735 F.3d 892 (9th Cir. 2013), 11-17365, Rivera v. Peri & Sons Farms, Inc.

Docket Nº:11-17365.
Citation:735 F.3d 892
Opinion Judge:O'SCANNLAIN, Circuit Judge:
Party Name:Victor Rivera RIVERA; Ernesto Sebastian Castillo Rios; Vicente Cornejo Lugo; Jesus Garcia Mata; Luis Angel Garcia Mata; Gaudencio Garcia Rios; Simon Garcia Rios; Vicente Cornejo Cruz; Emilio Montoya Morales; Jorge Luis Aguilar Solano; Domingo Ramos Rios; Artemio Rincon Cruz; Sergio Rios Ramos; Pedro Rivera Camacho; Regulo Rincon Cruz; Aureliano Mon
Attorney:Jos
Judge Panel:Before: DIARMUID F. O'SCANNLAIN and MILAN D. SMITH, JR., Circuit Judges, and JAMES K. SINGLETON, Senior District Judge.[*]
Case Date:November 13, 2013
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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735 F.3d 892 (9th Cir. 2013)

Victor Rivera RIVERA; Ernesto Sebastian Castillo Rios; Vicente Cornejo Lugo; Jesus Garcia Mata; Luis Angel Garcia Mata; Gaudencio Garcia Rios; Simon Garcia Rios; Vicente Cornejo Cruz; Emilio Montoya Morales; Jorge Luis Aguilar Solano; Domingo Ramos Rios; Artemio Rincon Cruz; Sergio Rios Ramos; Pedro Rivera Camacho; Regulo Rincon Cruz; Aureliano Montes Montes; Manuel Rivera Rivera; Martin Flores Bravo; Virgilio Marquez Lara; Jose Balderas Guerrero; Gerardo Rios Ramos, Plaintiffs-Appellants,

v.

PERI & SONSFARMS, INC., Defendant-Appellee.

No. 11-17365.

United States Court of Appeals, Ninth Circuit.

November 13, 2013

Argued and Submitted June 14, 2013.

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[Copyrighted Material Omitted]

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José Jorge Behar, Chicago, IL, argued the cause and filed the briefs for the plaintiffs-appellants. With him on the briefs were Matthew J. Piers, Chicago, IL, and Mark R. Thierman, Reno, NV.

Brad Johnston, Yerington, NV, argued the cause for the defendant-appellee. Gregory A. Eurich, Denver, CO, and Joseph Neguese, Denver, CO, filed the brief for the defendant-appellee.

Diane A. Heim, Washington, D.C., argued the cause and filed the brief for Amicus Curiae Secretary of Labor, in support of the plaintiffs-appellants. With her on the briefs were M. Patricia Smith, Washington, D.C., Jennifer S. Brand, Washington, D.C., and Paul L. Frieden, Washington, D.C.

Monte B. Lake, Washington, D.C., filed the brief for Amicus Curiae National Council of Agricultural Employers, in support of the defendant-appellee.

Appeal from the United States District Court for the District of Nevada, Robert Clive Jones, Chief District Judge, Presiding. D.C. No. 3:11-cv-00118-RCJ-VPC.

Before: DIARMUID F. O'SCANNLAIN and MILAN D. SMITH, JR., Circuit Judges, and JAMES K. SINGLETON, Senior District Judge.[*]

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OPINION

O'SCANNLAIN, Circuit Judge:

We are asked to decide claims of Mexican temporary farmworkers under the Fair Labor Standards Act and relevant state law.

I

A

Peri & Sons is a Nevada corporation that produces, harvests, and packages onions.1 The plaintiffs are Victor Rivera Rivera and twenty-three other Mexican citizens (" the farmworkers" ) admitted to the United States to cultivate, harvest, and process onions on Peri & Sons' farm. Since 2004, Peri & Sons has hired such foreign workers through the H-2A program of the United States Department of Labor (DOL).

American agricultural employers may hire aliens for temporary labor under the H-2A program if the DOL certifies that:

(A) there are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services involved in the petition, and

(B) the employment of the alien in such labor or services will not adversely affect the wages and working conditions of workers in the United States similarly employed.

8 U.S.C. § 1188(a)(1). Before submitting an Application for Temporary Employment Certification, see 20 C.F.R. § 655.130, an " employer must submit a job order," id. § 655.121(a)(1). Job orders must comply with various requirements relating to the terms of employment. See, e.g., id. § 655.122.

The farmworkers incurred expenses related to their employment with Peri & Sons. Some had to pay a hiring or recruitment fee of between $100 and $500 to Peri & Sons' employees in order to be considered for employment. All had to obtain H-2A visas from the United States Consulate in Hermosillo, Sonora, Mexico. Each farmworker paid the necessary fees and covered his own lodging costs in Hermosillo. The farmworkers also paid a fee to obtain Form I-94 from the United States Citizenship and Immigration Services upon entering the country. These immigration and travel expenses exceeded $400 for each plaintiff. In addition, the farmworkers purchased protective gloves, which were required for the performance of their jobs, at a cost of at least $10 per week. They each also incurred expenses of at least $100 in traveling from Peri & Sons' farm in Nevada back to their homes in Mexico.

The farmworkers claim that these expenses were primarily for Peri & Sons' benefit but that the company did not properly reimburse them.

B

The farmworkers filed their original complaint on February 16, 2011. The operative complaint for this appeal, however, is the Second Amended Complaint (SAC), which contained four counts. First, the SAC alleged that Peri & Sons violated the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq., partially because it failed to reimburse each farmworker during his first week of employment for travel and immigration expenses. Second, it

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claimed that Peri & Sons breached its employment contracts by violating the terms of the job orders submitted to the DOL. Third, it alleged violations of Nevada wage-and-hour laws for failure to pay the minimum wage and failure to pay wages owed under employment contracts. Fourth, it asserted violations of the minimum wage requirement in the Nevada Constitution.

The district court dismissed the SAC with prejudice. It rejected the farmworkers' FLSA claims on the ground that 29 C.F.R. § 531.35 did not treat the relevant expenses as kickbacks. The district court dismissed the breach of contract claims because the farmworkers did not plead specific violations of the contracts beyond reiterating the wage claims. As to the state law statutory and constitutional claims, the district court treated them as " redundant" and dismissed both for the same reason it dismissed the FLSA claims. It also applied a two-year statute of limitations to the wage claims, both state and federal, holding that those having accrued before February 16, 2009 were barred. The farmworkers timely appealed.

II

A

Both the specific regulations governing the H-2A program and the more general FLSA regulations promulgated by the DOL control whether and when employers must reimburse employees for inbound travel and immigration expenses. The parties agree that Peri & Sons' relationship with the farmworkers is subject to the H-2A regulations but dispute whether it is subject to the FLSA regulations.

Regulations concerning the H-2A program require employers to reimburse an employee who " completes 50 percent of the work contract period ... for reasonable costs incurred by the worker for transportation and daily subsistence from the place from which the worker has come to work for the employer ... to the place of employment." 20 C.F.R. § 655.122(h)(1). Peri & Sons argues that this regulation only obligated it to reimburse its employees' travel expenses after the employees had completed half of their work rather than during each employees' first week.

The FLSA, on the other hand, requires that employers reimburse certain expenses during each employee's first week of work. See 29 C.F.R. § 531.36 (applying the rule to " any such workweek" ). The farmworkers argue that this FLSA regulation required Peri & Sons to reimburse them for immigration and travel expenses during the first week of work. Peri & Sons argues that it is not subject to this FLSA regulation because applying the FLSA regulation to H-2A employees would, as a practical matter, make the H-2A regulation superfluous. Peri & Sons also contends that deducting travel costs would frequently reduce a worker's first week's wages far below the minimum wage.

We must evaluate such arguments in light of the DOL's regulatory interpretation. A DOL regulation has clarified " that the FLSA applies independently of the H-2A requirements and imposes obligations on employers regarding payment of wages." 20 C.F.R. § 655.122(h)(1); accord id. § 655.122(p)(1) (" [An] employer must make all deductions from the worker's paycheck required by law." ). Before issuing its regulation, the DOL had rejected many of the specific arguments raised here by Peri & Sons. See Temporary Agricultural Employment of H-2A Aliens in the United States, 75 Fed.Reg. 6884, 6915 (Feb. 12, 2010). Under Chevron, U.S.A., Inc. v. NRDC, Inc., 467 U.S. 837, 843-44, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), we

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must defer to the DOL's interpretation if: (1) the statutory provision is ambiguous, and (2) the agency's interpretation is reasonable.

The FLSA certainly does not unambiguously exempt H2A employers from its requirements and related regulations. See 29 U.S.C. § 206 (requiring " [e]very employer" to pay the minimum wage to covered employees); id. § 213 (providing exemptions not relevant to Peri & Sons). Thus, the FLSA either unambiguously applies the reimbursement requirement to H-2A employers or contains an ambiguity on this point. Assuming without deciding that the statute is ambiguous, the DOL's interpretation is reasonable. Because the DOL's interpretation neither makes it impossible to comply with both provisions nor creates surplusage,2 it is " a permissible construction of the statute." Chevron, 467 U.S. at 843, 104 S.Ct. 2778.

B

Because Peri & Sons is subject to the FLSA reimbursement regulations, we must next decide whether the travel and immigration expenses incurred by the farmworkers are covered by such regulations.

The FLSA requires employers to pay at least the federal minimum wage to each employee " engaged in commerce." 29 U.S.C. § 206(a)(1). An employer has not satisfied the minimum wage requirement unless the compensation is " free and clear," meaning the employee has not kicked back part of the compensation to the employer. 29 C.F.R. § 531.35. Thus, employers generally may not issue paychecks at the minimum wage rate and then require employees to give some of the money back. An employer may charge its employees for the reasonable cost of providing them " board, lodging, or other facilities" because such charges are not kickbacks, meaning they can be included in the wage calculation. 29 U.S.C. § 203(m). Facilities " primarily for the benefit or...

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