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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 

[PAGE 2] 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
[PAGE 3] 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
[PAGE 4] 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
[PAGE 5] 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
[PAGE 6] 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,
[PAGE 7] 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.



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