John Barks v. Silver Bait LLC

Citations: 802 F.3d 856; 25 Wage & Hour Cas.2d (BNA) 669; 2015 FED App. 0242P; 2015 U.S. App. LEXIS 17310; 2015 WL 5751618Docket: 15-5175

Court: Court of Appeals for the Sixth Circuit; October 2, 2015; Federal Appellate Court

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John Barks and Brenda Hoffman appeal a district court's declaratory judgment that the activities of their former employer, Silver Bait LLC, fall under the definition of 'agriculture' in the Fair Labor Standards Act (FLSA). The appeal, heard by the Sixth Circuit, stems from a bench trial where the court ruled that Silver Bait's operations—specifically, the growing and raising of worms for fishing bait—constitute agricultural activities. 

Bruno Durant, the president of Silver Bait, established the business after relocating from Georgia to Tennessee in 2005, where he purchased 750 acres. Silver Bait operates as a partially integrated farming entity, importing large quantities of baby worms from Europe and nurturing them in specially designed concrete worm houses. These structures, equipped with drainage and adequate space for growing, facilitate the rearing of worms, which are fed a corn-based diet that Durant produces on-site. The feeding process occurs approximately three times weekly, and worms are typically harvested once they reach a specific size and maturity.

Between 2008 and 2011, Silver Bait managed the feeding and raising of numerous truckloads of worms annually. The harvesting process involves machinery that extracts worms from their beds, separates them from feed and dirt, and sorts them by size before packaging for sale. The court affirmed the lower court's ruling, supporting the classification of Silver Bait's operations as agricultural under the FLSA.

Silver Bait manufactures customized bait cups using an injection-molding machine rather than purchasing standard food-grade cups. In the production process, workers place approximately thirty worms in each cup, which are then filled with dirt and sealed with lids via an automated system. Afterward, the cups are labeled and prepared for delivery. Silver Bait does not pay overtime, believing its employees qualify for an agricultural exemption. In April 2009, the Department of Labor initiated an investigation into potential FLSA violations, initially concluding that Silver Bait did not meet the agricultural exemption criteria. However, after transferring the case to the Knoxville office, a report in 2010 found the employees exempt, classifying Silver Bait as an agricultural employer due to its seasonal workforce involved in cultivating worms. The Department ordered Silver Bait to pay overtime for one specific period when it operated as a wholesaler but otherwise upheld the exemption.

Subsequently, Barks and Hoffman, after obtaining consent from eleven workers, filed a collective action under the FLSA for unpaid overtime, with additional opt-in plaintiffs joining later. The district court held a two-day bench trial, where the central issue was the applicability of the agricultural exemption. The plaintiffs argued that worm farming did not fit the FLSA's definition of agriculture, while Silver Bait maintained that it did. The district court sided with Silver Bait, declaring its employees exempt under the agricultural exemption. The plaintiffs have since appealed the decision. The FLSA mandates overtime pay for covered employees but allows for specific exemptions, which are interpreted narrowly against employers.

An employee qualifies for an exemption only if they are "plainly and unmistakably" covered by its terms, as established in Arnold v. Ben Kanowsky, Inc. The Fair Labor Standards Act (FLSA) exempts employees engaged in agriculture, encompassing a wide range of agricultural activities as defined in 29 U.S.C. § 213(b)(12). The Supreme Court has characterized this exemption as broad but limited strictly to agriculture, necessitating careful delineation of what constitutes agricultural work. Agriculture is divided into two categories: primary agriculture, which includes farming activities explicitly listed in the statute, and secondary agriculture, which encompasses non-farming activities closely related to farming. The Department of Labor's interpretive guidance is influential but not legally binding, as the agency has refrained from exercising its rulemaking authority on these matters. Courts must give deference to the Department's reasonable interpretations, provided it has the congressional authority to do so.

The district court found that Silver Bait is engaged in worm farming, a determination not contested by the Plaintiffs. The court categorized worm farming as agriculture in its primary sense, rather than a secondary interpretation. While not every employee at a farming operation qualifies as an exempt agricultural worker, the Plaintiffs concede that they would be exempt if Silver Bait is deemed a farming operation, which limits the review to the definitions of 'agriculture' and 'farming in all its branches.' 

The terms are defined broadly, with 'agriculture' encompassing the cultivation of soil, harvesting crops, and raising livestock. 'Farming' involves devoting land to agriculture and managing it for crop or livestock production. While dictionary definitions provide guidance, they are not definitive. The district court found that activities at Silver Bait align closely with traditional farming, and the Plaintiffs did not contest that employees engaged in non-farming roles would still qualify for the agricultural exemption if worm farming is deemed agricultural.

Furthermore, the interpretive scope of 'farming in all its branches' is informed by examples in the Fair Labor Standards Act (FLSA). Although raising worms is not explicitly listed among examples such as soil cultivation or dairying, it may still qualify under the broader definition that includes the production and cultivation of agricultural commodities. The FLSA’s broad examples illustrate Congress's intent regarding agricultural activities, reinforcing that worm farming fits within this framework as it involves agricultural techniques and products.

Commodities produced through the gathering or harvesting of wild resources, such as mosses, wild rice, burls, laurel plants, wild animal trapping, and the appropriation of uncultivated minerals, are excluded under 29 C.F.R. 780.114. Courts have recognized Christmas trees and pine straw as agricultural commodities, while peat has been excluded (N.C. Growers, 377 F.3d at 352; Morante-Navarro v. T&Y Pine Straw, Inc., 350 F.3d 1163, 1170; Wirtz v. Ti Ti Peat Humus Co., 373 F.2d 209, 213). The classification of worms hinges on whether they are categorized as agricultural commodities, similar to cultivated products rather than wild ones. Although worms share a classification with livestock (including animals like cattle and swine), they do not fit traditional livestock definitions, which exclude species like fish and rodents (29 C.F.R. 780.120). Thus, raising worms does not qualify for exemption under existing statutory examples.

In evaluating whether worm farming is an unlisted agricultural activity, the Department emphasizes the broad interpretation of farming, including all related activities (29 C.F.R. 780.107). The nature, purpose, and context of the activities are considered (29 C.F.R. 780.109). Silver Bait's worm farming aligns with traditional farming objectives, as it involves raising animals for sale. While worms are not conventional farm animals, the definition of farming is not limited to traditional practices, allowing for a broader interpretation that includes worm cultivation.

The FLSA outlines traditional forms of farming while allowing for exemptions of unlisted activities (29 U.S.C. 203(f)). The Supreme Court supports a flexible interpretation of agriculture, emphasizing modernization and economic progress (Maneja, 349 U.S. at 724; Farmers Reservoir, 337 U.S. at 760–61). The agricultural classification is broad enough to include the cultivation of crops and livestock that may not have been considered when the law was enacted. For instance, the use of worms as bait does not negate their agricultural status, just as fur-bearing animals and horticultural commodities are recognized as farming products (29 U.S.C. 203(f)). 

Case law supports the agricultural exemption for diverse activities, including raising racehorses (Marshall v. Thiele, 1978) and cattle for serum production. The Department of Labor recognizes that farming encompasses all agricultural activities, regardless of whether they are explicitly listed (29 C.F.R. 780.107). Plaintiffs argue for a restrictive interpretation of the types of animals covered under the exemption, but the Department clarifies that livestock definitions do not exclude unlisted animals (29 C.F.R. 780.119). 

Fish farming is separately exempted under 29 U.S.C. 213(a)(5) but also falls under the general agricultural definition (29 C.F.R. 780.109), with courts affirming that raising fish constitutes agricultural activity (e.g., Hedrick, 2010; Tullous, 2008). Both fish and worms, while not traditional farm animals, are treated as agricultural commodities. The evaluation of activities must be independent, as stated in 29 U.S.C. 209(f), with separate analyses for each farming activity (Bayside Enters., 429 U.S. at 301).

Silver Bait’s worm-raising operations qualify as farming under the Fair Labor Standards Act (FLSA) agricultural exemption, despite the purchase of feed. The company engages in comprehensive activities such as housing, feeding, monitoring growth, and harvesting worms. Legal precedents establish that extensive care and management classify a product as a "cultivated commodity," distinguishing it from wild harvesting. Although the operations may resemble industrial production due to the use of sorting machines and concrete worm beds, modern farming practices also incorporate industrial characteristics. Relevant case law supports that processing and raising livestock, including eggs and hogs, is considered farming. Consequently, the court agrees with both the Department and the district court's conclusion that worm farming is a legitimate form of agriculture under the FLSA, leading to the affirmation of the district court's judgment.