or problems that the workers reported about Green Camp.
During the summer of 2011, the US DOL's Wage and Hour Division conducted an investigation of Howes' operation, inspecting the workers' housing and finding numerous problems. The investigators also interviewed the workers. Howes actively interfered with the interviews, asking the investigators to leave the property, driving very close to where interviews were taking place and having someone take pictures of the interviews being conducted.
Following its investigation, the DOL sued Howes in US district court, alleging that Howes violated the minimum wage and recordkeeping provisions of the FLSA (29 U.S.C. § 201 et seq). The DOL also alleged that Howes violated the housing provisions of the Migrant and Seasonal Agricultural Worker Protection Act (MSPA) which requires that a person owning or controlling a facility used for housing migrant agricultural workers ensure that the facility complies with applicable health and safety standards (29 U.S.C. § 1823(a)).
The district court:
- Rejected Howes' arguments that:
- the workers were independent contractors; and
- he did not violate the MSPA's housing requirements because he did not control the property.
- Granted the DOL's motion for summary judgment.
Howes appealed the district court's decision.
Outcome
The Sixth Circuit affirmed the district court's conclusions that:
- The cucumber workers were employees, not independent contractors, under the six-factor economic realities test because:
- most of the workers worked exclusively at Howes' cucumber farm during the harvest season;
- the work of pickle harvesting did not require special skills and, in contrast with Brandel, Howes' workers had no responsibility to manage the fields (Donovan v. Brandel, 736 F.2d 1114 (6th Cir. 1984));
- the workers generally did not provide their own tools or equipment or make any investment in the operation;
- the workers did not have any opportunity to profit (or sustain losses) from the operation, in contrast with the workers in Brandel;
- Howes exercised enough control over the workers to reflect an employment relationship; and
- the services performed by the workers were an integral part of Howes' business.
- Howes violated the FLSA's recordkeeping requirements by not documenting each employee's daily and weekly work hours (29 U.S.C. § 211(c); 29 C.F.R. § 516.2), and an injunction requiring compliance with those requirements was warranted.
- Howes violated the MSPA because:
- he provided substandard housing that did not satisfy the MSPA's health and safety requirements;
- the term "control" in the MSPA is given the broadest possible meaning and includes the authority to "oversee, manage, superintend, or administer" a facility through an authorized agent; and
- he controlled Green Camp by authorizing an employee to prepare the facility and to address problems or issues the workers reported.
- Howes interfered with the DOL's investigation by:
- asking the investigators to leave the property;
- driving in close proximity to where interviews were taking place; and
- having his friend take pictures of the interviews being conducted.
Practical Implications
Based on Howes, agricultural companies in the Sixth Circuit should be aware that seasonal workers are likely to be treated as employees, not as independent contractors. Employers should not rely on the prior Sixth Circuit decision in Brandel, as that case involved unique facts. Courts apply the independent contractor test on a case-by-case basis and district courts in the Sixth Circuit have tended to find seasonal harvesters to be employees. Employers should:
- Consider the six-factor economic realities test when deciding whether to treat seasonal agricultural workers as employees or independent contractors.
- Understand their obligations under the MSPA, including the health and safety standards for employer-provided housing for seasonal workers. Employers are responsible for any housing facilities they "oversee, manage, superintend or administer."
- Satisfy their recordkeeping obligations under the FLSA.
- Avoid interfering with DOL investigations, including activities that might intimidate employees contacted or interviewed by the DOL.