Reich v. Tiller Helicopter Services, Inc.

Decision Date10 December 1993
Docket NumberNo. 92,7368,92,7368
Parties, 127 Lab.Cas. P 33,047, 1 Wage & Hour Cas.2d (BNA) 1241 Robert B. REICH, Secretary of Labor, United States Department of Labor, Plaintiff-Appellant, v. TILLER HELICOPTER SERVICES, INC. and William J. Tiller, Sr., Defendants-Appellees.
CourtU.S. Court of Appeals — Fifth Circuit

Lois R. Zuckerman, William J. Stone, Appellate Litigation, Fair Labor Standards Div., Office of U.S. Dept. of Labor, Washington, DC, for plaintiff-appellant.

Michael L. Holland, Ben F. Foster, Jr., San Antonio, TX, for defendants-appellees.

C.C. Small, Jr., Ed Small, Small, Craig & Werkenthin, Austin, TX, for amicus curiae TX & Southwestern Cattle Raisers Assoc.

John J. Rademacher, Michael Stientjes, Park Ridge, IL, for amici curiae Am. Farm Bureau Fed. and TX Farm Bureau.

Appeal from the United States District Court for the Southern District of Texas.

Before REAVLEY and GARWOOD, Circuit Judges, and LAKE, * District Judge.

SIM LAKE, District Judge:

The Secretary of Labor appeals the rulings of the district court following a bench trial (1) that certain work of employees of Tiller Helicopter Services, Inc., was exempt agricultural work under the Fair Labor Standards Act (FLSA), (2) that the Secretary's failure to pursue trial by jury precluded the court from awarding liquidated damages, and (3) that Appellees' violations of the Fair Labor Standards Act were not willful. We AFFIRM.

I. Background

William J. Tiller, Sr., owns and manages several thousand acres of non-contiguous farm and ranch land in south Texas. He also owns and operates Tiller Helicopter Services, Inc. (Tiller Helicopter), a company headquartered on his farm located near Alice, Texas. Tiller Helicopter owns and operates six or seven helicopters that are used to dust lawns, herd cattle, and spray herbicides, insecticides, and fertilizers on crops for Tiller and approximately 200 client farmers. Although most of Tiller Helicopter's clients are located in south Texas, some are located as far east as Beaumont, Texas, and as far west as Marfa, Texas.

The trial record shows that a typical day for Tiller Helicopter employees begins at the Tiller farm, where helicopters are loaded onto trailers. Tiller Helicopter employees then fill the fuel and water tanks on the trailers, load unmixed chemicals onto the trailers, and transport the trailers in caravans of two or three vehicles to farms of clients who have contracted for aerial spraying services. Upon arrival at a client's farm, Tiller Helicopter employees measure and mix the chemicals with water, load the mixtures onto the helicopters, and ready the helicopters for spraying. During spraying operations some employees serve as flagmen to guide the helicopter pilots. Upon completion of a spraying operation, employees either return to Tiller Helicopter headquarters or travel to another client's farm to perform additional spraying operations. At the end of the day employees return to Tiller Helicopter headquarters where they flush the chemical tanks on the trailers and park, clean, fuel, and decontaminate the helicopters in preparation for the next day's operations. Occasionally the amount of time spent traveling to and from a client's farm exceeds the time spent performing spraying operations on the client's farm. In addition to these daily duties, employees also clean and maintain trailers and sometimes maintain helicopters at Tiller Helicopter's headquarters.

On December 21, 1988, the Secretary 1 filed suit against Tiller Helicopter and its principal officers, William J. Tiller, Sr., Martha J. Tiller, and William J. Tiller, Jr., 2 under the FLSA on behalf of four Tiller Helicopter employees: Jose Luis Davila, Tito Gonzales, Joe Pena, and Ray Solis. The Secretary's complaint alleged that since January 1, 1985 Appellees had violated the FLSA by paying these employees less than the minimum hourly rates required by the FLSA, by employing them for more than 40 hours a week without compensating them at the FLSA's overtime rate, and by failing to make, keep, and preserve adequate records showing the hours worked each day and the total hours worked each week by each employee. The Secretary alleged that these violations of the FLSA were willful. The Secretary's Complaint asserted jurisdiction under 28 U.S.C. § 1345 and § 17 of the FLSA, 29 U.S.C. § 217, and requested a judgment permanently enjoining Appellees from violating the FLSA and "restraining the withholding of payment of minimum wages and overtime compensation found by the court to be due employees under the Act" together with prejudgment and post-judgment interest and "such other and further relief as may be necessary and appropriate, including an additional amount as liquidated damages equal to the back wages found to be due to the employees named in attached Exhibit "A" in accordance with Section 16(c) of the Act [29 U.S.C. § 216(c) ] and costs of this action." (ROA 866-867)

After a two-day bench trial the district court found that loading trailers and tanks at Tiller Helicopter headquarters, traveling to and from job sites, and "simple flushing of the tanks on the trailers" upon return to Tiller Helicopter headquarters was exempt from overtime wages under the FLSA, but that cleaning and maintaining the trailers and helicopters was not exempt work. Martin v. Tiller Helicopter Services, Inc., 778 F.Supp. 1395, 1398-1399 (S.D.Tex.1991). The court rejected the Secretary's demand for liquidated damages after concluding that the Secretary's failure to pursue trial by jury deprived the court of the power to award liquidated damages. The court also rejected the Secretary's argument that Appellees' violations of the FLSA were willful. (The FLSA provides a two-year statute of limitations. If the cause of action arises from a "willful violation," however, a three-year limitations period applies. 29 U.S.C. § 255(a).) The court enjoined Appellees from committing further violations of the minimum wage, overtime, and record-keeping provisions of the FLSA and from withholding unpaid back wages related to non-exempt work and ordered Appellees to pay back wages based on the application of a two-year statute of limitations, together with prejudgment interest, post-judgment interest, and costs. Id. at 1399-1401.

The district court's rulings as to the scope of the agricultural exemption to the FLSA and the court's inability to award liquidated damages following a bench trial are conclusions of law that this court reviews de novo. Skipper v. Superior Dairies, Inc., 512 F.2d 409, 413 (5th Cir.1975). The district court's determination that Appellees' conduct was not willful is a finding of fact not to be set aside unless found to be "clearly erroneous." Fed.R.Civ.P. 52(a); Cox v. Brookshire Grocery Co., 919 F.2d 354, 356 (5th Cir.1990); Mireles v. Frio Foods, Inc., 899 F.2d 1407, 1415 (5th Cir.1990).

Although this court has previously addressed the FLSA's agricultural exemption and the remedies available to the Secretary in an FLSA action, the parties' arguments require that we plow this ground again, and perhaps more deeply than necessary, in the hope that a thorough explanation of how we arrive at our decisions may pretermit similar arguments in future cases.

II. The FLSA's Agricultural Exemption

The Secretary argues that the district court erred in holding that loading trailers and tanks at Tiller Helicopter headquarters for spraying operations, traveling to and from work sites, and flushing the tanks on the trailers upon return to Tiller Helicopter headquarters was exempt work within the meaning of the FLSA because the court's holding effectively eliminates the statutory requirement that agriculturally exempt work be performed "by a farmer or on a farm." 29 U.S.C. § 203(f). Appellees argue that these necessary and incidental agricultural support activities fall within the agricultural exemption to the FLSA because both Mr. Tiller and Tiller Helicopter are farmers performing work on a farm. An understanding of the parties' arguments and our resolution of them requires an appreciation of the legislative history of the agricultural exemption and its evolution through case law and regulations.

In 1938 Congress enacted the FLSA as a means of regulating minimum wages, maximum working hours, and child labor in industries that affected interstate commerce. 29 U.S.C. § 202; 81 Cong.Rec. 7648 (1937). As originally enacted the FLSA exempted agricultural workers from both its minimum wage and maximum hour provisions. 29 U.S.C. § 213(a)(6) (1938). Although with few exceptions the exemption of agricultural workers from the Act's minimum wage protection ended with the 1966 amendments to the Act, agricultural workers are still exempted from the FLSA's maximum hour, or overtime, provisions. 29 U.S.C. § 213(b)(12) states:

(b) The provisions of section 207 [maximum hours] of this title shall not apply with respect to--

. . . . .

(12) any employee employed in agriculture or in connection with the operation or maintenance of ditches, canals, reservoirs, or waterways, not owned or operated for profit, or operated on a sharecrop basis, and which are used exclusively for supply and storing of water for agricultural purposes.

The dispute here is whether the Tiller Helicopter employees were "employed in agriculture" with regard to those activities found to be exempt by the district court.

A. Development of the Agricultural Exemption

The sponsor of the bill that was ultimately enacted as the FLSA, Senator Black of Alabama, clearly and unambiguously described the broad reach intended by the FLSA's agricultural exemption.

The bill specifically and unequivocally excludes certain industries and certain types of business from its scope and effect. It specifically excludes workers in agriculture of all kinds and of all types. There is contained in the measure, perhaps, the most comprehensive definition of agriculture which has been...

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