United States District Court, E.D. California
[Copyrighted Material Omitted]
Gregory Ramirez, James Engel Perero, Myers, Widders, Gibson, Jones & Feingold, LLP, Jessica Arciniega, Wasserman, Comden & Casselman, Ventura, CA, William Cooper Callaham, Wilcoxen Callaham, Sacramento, CA, Katherine Winder, Murchison & Cumming LLC, Los Angeles, CA, Marcos Rodrigo Camacho, Marcos Camacho, A Law Corporation, Bakersfield, CA, Melissa Meeker Harnett, Wasserman, Comden, Casselman & Esensten, L.L.P., Tarzana, CA, for Plaintiffs.
Ryan Solomon, PHV, Cynthia A. Stross, PHV, David N. Bruce, PHV, James P. Savitt, PHV, Miles A. Yanick, PHV, Sarah Gohmann Bigelow, PHV, Savitt Bruce & Willey LLP, Seattle, WA, William C. Hahesy, Law Offices of William C. Hahesy, Howard A. Sagaser, Atkinson, Andelson, Loya, Ruud & Romo, Fresno, CA, for Defendants.
MEMORANDUM OF DECISION
WILLIAM B. SHUBB, District Judge.
Plaintiffs are a certified class of field workers employed by farm labor contractors T & R Bangi's Agricultural Services (" T & R Bangi" ) and Cal-Pacific Farms (" Cal-Pacific" ), who performed work for defendant Delano Farms Company (" Delano Farms" ) during the period from 2005 to 2009. On January 15, 2013 through January 30, 2013, the court conducted a seven-day bench trial on the limited issue of whether during the relevant time frame Delano Farms employed plaintiffs under the Migrant Seasonal Agricultural Workers Protection Act (" AWPA" ), 29 U.S.C. § 1801 et seq., and under applicable California law.
For the reasons discussed in detail below, the court concludes that T & R Bangi and Cal-Pacific were independent contractors, but that Delano Farms was a joint employer of plaintiffs under both the AWPA and the applicable California law. This memorandum constitutes the court's findings of fact and conclusions of law pursuant to Federal Rule of Civil Procedure 52(a).
I. Factual and Procedural Background
Delano Farms is a grower of table grapes that has been in operation for more than nineteen years. It owns approximately 6,300 acres of non-contiguous vineyards in Central California. Delano Farms has structured its business to be streamlined and lean. As a result, Delano Farms contracts for many of its farming functions, such as pre-harvest field work, picking and packing the grapes during harvest, and moving the packed grapes from the fields to the cold storage facility— also called " swamping." The primary field tasks performed in-house are fertilizing the crops, preparing the fields for planting, and irrigating the plants. The core of the Delano Farms management team consists of Joe Campbell, Jack Campbell, and Scott Quashnick.
T & R Bangi and Cal-Pacific are farm labor contractors who specialize in providing field employees to grape growers. T & R Bangi is a corporation whose shares are divided equally between two brothers, Terry and Teddy Bangi. T & R Bangi provided field labor services to Delano
Farms since Delano Farms' inception around 1992 until 2004.
In 2004, Cal-Pacific, a limited partnership, was formed. Craig Neville, an administrative employee from T & R Bangi, was the general partner of Cal-Pacific, and the Bangis' wives were the two limited partners. Cal-Pacific was formed when the liability insurance rates for T & R Bangi's field labor services increased. (Tr. 161:12-21.) Terry and Teddy Bangi continued to control the operations of Cal-Pacific, and the organizational structure remained unchanged. After Cal-Pacific was formed, T & R Bangi stopped providing field labor services to farms.
Cal-Pacific provided field labor services to Delano Farms from 2004 to 2009. In 2009, once T & R Bangi could procure liability insurance at a lower rate, Cal-Pacific ceased operations, and T & R Bangi once again began providing services to Delano Farms. T & R Bangi provided farm labor services to Delano Farms until approximately 2012. Kern Ag Labor Management, Inc., an organization formed by Terry Bangi without his brother, currently provides field labor services to Delano Farms. Because of the close ties between T & R Bangi and Cal-Pacific, the court will refer to them together as " Contractor" unless it is necessary to do otherwise.
Contractor provided several thousand farm laborers to Delano Farms. (Tr. 86:4-5.) Pre-harvest services include pruning, suckering, tipping, girdling, and tying. During harvest, the workers would typically work in teams of three. Two workers would pick the grapes and deliver them to tables at the end of a crop row, where a packer would pack the grapes into boxes, trays, or clamshells, depending on the final destination of the grapes. (Tr. 335:9-13.) A foreman would supervise a crew, which consisted of many teams and approximately 60 people. (Tr. 333:10-21.) Foremen would then report to a supervisor. Supervisors would report to Contractor management, including Craig Neville, an administrative employee, or Terry Bangi. There were approximately ten supervisors working for Contractor. The total number of workers, including supervisors, would vary during the year depending on how much work Contractor was performing.
In 2009, the named plaintiffs brought suit against Contractor and Delano Farms for wage and hour violations under both the AWPA (29 U.S.C. § 1801 et seq. ) and California law, including Wage Order 14 (8 Cal.Code Reg. § 11140) and the California Labor Code. (Docket No. 2.) The class was certified on April 19, 2011. (Docket No. 85). Delano Farms brought a motion for summary judgment, arguing that it did not employ plaintiffs under either federal or California law, but the motion was denied. (Docket No. 165). Delano Farms then moved to bifurcate the trial. (Docket
No. 169.) The court ordered that the issue of whether Delano Farms employed plaintiffs should be tried separately by bench trial. (Docket No. 175.) The bench trial began on January 15, 2013 and ended on January 30, 2013.
A. Employment under the AWPA
Under the AWPA, the term " agricultural employer" means " any person who owns or operates a farm, ranch, processing establishment, cannery, gin, packing shed or nursery, or who produces or conditions seed, and who either recruits, solicits, hires, employs, furnishes, or transports any migrant or seasonal agricultural worker." 29 U.S.C. § 1802(2) (emphasis added). The term " employ" for the purposes of the AWPA has the same meaning as Section 3(g) of the Fair Labor Standards Act (" FLSA" ). Id. § 1802(5). The FLSA defines " employ" as " to suffer or permit to work." 29 U.S.C. § 203(g). The ultimate question of whether a defendant is an " employer" is a legal question. See Bonnette v. Ca. Health & Welfare Agency, 704 F.2d 1465, 1468 (9th Cir.1983).
The Ninth Circuit has noted that " [c]ourts have adopted an expansive interpretation of the definitions of ‘ employer’ and ‘ employee’ under the FLSA, in order to effectuate the broad remedial purposes of the Act." Real v. Driscoll Strawberry Asscs., Inc., 603 F.2d 748, 754 (9th Cir.1979). Congress passed the AWPA to correct the narrow definition of " farm labor contractor" under the Farm Labor Contractor Registration Act, and the expansive definitions under the FLSA should be applied to the AWPA as well. See Torres-Lopez v. May, 111 F.3d 633, 639 (9th Cir.1997).
Under regulations passed pursuant to the AWPA, " [t]he definition of the term ‘ employ’ may include consideration of whether or not an independent contractor relationship exists under the Fair Labor Standards Act." 29 C.F.R. § 500.20(h)(4). " If it is determined that the farm labor contractor is an employee of the agricultural employer/association, the agricultural workers in the farm labor contractor's crew are deemed to be employees of the agricultural employee/association ...." Id.
If, on the other hand, a farm labor contractor is found to be a bona fide independent contractor, the court must still analyze " whether or not the employees of the farm labor contractor are also jointly employed by the agricultural employer/association." Id. § 500.20(h)(5)(i).
1. Independent Contractor or Employee
" In determining if the farm labor contractor ... is an employee or an independent contractor, the ultimate question is the economic reality of the relationship— whether there is economic dependence upon the agricultural employer/association or farm labor contractor, as appropriate." Id. § 500.20(h)(4); see Real, 603 F.2d at 755-56 (holding that when distinguishing employees from independent contractors the test must focus on the economic realities of the total circumstances). In making this determination, courts are to consider all circumstances, including the following:
(i) The nature and degree of the putative employer's control as to the manner in which the work is performed;
(ii) The putative employee's opportunity for profit or loss depending upon his/her managerial skill;
(iii) The putative employee's investment in equipment or materials required for the task, or the putative employee's employment of other workers;
(iv) Whether the services rendered by the putative employee require special skill;
(v) The degree of permanency and duration of the working relationship;
(vi) The extent to which the services rendered by the putative employee are an integral part of the putative employer's business.
29 C.F.R. § 500.20(h)(4).
" Neither the presence nor absence of any individual factor is determinative." Donovan v. Sureway Cleaners, 656 F.2d 1368, 1370 (9th Cir.1981). While these factors are helpful to the courts in determining the economic reality between the parties, the analysis is " not a mechanical determination." Bonnette, 704 F.2d at 1470. The factors " provide a useful framework for analysis," but are not " etched in stone and will not be blindly applied." Id. The relationship between the parties " is not determined by a mathematical formula," and " [t]he purpose of weighing the factors is not to place each in either the contractor or grower's column, but to view them qualitatively to assess the evidence of economic dependence, which may point to both." Antenor v. D & S Farms, 88 F.3d 925, 933 (11th Cir.1996). Ultimately, the " determination of the relationship does not depend on such isolated factors but rather upon the circumstances of the whole activity." Rutherford Food Corp. v. McComb, 331 U.S. 722, 730, 67 S.Ct. 1473, 91 L.Ed. 1772 (1947).
a. Delano Farms' Control Over the Work
In Real, the court analyzed the relationship between Driscoll Strawberry Associates (" D.S.A." ), Donald Driscoll, and sublicensee growers. Real, 603 F.2d at 750-51. Driscoll provided patented strawberries to Driscoll, who in turn granted sublicensees the right to grow the crop on a parcel of land, usually about three acres. Id. The court found that economic realities between the parties did not indicate an independent contractor relationship when, among other things, D.S.A. had the power to reject Driscoll's choices of sublicensees, " determine the quantity and variety of the strawberry plants grown by [the sublicensees]," and control " certain important decisions in growing the strawberries, including the spacing of the plants, when and how much fertilizer is to be applied, and the timing and type of spraying for insects." Real, 603 F.2d at 756. In addition, D.S.A. inspectors directly supervised the sorting and grading of the strawberries at harvest. Id.
In Torres-Lopez v. May,  the Ninth Circuit rejected a district court's finding that a grower did not exercise control when the grower " only gave general instructions to [the farm labor contractor] as to when to begin harvesting and what fields to harvest." Torres-Lopez, 111 F.3d at 642. Rather, the court found that the grower " in fact did exercise significant control" when it " controlled the harvest schedule and the number of workers needed by staggering the planting dates of the [crop]," " advised [the farm labor contractor] about when to begin harvest," and " had the power to decide which days were suitable for harvesting; for example, it called off the harvest one day because of a shortage of bins." Id. at 642. But see Martinez-Mendoza v. Champion Intern. Corp., 340 F.3d 1200, 1211 (11th Cir.2003) (noting that " the drafting of planting specifications is unquestionably an agricultural decision which does not constitute the type of ‘ control’ that the FLSA and [AWPA] address" ). The grower also " exercised a substantial degree of supervision over the work performed by the farmworkers" because
it " had the right to inspect all the work performed by the farmworkers, both while it was being done and after the [crop] was picked," one of the grower's supervisor's " daily presence in the field helped ensure that the farmworkers performed satisfactorily," and the farm labor contractor " communicated three to four times a week with [the grower's supervisor] to ensure that [he] was satisfied." Id. at 642-43. As characterized by a later Ninth Circuit case, the " grower's representative established the harvest schedule and closely monitored the picking of the plants." Moreau v. Air France, 356 F.3d 942, 947 (9th Cir.2003).
While Real and Torres-Lopez indicate that supervision over the quality of the work could be one consideration to support a finding of control, subsequent cases, such as Moreau v. Air France and Zhao v. Bebe Stores, Inc., 247 F.Supp.2d 1154 (C.D.Cal.2003), indicate that supervision over quality control with little more does not contribute to a finding of an employment relationship. In Moreau, the Ninth Circuit found that there was not an employment relationship when, among other factors, an airline had no ability to directly control the workers, " but would instead communicate any complaints about performance to the service company's supervisors." Moreau, 356 F.3d at 950-51. In addition, while the airline was very specific about how it wanted its work performed and checked to ensure that its standards were met, it was " noteworthy" that " much of the indirect supervision or control exercised by Air France over the ground handling employees was purportedly to ensure compliance with various safety and security regulations." Id. at 951.
In Zhao, a district court noted that, while a national clothing retailer employed quality control personnel at a garment manufacturer's manufacturing facility— even to the point of one quality control supervisor keeping an office at the facility— " the record [fell] short of demonstrating that this involvement could be properly characterized as control," since the garment manufacturer " had its own supervisors who were primarily responsible for the day to day management of its employees." Zhao, 247 F.Supp.2d at 1160.
As in Moreau, Delano Farms was specific about the quality of grapes it desired. Every day the Delano Farms sales team would tell Terry Bangi what types of grapes customers demanded and the type of container those grapes would be packed in. (Tr. 241:12-242:1, Ex. 109.) To ensure the quality of the grapes, testimony revealed that Delano Farms largely employed quality control personnel in the cold storage facility, where the Delano Farms personnel would inspect grapes for weight, size, and other attributes. (Tr. 369:12-370:13.) Quality control personnel also occasionally operated outside the cold storage facility, such as when Delano Farms designated tractor or irrigation workers to inspect grapes in the ...