USDOL v. Peters d/b/a Fresno AG Labor Services, 87-MSP-16 (Sec'y Mar. 17, 1995)
DATE: March 17, 1995
CASE NO. 87-MSP-00016
IN THE MATTER OF
SECRETARY OF LABOR, UNITED STATES
DEPARTMENT OF LABOR,
PLAINTIFF,
v.
LAWRENCE PETERS, DOING BUSINESS AS
FRESNO AG LABOR SERVICES,
DEFENDANT.
BEFORE: THE SECRETARY OF LABOR
FINAL DECISION AND ORDER
This case arises under the Migrant and Seasonal Agricultural
Worker Protection Act (MSPA or the Act), 29 U.S.C. §§
1801-1872 (1988), and its implementing regulations at 29 C.F.R.
Part 500 (1994). On September 21, 1988, the Administrative Law
Judge (ALJ) issued a Ruling and Order On Motion For Summary
Judgment (R. and O.) which denied the Wage and Hour
Administrator's (Administrator or Wage and Hour) attempted
assessment of $52,000 in civil money penalties against Mr. Peters
and his firm (Peters or the Defendant) and entered a summary
judgment in favor of the Defendant. The Administrator sought to
assess these penalties for alleged violations of the MSPA
including ,000 for Defendant's alleged use of an unregistered
farm labor contractor (FLC) and $51,000 for his alleged use of
certain illegal aliens. The Defendant moved for summary judgment
on the ground that he was an "agricultural employer" (AGER) under
the Act and, therefore, exempt from certain provisions of the
Act.
The case is now before me for final review and the issuance
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of a final order. 29 U.S.C. § 1853(b). The ALJ's Ruling
and Order on Motion for Summary Judgment is, for the reasons set
forth below, vacated and remanded.
BACKGROUND
As noted above, the crux of this case is whether, under a
statute enacted for the clearly remedial purpose of protecting
migrant and seasonal agricultural workers, enforcement action (in
the form of civil money penalties) can be instituted against an
individual as a FLC when that individual has also functioned, in
part, in the AGER classification which the MSPA expressly exempts
from coverage. The proposed enforcement action followed an
investigation by the Wage and Hour Division and is based on their
determination that Peters is the owner and operator of the Fresno
AG Labor Services enterprise and that while operating in that
capacity he performed certain functions which the Act defines as
those of a farm labor contractor, i.e., the recruiting,
soliciting, hiring, employing, furnishing or transporting of any
migrant or seasonal agricultural worker. These facts are
undisputed, however, Defendant Peters contends that they are
irrelevant to the ultimate determination in the case.
The complicating factor in the case, and the factor which
was legally dispositive to the ALJ, is Peters' simultaneous
ownership of an 80 acre fruit farm, "which is a combined vineyard
and orchard under cultivation. The defendant recruits migrant
workers for performance of work on his farm and also recruits
labor for some neighboring farms." R. and O. at 3. The
government argues that Peters clearly operated in a dual
capacity. Peters' 1985 tax return lists his occupation as "labor
contractor" and reveals that the majority of his 1985 income was
derived as a FLC, rather than an AGER. As a result, the
Administrator contends that Peters should be viewed and treated
as two separate and distinct business entities under the Act --
with his documented and allegedly dominant labor contracting
activities subjecting him to the Act's substantive FLC provisions
and the penalties sought to be imposed.
The ALJ found all of the above factors to be secondary to 1)
Peters' undisputed status as an agricultural employer, thus
exempting him from the MSPA's registration requirements, and 2)
the limited purposes behind the enactment of the MSPA,
i.e., the regulation and control of migrant crew leaders
or "middlemen" (a/k/a "crew pushers"), as opposed to the more
stable fixed-situs employers represented by the exempted category
of "agricultural employers." As a result, the ALJ totally
rejected the Administrator's argument that Peters should be
treated as a part-time FLC (despite his registration as such -- a
fact which the ALJ found to be of "no particular significance")
by finding that such a split characterization is negated by the
Act's own
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definition of a FLC as someone other than an AGER. 29 U.S.C.
§ 1802(7); R. and O. at 3.
The ALJ held that in defining a FLC in this manner the
Congress had "[carved] out an exception for the agricultural
employer, which is specific and unequivocal, in effect allowing
him to engage in 'farm labor contracting activity' for money or
other valuable consideration although engagement in such activity
for consideration but for the exception would define him as a
'farm labor contractor.'" Id. DISCUSSION
As referenced by the R. and O., the Act defines the
principal terms in this case, i.e., "agricultural
employer," "farm labor contractor" and "farm labor contracting
activity," in relevant part as follows:
The term 'agricultural employer' means any person who
owns or operates a farm, ranch . . . , or who produces
or conditions seed, and who either recruits, solicits,
hires, employs, furnishes or transports any migrant or
seasonal agricultural worker;
The term 'farm labor contracting activity' means
recruiting, soliciting, hiring, employing, furnishing,
or transporting any migrant or seasonal agricultural
worker.
The term 'farm labor contractor' means any person,
other than an 'agricultural employer,' an agricultural
association, or an employee of an agricultural employer
or agricultural association, who, for any money or
other valuable consideration paid or promised to be
paid, performs any farm labor contracting activity; and
29 U.S.C. §§ 1802(2), (6) and (7). While it is
abundantly clear that the MSPA is remedial employee protection
legislation, that general characterization must be considered in
view of and in conjunction with Congress' express declaration of
policy and purpose, as follows:
It is the purpose of this chapter to remove the
restraints on commerce caused by activities detrimental
to migrant and seasonal agricultural workers; to
require farm labor contractors to register under
this chapter; and to assure necessary protection for
migrant and seasonal agricultural workers, agricultural
associations, and agricultural employers
(emphasis supplied).
29 U.S.C. § 1801.
In awarding summary judgment to the Defendant, the ALJ made
the following critical determinations with regard to the MSPA
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generally, and the "agricultural employer" exemption in
particular:
1) [T]he predecessor statute [1] had been interpreted
and enforced to require farmers, processors and other
fixed situs employers of migrant and seasonal workers
to register. Congress regarded the application of the
registration requirement to such persons as 'redundant
and unnecessary' and sought to end it by the provision
of the new Act exempting agricultural employers from
registration. H.R. Rep. No. 885, 97th Cong., 2d Sess.,
Reprinted in 1982, U.S. Code Cong. & Adm. News 4547,
4549-50. R. and O. at 6;
2) The agricultural employer exemption, is new and was
adopted with the specific intention of changing and
narrowing the application of the earlier statute's
registration requirements. See, E.G. [sic] 128 Cong.
Rec. H. 7905 S. 11739; H.R. Rep., No. 885, reprinted in
1982, U.S. Code Cong. & Adm. News at 4550. R. and O.
at 3; and
3) In the instant case, the [D]efendant has apparently
presented proof satisfactory to the government that he
is an 'agricultural employer' within the meaning [of]
§ 3 of the Act, 29 U.S.C. § 1802(2). He is
not therefore a 'farm labor contractor' as defined by
statute. 29 U.S.C. § 1802 (7). That provision
expressly contemplates the 'agricultural employer's'
engagement in farm labor contracting activity . . . and
does not qualify or restrict that activity as the
legislature might easily have done had that been their
intent." R. and O. at 4.
Item 3 above is a direct response to the "dual capacity"
argument which the government made before the ALJ and continues
to pursue on this appeal. Specifically, the government would
frame the issue to be decided on review, as follows: "whether
Peters can bootstrap from the 'agricultural employer' exemption
to avoid MSPA coverage of his separate and distinct farm labor
contracting business, or whether the MSPA's provisions are
separately applied to an individual performing two separate and
distinct business functions governed by MSPA." Brief of the
Administrator at 2, 3. Central to the Administrator's prayer for
reversal of the ALJ's disposition is her view that Peters should
be subject to FLC requirements by virtue of his FLC activities.
Id. at 5. In support of this position, the Administrator
argues that MSPA is a remedial act necessitating a broad
construction of its coverage and that exemptions from the Act (as
with other
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remedial statutes) must be narrowly construed.
In her declaration that the R. and O., should it be
sustained, would have adverse consequences to the MSPA
enforcement program, the former Administrator stresses several
points for consideration:
1) That Mr. Peters, while in part an AGER, is
predominately a FLC who because of his extensive farm
labor contracting activity for others, 'is the very
person who was intended to be included within the
definition of an FLC, particularly in this case where
his independent FLC activities are not connected to his
farming operations.' Administrator's Declaration
(A.D.) at 3;
2) Although recognizing that the FLC registration
provisions were enacted by Congress, 'in order to
control traditional crew leaders who were generally
transient and moved their crew from job to job,' A.D.
at 3, Congress 'would have intended' to regulate the
FLC activities of even a fixed-situs employer such as
Peters, since 'any FLC can render void his obligations
under the Act simply by alleging that he owns and
operates a farm.' A.D. at 3,4; and
3) The ALJ's determination that AGERs are completely
beyond the reach of the FLC requirements would, if
upheld, make the enforcement of such requirements
significantly more difficult, 'since such a
determination would encourage FLCs to create
questionable farm ownership agreements in order to
escape application of the Act to them.' A.D. at 4.
The opinion(s) of the Wage-Hour Administrator are entitled
to enhanced deference even in this matter where they do not
amount to formal regulatory guidance. [2] Moreover, the facts
of this matter clearly reveal that Peters was, predominantly, a
farm labor contractor (FLC) for the period at issue. Indeed, his
own state of mind on this question is clearly revealed by the
fact that he registered as a FLC.
In addition, the case upon which Defendant so heavily
relies, Mendoza v. Wright Vineyard Management, 783 F.2d
941 (9th Cir. 1986), does not support Defendant's argument. The
Mendoza court faced the question of whether the AGER
exemption from registration as a FLC should be applied to a
corporate entity which, among its other significant functions,
also performed certain farm labor contracting activities. The
court held that "[t]he clear language of the Act and its
legislative history convince us that vineyard management
companies are included
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within the 'agricultural employers' exemption from the Act's
registration requirement. Mendoza at 945.
(emphasis added).
As the court noted, "[t]he purpose of the registration provision
in both the present Act and its predecessor (FLCRA, 7 U.S.C.
§§ 2041-2953, repealed 1983) was to aid the enforcement
of regulatory provisions against traditional 'crew leaders' or
'crew pushers' who recruited crews of migrant and seasonal
workers and moved them from job to job." Mendoza at 944.
The court goes on to say that, "these 'crew leaders' or 'crew
pushers' were regarded as the primary offenders against migrant
and seasonal workers, they were usually transient, and hard to
find . . ., and even harder to locate and control." [Cong. Rec.
cite in court's decision].
The Mendoza court was dealing with the registration
requirement of the MSPA and found that AGERs do not have to
register, even if they perform FLC activities, because they are
not transient and are not difficult to locate. The
complaint against Peters is not based upon a failure to register.
The Mendoza court's reasoning in exempting AGERs from the
FLC registration requirement does not logically extend to an
exemption for AGERs, when performing FLC activities, from all FLC
requirements. In fact, the Mendoza court specifically
noted that other [3] FLC requirements under the Act applied to
the vineyard management companies found to be exempt from
registration. Mendoza at 442.
Further, Defendant's position on this matter cannot
reasonably be considered to be analogous to the vineyard
management companies in Mendoza. The recruitment of
migrant workers in Mendoza was, "an incidental and
relatively minor aspect of the performance of [the defendant's]
overall function as operators of vineyards." Mendoza at
944. The Defendant in this case admits, via his own tax return,
to being a farm labor contractor who derived 67.5% of his total
income from his FLC business. R.O. at 4. In fact, the Defendant
actually registered as a FLC, thereby voluntarily subjecting
himself to the provisions of the Act.
For the reasons set forth above, I reject the summary
dismissal of this case. I agree with the Administrator's
contention that the ALJ erred in refusing to treat Defendant's
farming activities separately and distinctively from his
predominant labor contracting activities for the purpose of
assessing civil money penalties. I find a lack of support for
the conclusion that FLC penalty provisions are inapplicable to a
self described farm labor contractor, whose labor contracting
activities are independent, separate and clearly distinct from
his otherwise exempt farming activities.
Therefore, the recommended order is, hereby, VACATED,
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29 C.F.R. § 500.263, and the case is REMANDED for further
proceedings on the substantive issues presented.
SO ORDERED.
Secretary of Labor
Washington, D.C.
[ENDNOTES]
[1]
Prior to MSPA's adoption in January, 1983 (effective
April 14, 1983) the operative federal law in the area of migrant
and seasonal worker protection was the Farm Labor Contractor
Registration Act (FLCRA), 7 U.S.C. § 2041-2053. That Act
was repealed and replaced as the governing statute in the area by
the MSPA.
[2]
While the ultimate decisions on interpretations of the Act are
made by the courts, Mitchell v. Zachry, 362 U.S. 310
(1960), Kurchbaum v. Walling, 316 U.S. 517 (1942), on
those matters which have not been determined by the courts, it is
necessary for the Secretary of Labor and the Administrator to
reach conclusions as to the meaning and the application of
provisions of the law in order to carry out their administrative
and enforcement responsibilities. Skidmore v. Swift, 323
U.S. 134 (1944).
[3] The court did not specifically identify the section
applicable to this case. 29 U.S.C. § 1816.