Chao v. North Carolina Growers Ass'n, 5:99-CV-7-V.

• Decision Date: 04 September 2003
• Docket Number: No. 5:99-CV-7-V.,5:99-CV-7-V.
• Citation: 280 F.Supp.2d 500
• Court: U.S. District Court — Western District of North Carolina
• Parties: Elaine CHAO, Secretary of Labor, United States Department of Labor, Plaintiff, v. NORTH CAROLINA GROWERS ASSOCIATION, Sexton Tree Farms and Sexton Associates, Highland Fraser Firs, and New River Tree Co., as joint employers, Defendants.

280 F.Supp.2d 500

Elaine CHAO, Secretary of Labor, United States Department of Labor, Plaintiff, v. NORTH CAROLINA GROWERS ASSOCIATION, Sexton Tree Farms and Sexton Associates, Highland Fraser Firs, and New River Tree Co., as joint employers, Defendants.

No. 5:99-CV-7-V.

United States District Court, W.D. North Carolina. Statesville Division.

September 4, 2003.

COPYRIGHT MATERIAL OMITTED

Dana L. Ferguson, Channah S. Broyde, Atlanta, GA, for plaintiff.

W. R. Loftis, Constangy, Brooks & Smith, LLC, Winston-Salem, NC, Monte B. Lake, Robert E. Williams, Christine M. Cooper, McGuiness & Williams, Washington, DC, for defendants.

ORDER

VOORHEES, District Judge.

THIS MATTER is before the Court upon the parties' cross-motions for summary judgment. The critical issue in this case of first impression is whether Defendants' employees are "employed in agriculture" such that Defendants are exempt from paying overtime wages pursuant to the Fair Labor Standards Act (hereinafter "FLSA" or "the Act"), 29 U.S.C. § 201 et seq.¹

I. STANDARD OF REVIEW

Federal Rule of Civil Procedure 56(c) states that summary judgment may be granted where "the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law." See Anderson v. Liberty Lobby, 477 U.S. 242, 247-49, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 321, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). A genuine issue exists only if "the evidence is such that a reasonable jury could return a verdict for the non-moving party." Anderson, 477 U.S. at 248, 106 S.Ct. 2505. But the party opposing summary judgment may not rest upon mere allegations or denials, and a "mere scintilla of evidence" is insufficient to overcome summary judgment. Id. at 249-50, 106 S.Ct. 2505.

In considering motions for summary judgment, courts view the facts and inferences in the light most favorable to the party opposing the motion. Id. at 255, 106 S.Ct. 2505; Cole v. Cole, 633 F.2d 1083, 1089 (4th Cir.1980). Summary judgment, consequently, is proper where "the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there [being] no genuine issue for trial." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (internal quotations omitted).

II. BACKGROUND²

Defendants Sexton Tree Farms and Sexton Associates, Highland Fraser Firs, and New River Tree Company (hereinafter "Growers") grow Christmas trees for sale during the holiday season, and have done so from at least 1993 to the present. Because of the seasonal nature of Christmas tree planting, tending, and harvesting, Growers need a substantial number of workers at certain points during the year, but require fewer workers during other periods of the year. Due to the nature and seasonality of the work, it is very difficult for Growers to meet their labor needs with workers that are United States citizens. In order to meet their labor needs, Growers enlist the aid of Defendant North Carolina Growers' Association (hereinafter "NCGA"), which is a trade association to which Growers pay annual dues. NCGA arranges the hiring of temporary, unskilled, legal alien agricultural workers for Growers under a program called "H2A," which is administered by the Employment and Training Administration (hereinafter "ETA") of the Department of Labor (hereinafter "DOL"). The term "H2A" is derived from 8 U.S.C. § 1101(a)(15)(H)(ii)(a), which provides that

the term `immigrant' means every alien except an alien...having a residence in a foreign country which he has no intention of abandoning who is coming to the United States to perform agricultural labor or services, as defined by the Secretary of Labor in regulations and including agricultural labor defined in section 3121(g) of Title 26 and agriculture as defined in section 203(f) of Title 29, of a temporary or seasonal nature.³

In addition to the H2A program, the ETA also administers the "H2B" program, which covers alien workers that are in the United States to perform "other temporary service or labor." 8 U.S.C. § 1101(a)(15)(H)(ii)(b). The H2A and H2B programs, created by the DOL pursuant to the Immigration Reform and Control Act (hereinafter "IRCA"), contain various hiring requirements with which all employers must comply prior to hiring temporary alien laborers. The practical distinction between the two is that H2A prescribes an employer's treatment of agricultural workers, whereas H2B prescribes the treatment for nonagricultural workers.

After ensuring Growers' initial compliance with the H2A hiring requirements, NCGA continues to ensure that the workers hired are transported into the United States, housed, trained, supervised, paid, and transported out of the United States. While in the United States at Growers' Christmas tree farms during harvesting season, the H2A workers cut, bale, stack, and load Christmas trees. The H2A workers also plant and shear Christmas trees and apply fertilizer and pesticide where necessary.

At this point, it is important for the Court to point out that section 207(a)(1) of the FLSA requires that:

[e]xcept as otherwise provided in this section, no employer shall employ any of his employees who in any workweek is engaged in commerce...for a workweek longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed.

However, certain employees are exempt from this requirement. As relevant to the instant case, section 213(b)(12) provides that "any employee employed in agriculture" is exempt from the overtime requirement of section 207(a)(1). For purposes of section 213(b)(12), agriculture is defined as:

farming in all its branches and among other things includes the cultivation and tillage of the soil, dairying, the production cultivation, growing, and harvesting of any agricultural or horticultural commodities ...and any practices (including forestry or lumbering operations) performed by a farmer or on a farm as an incident to or in conjunction with such farming operations.

29 U.S.C. § 203(f). Thus, where workers are "employed in agriculture," an employer need not pay that employee overtime because the employee is exempt from the overtime requirement of the FLSA. However, if an employee is engaged in employment activities which are not "agricultural" as defined by the FLSA, an employer must pay that employee overtime pursuant to section 207(a)(1) of the Act.⁴ The Employment Standards Administration, Wage and Hour Division (hereinafter "WHA"), a division of DOL, is the agency responsible for enforcing the FLSA with respect to the payment of overtime wages.

When Growers initially enlisted the aid of the NCGA in 1993, ETA informed NCGA that Growers were required to treat their workers as nonagricultural H2B workers for purposes of complying with DOL regulations. As an incident to its workers being labeled "nonagricultural" by ETA for purposes of IRCA, NCGA and Growers held the belief that their workers were required to be paid overtime under the FLSA, as they were not "employed in agriculture" so as to be exempt from the overtime requirement of from section 207(a)(1). Thus, from 1993 to 1995, Growers paid their workers overtime pursuant to the FLSA.

However, in the winter of 1995 ETA revised its position, concluding that the workers enlisted by Growers actually fell into the H2A "agricultural" classification for IRCA, even though they might not be considered "agricultural" for purposes of other regulations and statutes.⁵ As a result of this reclassification of their workers, Growers took the position that their workers were also "agricultural" for purposes of the FLSA. Thus, Growers concluded, they were no longer required to pay overtime wages to their employees because the employees were exempt from section 207(a)(1) of the FLSA. Beginning in 1996, Growers discontinued paying their workers overtime for weeks in which they worked more than 40 hours.

In November 1996, WHA notified NCGA and Growers that while their workers were classified as "agricultural" for purposes of IRCA, their workers did not qualify as "employed in agriculture" for purposes of exemption from the overtime requirement of the FLSA. According to the WHA, the classification of the workers as "agricultural" under IRCA was based on the definition of "agriculture" contained in 8 U.S.C. § 1101(a)(15)(H)(ii)(a), which relies on either the FLSA definition or the definition contained in section 3121(g) of the Internal Revenue Code. Thus, the WHA informed Growers, the definition of "agriculture" contained in IRCA was not the same definition of agriculture contained in the FLSA, and the WHA was not bound by the ETA's classification under IRCA. As to its interpretation of the FLSA definition of "agriculture," the WHA contended that Christmas tree workers had been consistently treated as "forestry and lumber" workers that were not exempt from the requirements of the FLSA's overtime provision. Defendants disagreed with the WHA interpretation and refused to pay their workers overtime under the FLSA, maintaining that their workers were exempt from the overtime requirements of the Act because the were "employed in agriculture" within the meaning of that term as defined by the Act.

As a result of Defendants' refusal to acquiesce to DOL's interpretation of the Act, the instant enforcement action was filed by Plaintiff seeking payment of back wages plus interest and seeking to permanently enjoin all Defendants from engaging in any future violations of the Act.

III. LAW AND ANALYSIS

The issue for resolution in this case is whether workers engaged exclusively in the planting, nurturing, and...