Jimenez v. Servicios Agricolas Mex, Inc.

Citations: 742 F. Supp. 2d 1078; 2010 WL 3809834Docket: CV-07-01492-PHX-GMS, CV-07-02581-PHX-GMS

Court: District Court, D. Arizona; September 20, 2010; Federal District Court

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Two motions for summary judgment were addressed in a case involving multiple Plaintiffs, U.S. citizens or legal permanent residents, who worked for various Defendants associated with lemon harvesting in Arizona and California during the 2004-05 and 2005-06 growing seasons. The Defendants include Marlin Ranching, Marlin Growers, Servicios Agricolas Mexicano (SAMCO), and Servicios Agricolas Mex Inc. (SAMI), along with individuals Richard and Ralph De Leon. Plaintiffs allege that these entities acted as a joint employer, with Marlin Ranching overseeing the farming operations and determining work schedules. 

Plaintiffs were employed by SAMCO and/or SAMI while performing harvesting duties for the Marlin entities. They assert that they were required to wait at designated locations, specifically at a bus stop known as the 'corralon,' before starting work, which was influenced by weather conditions necessary for lemon picking. The Plaintiffs claim they were not compensated for this waiting time, even though their workdays were effectively impacted by these delays. The Court denied the Defendants' motion for summary judgment but granted the Plaintiffs' motion in part, indicating that some aspects of the Plaintiffs' claims were upheld while others were rejected.

Plaintiffs assert that they often arrived at the fields only to find the lemons not ready for picking, leading to mandatory waiting periods. They claim they were not fully compensated for travel time from the corralon to the fields in Arizona and California, nor for intra-day travel between fields. Evidence indicates Defendants failed to accurately record such waiting and travel time. A specific group of U.S.-citizen Plaintiffs alleges discrimination, claiming that Defendants did not rehire them in favor of H-2A immigrant workers for the 2006-07 harvest, despite having previously recruited U.S. workers. Defendants applied to import temporary foreign workers without attempting to solicit their U.S. workforce, contrary to Department of Labor guidelines. The Jimenez Plaintiffs bring four claims: 1) violation of the Fair Labor Standards Act (FLSA), 2) violation of the Migrant and Seasonal Agricultural Worker Protection Act (AWPA), 3) breach of contract, and 4) violation of California labor laws. The Figueroa Plaintiffs allege 1) violation of AWPA and 2) discrimination based on citizenship under 42 U.S.C. 1981. Plaintiffs seek summary judgment on their claims, while Defendants seek summary judgment on the discrimination claim. The legal standard for summary judgment requires the moving party to show a lack of genuine issue of material fact, with the burden shifting to the nonmoving party to demonstrate such an issue exists.

Supporting affidavits must be based on personal knowledge, present admissible facts, and demonstrate the affiant's competency to testify, as per Fed. R.Civ. P. 56(e)(1). At the summary judgment stage, the evidence from the nonmovant is presumed credible, with all reasonable inferences drawn in their favor, emphasizing that credibility and evidence weighing are jury responsibilities.

Defendants seek summary judgment regarding Plaintiffs' 42 U.S.C. 1981 claim, while Plaintiffs request summary judgment on several points: 1) Defendants were joint employers; 2) Defendants violated the Fair Labor Standards Act (FLSA) by failing to compensate for time spent waiting; 3) Defendants breached the Migrant and Seasonal Agricultural Worker Protection Act (AWPA) by failing to pay wages and maintain records; and 4) Defendants violated California labor laws by not compensating for work performed.

A critical issue is whether U.S. citizens can claim discrimination under 42 U.S.C. 1981 based on citizenship status. Plaintiffs allege that Defendants did not rehire them for the 2006-07 seasons and instead misrepresented facts to hire H-2A workers, which they argue is discriminatory under Section 1981. The statute provides equal rights for "all persons," encompassing both citizens and non-citizens. The text explicitly protects all individuals from discrimination and does not limit rights based on alienage. Defendants' preference for hiring non-citizens, as alleged by Plaintiffs, potentially violates Section 1981 by denying U.S. citizens equal contracting rights.

Conduct described in the excerpt is addressed under Section 1981, which prohibits race-based discrimination. The Supreme Court, in McDonald v. Santa Fe Trail Transp. Co., clarified that Section 1981 protects "all persons" from discrimination, not just non-white individuals. This interpretation extends to protect against discrimination based on citizenship, asserting that Section 1981 applies to all citizenships, including American citizens. In Thomas v. Rohner-Gehrig Co., the court allowed American plaintiffs to amend their complaint under Section 1981 for alleged discrimination based on national origin. This indicates that American citizens can assert claims of citizenship discrimination under Section 1981, as supported by other cases like United States v. Richard Dattner Architects. The defendants’ arguments referencing "alienage" are deemed unpersuasive, as the term is not present in the statute. The Eastern District of New York has supported the notion that Section 1981 encompasses discrimination on the basis of alienage, confirming its applicability to non-U.S. citizens. Ultimately, the plain text of Section 1981, supported by precedents, confirms that it protects against discrimination for all individuals, including Americans, against reverse discrimination. The plaintiffs provided evidence showing that they were not rehired in favor of non-citizen workers, reinforcing their claims under Section 1981.

Defendants are accused of denying Plaintiffs the same contractual rights as others, engaging in discrimination based on citizenship status, which violates Section 1981. Consequently, Defendants' motion on this matter is denied. The 1991 amendment to Section 1981 added provisions that protect rights against both public and private discrimination, as outlined in Section (c). The statute's language is unambiguous, and Defendants did not challenge its constitutionality. Previous case law, such as Bhandari, is not applicable due to the post-amendment context. Courts have affirmed that the amended Section (c) extends protections against private discrimination, as illustrated in cases like Anderson and Chacko, which affirm that alienage discrimination is covered under this section.

Regarding joint employment, the parties concur on the Ninth Circuit's legal standards for determining joint employment under the Fair Labor Standards Act (FLSA) and the Agricultural Worker Protection Act (AWPA), both of which share the same criteria. The definitions of 'employment' are broad, encompassing any circumstance where an entity permits work. The Ninth Circuit employs an 'economic reality' test to assess joint employment relationships under these statutes.

The test for determining joint employment examines the totality of circumstances and economic realities, incorporating a list of factors that include the nature of control over workers, degree of supervision, ability to set pay rates, hiring and firing rights, payroll preparation, the nature of work, transfer of responsibilities between labor contractors, use of employer premises and equipment, employee business organization, work characteristics, opportunity for profit or loss, permanence of the relationship, and the integral nature of the service to the employer's business. In the case at hand, while it is acknowledged that Marlin Growers, Marlin Ranching, SAMI, and Richard De Leon are joint employers, Defendants argue that SAMCO and its president, Ralph De Leon, are not joint employers since SAMCO did not hire any Plaintiffs during the relevant seasons. Plaintiffs must prove that SAMCO employed them, but their motion fails to cite clear evidence of such employment. The Court emphasizes that Plaintiffs, as the movants for summary judgment, bear the burden of proof, and the absence of specific evidence precludes granting summary judgment. Although there is some evidence of SAMCO's connection to Marlin and SAMI, the record does not definitively establish the type or timing of SAMCO's employees. Furthermore, the argument that SAMCO is a joint employer based solely on its relationship with SAMI lacks sufficient evidence to meet the joint employer criteria. Defendants have provided enough evidence to raise factual questions regarding SAMCO's influence over SAMI to warrant further examination.

Richard De Leon's affidavit asserts that SAMCO lacked authority over SAMI regarding harvest scheduling, worker management, and employment conditions, indicating that SAMCO was not a joint employer based solely on its relationship with SAMI. The economic reality test's first five factors—control over workers, degree of supervision, payment determination, hiring/firing authority, and payroll responsibilities—support this conclusion. Additional factors are less relevant when multiple labor contractors are involved, particularly those managing distinct worker groups. Consequently, the evidence suggests that summary judgment on SAMCO's joint employer status should be denied.

Under the Fair Labor Standards Act (FLSA), which mandates minimum wage standards, plaintiffs argue that several time periods should be considered compensable: waiting at the corralon, traveling to the fields, waiting to begin work in the fields, and traveling between fields during the workday. While defendants acknowledge that the two latter timeframes are compensable, they contest the compensability of the waiting time at the corralon and travel to the fields.

FLSA stipulates that employees must be paid for time spent "engaged in commerce." Waiting time is compensable if an employee is "engaged to wait," but not if they are "waiting to be engaged." The assessment of waiting time is fact-intensive, focusing on whether the employee can utilize that time for personal activities.

In Brigham v. Eugene Water, Elec. Bd., the court differentiates between employees who are 'engaged to wait'—which is compensable under the Fair Labor Standards Act (FLSA)—and those who 'wait to be engaged'—which is not. The determination of liability is made by the court based on the facts, while the jury assesses the existence of those facts. Two key factors in this evaluation are: (1) the employee's freedom to engage in personal activities, and (2) the agreements between the parties. 

The Ninth Circuit outlines factors for assessing an employee's freedom, including on-premises living requirements, geographical restrictions, frequency and limits of calls, the ability to trade on-call responsibilities, and whether the employee could use a pager. In Gonzalez v. Tanimura, Antle, Inc., the court found that employees lacked substantial freedom because they were required to remain near the bus stop to avoid missing the bus, limiting their ability to engage in meaningful personal activities.

In the current case, evidence suggests that plaintiffs were similarly constrained. They were required to arrive at a specific time at the corralon and wait for the bus without knowledge of its departure time, significantly restricting their personal activities. Although technically not mandated to take the bus, the plaintiffs faced strong pressure to do so, leading to a practical obligation to wait with limited options for alternative activities.

Plaintiffs had limited freedom to engage in personal activities during times when buses were delayed, as indicated by the Owens factors. The analysis involves examining the agreements between the parties, specifically considering the construction of these agreements and their practical application. The Ninth Circuit identifies three types of agreements, and here, Defendants assert that only a constructive agreement is pertinent. Such an agreement could exist if employees were informed of a compensation policy and continued working under its terms. An issue arises regarding whether a constructive agreement regarding wait time compensation existed. Plaintiffs claim they often waited without pay, a practice not observed with previous employers, while Defendants, supported by Richard De Leon's affidavit, maintain that no compensation for wait time was agreed upon and that employees were aware of the pay structure. Several unresolved issues include whether the parties understood specific times as non-compensable, if employees were informed of the policy, whether Plaintiffs raised complaints, and if they accepted the policy through continued work. The ambiguity surrounding these agreements renders summary judgment inappropriate, as they are crucial for determining whether waiting time should be classified as actual work. While the Owens factors may favor the Plaintiffs, a reasonable jury could still conclude that certain wait times were not compensable due to a potential constructive agreement. Therefore, the matter is deemed suitable for jury determination. Additionally, Plaintiffs seek compensation for travel time from the corralon to the fields on days they waited for harvesting.

Plaintiffs do not seek compensation for travel time on days they voluntarily arrived at the corralon and were subsequently bused to the fields, as such time is likely non-compensable under 29 U.S.C. 254(a). This statute specifies that activities related to traveling to and from the workplace, as well as preliminary and postliminary activities, are not compensable. Normal travel from home to work is considered a regular aspect of employment, regardless of whether the work occurs at a fixed location or multiple job sites.

Plaintiffs argue that travel time should only be compensated on days they waited at the corralon for lemons to be ready for harvest. They assert that this time is compensable if it occurs within a "continuous workday," referencing 29 C.F.R. 785.38, which states that travel from a designated meeting place to the work site is part of the workday if the employee is required to report there for instructions or to gather tools. They maintain that on days with bus delays, their workday commenced as soon as they began waiting for the employer's benefit.

The Court notes that it does not need to decide on the compensability of travel time occurring after the waiting period at the corralon. An issue of fact exists regarding whether this waiting time constituted compensable work time or noncompensable free time. Consequently, the Court cannot conclude that travel time from the bus stop to the fields occurred entirely within the workday under 29 C.F.R. 785.38, leading to the denial of summary judgment regarding this travel time.

Additionally, under the Migrant and Seasonal Agricultural Worker Protection Act (AWPA), Plaintiffs assert that Defendants violated the law in four ways: (1) failing to pay wages when due, (2) not maintaining records of hours spent waiting, (3) knowingly providing false or misleading information, and (4) giving preferential treatment to alien workers. These claims reference various provisions of 29 U.S.C. 1801 et seq., specifically 29 U.S.C. 1832(a) for wage payment issues.

Farm labor contractors, agricultural employers, and associations must pay seasonal agricultural workers their wages when due. Plaintiffs argue that Defendants are liable under Section 1832(a) for failing to pay wages as mandated by both federal and state laws, citing Doe v. D.M. Camp. Sons, which confirms that violations occur when wages are due, regardless of the law's source. A finding of liability under the Fair Labor Standards Act (FLSA) implies a violation of the Agricultural Workers Protection Act (AWPA). Defendants contend that multiple recoveries under different statutes should be avoided; however, the Court finds this argument unsubstantiated. It notes that statutory damages may be awarded under AWPA in conjunction with actual damages under other laws without resulting in double recovery, as established in Martinez v. Shinn.

AWPA mandates that employers maintain accurate records of work hours and piecework units for three years. Plaintiffs claim Defendants failed to document their wait time at the corralon and inaccurately recorded hours worked. Although Defendants acknowledge the missing wait time records, they argue that if this time is not compensable, no violation occurred. The Court identifies a material fact issue regarding the compensability of wait time, leading to a denial of summary judgment on this point. Regarding other alleged inaccuracies, Plaintiffs suggest Defendants' records display significant discrepancies in reported hours worked. However, Defendants assert that damages under AWPA are only applicable for intentional violations, which are defined as conscious and deliberate breaches of the Act.

The excerpt addresses several legal points regarding the interpretation and application of the Agricultural Worker Protection Act (AWPA) and related provisions. 

1. **Intentionality Under AWPA**: The term "intentional" is defined as "conscious or deliberate," allowing for liability without the necessity of proving specific intent to violate the AWPA. Liability can arise from the natural consequences of an individual's actions. A violation is generally deemed intentional if management personnel are aware of record-keeping errors. 

2. **Management Responsibility**: The case of Wales v. Jack M. Berry, Inc. is referenced, which holds that failures in record-keeping are intentional if resulting from deliberate management actions. Conversely, if management was unaware of inaccuracies, they may not be liable.

3. **Defendants’ Claims**: Richard De Leon's affidavit claims ignorance of any record falsification, suggesting that if management did not direct inaccuracies, they would not be liable. De Leon argues that SAMI had no incentive to under-report hours since it would negatively affect their payment from Marlin Growers, indicating that a jury could find a lack of intent to under-report.

4. **Summary Judgment Considerations**: The passage emphasizes that any motives or credibility issues are for the jury to decide, making summary judgment inappropriate given the existing factual disputes about defendants' intentions.

5. **False or Misleading Information**: Under 29 U.S.C. § 1831(e), agricultural employers are prohibited from knowingly providing false or misleading information regarding employment conditions. The court finds that there are factual disputes concerning whether defendants knowingly misstated the hours worked, rendering summary judgment unsuitable for this claim.

6. **Preferential Treatment to Alien Workers**: Plaintiffs allege violations of 29 U.S.C. § 1832(c) for providing preferential treatment to H-2A foreign workers over them, claiming they received better wages and benefits. This section prohibits agricultural employers from unjustifiably violating agreements made with seasonal agricultural workers.

Overall, the excerpt highlights significant legal standards concerning intent, management's accountability, factual disputes regarding liability, and specific prohibitions under the AWPA regarding accurate information and equitable treatment of workers.

Plaintiffs contend that their working arrangement with Defendants implicitly included federal labor law, specifically 20 C.F.R. 655.102(a), which mandates that job offers to U.S. workers must provide at least the same benefits, wages, and working conditions as those offered to H-2A workers. Summary judgment against SAMCO is deemed inappropriate due to factual disputes regarding whether SAMCO employed any Plaintiffs, as no disparate treatment claim under 655.102(a) would exist if SAMCO did not employ them. Conversely, summary judgment is appropriate for the other Defendants, as the requirements of 20 C.F.R. 655.102(a) are not automatically included in the parties' working arrangement. Various district courts in the Ninth Circuit have established that a "working arrangement" under the Agricultural Workers Protection Act (AWPA) refers solely to terms explicitly communicated between the employer and employee, and does not inherently encompass all applicable labor laws. While some out-of-circuit cases suggest that statutory requirements might be impliedly included in a working arrangement, the Court remains hesitant to conclude that 20 C.F.R. 655.102(a) is inherently incorporated at the summary judgment stage. Additionally, while terms in a working arrangement can be communicated through accepted customs or practices, Plaintiffs have failed to demonstrate that the disparate-impact requirements of 20 C.F.R. 655.102(a) were communicated to them in any form, whether explicitly or implicitly.

Plaintiffs' Motion concerning their claim under 29 U.S.C. § 1832(c) is denied. Regarding California wage laws, Plaintiffs assert that while working in California, Defendants violated Section 203 of the California Labor Code and Wage Order No. 14-80 by failing to record and compensate time spent traveling to and from fields and waiting at the corral and in the fields. The California wage laws share similarities with federal labor laws, but their interpretation can differ. Wage Order No. 14-80 mandates that agricultural employers pay workers for "all hours worked," which includes time under employer control and compensable non-production time such as compulsory travel and waiting periods. Plaintiffs cite cases affirming that such wait times are compensable if the workers are under the employer's control. Defendants acknowledge that any compulsory travel and wait time within California is compensable but argue that only time spent within California qualifies. It is established that the waiting time at the corralon in San Luis occurred outside California, and most travel occurred beyond California's borders. The applicability of the California Labor Code to work performed outside the state is ambiguous, though California law typically extends to employment conducted within its borders, as clarified by the California Supreme Court.

An employee is considered a "wage earner of California" and is afforded protection under the Industrial Welfare Commission (IWC) regulations if they reside, receive pay, and work primarily in California. California wage laws apply to residents working outside the state under certain conditions, but the extent of such application for non-residents working temporarily in California remains unresolved, particularly highlighted in the Tidewater case. The court indicated that while California's territorial boundaries are relevant, it did not establish a broad application of IWC wage orders to all employment occurring in California. Other legal precedents emphasize that the location of work, rather than the employee's or employer's residence, is critical for determining the applicability of California wage laws. Cases such as Sarviss and Priyanto confirm that work performed outside California by a California resident is not covered by California wage laws. Additionally, several cases illustrate that state laws apply based on where unlawful conduct occurred, and the California Fair Employment and Housing Act does not extend protections if no employment part took place in California. In the current case, the plaintiffs failed to provide convincing arguments for compensability under California law for time spent waiting or traveling in Arizona, referencing only Sullivan v. Oracle Corp. for support.

Sullivan did not determine the applicability of California wage laws to out-of-state work but certified to the California Supreme Court questions regarding the applicability of California's Unfair Competition Law to overtime work performed inside and outside California. The certification indicates that California law is ambiguous, and it does not imply that work outside California is compensable in this case. The Court acknowledges that Defendants violated California wage laws if Plaintiffs can demonstrate unpaid wait and/or travel time within California but denies summary judgment for time outside California.

Regarding the potential willful violation of California Labor Code Section 203, which stipulates penalties for employers who intentionally fail to pay wages, Defendants do not contest the availability of penalties but argue their failure was not willful. "Willful" is defined as an intentional failure to perform a required act, not necessitating a malicious intent. A good faith dispute over owed wages can prevent the imposition of waiting time penalties. If Plaintiffs can establish that they performed compensable travel and wait time in California and that Defendants intentionally refused to pay, Defendants' actions could be deemed willful. However, the Court denies summary judgment due to unresolved factual issues while clarifying that Plaintiffs are not required to prove malicious intent.

For work outside California, summary judgment for Plaintiffs is inappropriate as California wage law may not apply, indicating Defendants had a "good faith dispute" regarding owed wages. Thus, without sufficient evidence of a violation, any claims for willful violations under Section 203 for out-of-state work are unsupported.

Plaintiffs allege that Defendants violated California Labor Code Section 204.3(f), which mandates that employers maintain accurate records of compensating time earned and used. However, Plaintiffs do not clarify how this provision is applicable, as Section 204.3 specifically relates to compensating time off instead of overtime compensation. Compensating time is defined as hours not counted as work for overtime purposes, compensated at the employee's regular rate. Moreover, this section does not apply to employees under Wage Order No. 14-80, which governs Plaintiffs' employment. The Court notes that Plaintiffs may have waived their argument regarding Section 204.3 since it was not included in their Complaint.

The Court's rulings include: 
1. Denial of Defendants' Motion for Summary Judgment.
2. Partial granting and denial of Plaintiffs' Motion for Summary Judgment, confirming that Marlin Growers, Marlin Ranching, SAMI, and Richard De Leon are joint employers, while leaving the employer status of other Defendants unresolved.
3. Recognition that if Plaintiffs can demonstrate at trial that they spent time waiting in the fields or traveling between fields, such time is compensable. Summary judgment regarding waiting time at the corralon and travel time between the corralon and fields is denied.
4. Under the Agricultural Worker Protection Act (AWPA), if Plaintiffs can prove Defendants were required to pay wages under FLSA or California laws, liability under AWPA is established, with summary judgment denied on other aspects.
5. For California wage laws, if Plaintiffs can prove compensable wait or travel time, it constitutes a violation, with potential statutory penalties for willful violations under Cal. Lab. Code. 203. Summary judgment is denied on other grounds.

Additionally, notes reference the interpretation of Section 1981 concerning discrimination based on alienage and citizenship, emphasizing its applicability against private discrimination and state laws that discriminate based on citizenship. Plaintiffs challenge Richard De Leon's affidavit as overly conclusory.

Evidence at the summary judgment stage must meet the criteria of admissibility and personal knowledge as outlined in Fed. R. Civ. P. 56(e)(1), avoiding unsupported conjecture or conclusory statements, as established in Hernandez v. Spacelabs Med. Inc. The context of Richard De Leon's affidavit regarding SAMI provides sufficient factual basis and details about SAMCO's control. The types of agreements discussed include those under collective bargaining and express agreements tied to compensation policies. The case Gonzalez, which ruled on compensable wait time at a bus stop, is distinguished from the current case due to the lack of an implied agreement and clearer facts. 

Moreover, although 20 C.F.R. 655.102 has been amended, the court refers to the earlier version for this motion. Plaintiffs' claims of wage violations under 29 U.S.C. 1832(a) are rejected for similar reasons. California law states that while compulsory travel time is compensable, optional travel time is not, as noted in Morillion and Overton. However, Gonzalez indicates that time spent waiting under employer control may be compensable. Finally, according to Section 201(a) of the California Labor Code, wages earned and unpaid at the time of discharge must be paid immediately.