Bobadilla–german v. Bear Creek Orchards Inc.
| Decision Date | 12 April 2011 |
| Docket Number | Nos. 10–35205,10–35268.,s. 10–35205 |
| Citation | 641 F.3d 391,17 Wage & Hour Cas.2d (BNA) 833 |
| Parties | Elias BOBADILLA–GERMAN; Jacobo Bobadilla–German; Vicente Fimbres Romero; Mauro German–Sanchez; Gilberto Padilla–Ortiz; Victor Villanueva–Hernandez; Dario Angel Villegas–Meza, Plaintiffs–Appellants,andJose De Jesus Gaeta Bautista; Benjamin Urbalejo–Rodriguez, Plaintiffs,v.BEAR CREEK ORCHARDS, INC., a Delaware corporation, Defendant–Appellee.Elias Bobadilla–German; Jacobo Bobadilla–German; Vicente Fimbres Romero; Mauro German–Sanchez; Gilberto Padilla–Ortiz; Victor Villanueva–Hernandez; Dario Angel Villegas–Meza, Plaintiffs–Appellees,v.Bear Creek Orchards, Inc., a Delaware corporation, Defendant–Appellant. |
| Court | U.S. Court of Appeals — Ninth Circuit |
OPINION TEXT STARTS HERE
Mark J. Wilk, Oregon Law Center, Woodburn, OR, for the plaintiffs-appellants/cross-appellees.Brenda K. Baumgart, Barran Liebman LLP, Portland, OR, for the defendant-appellee/cross-appellant.Denise G. Fjordbeck, Assistant Attorney General, Appellate Division, Office of the Oregon Attorney General, Salem, OR, for the amicus curiae.Appeals from the United States District Court for the District of Oregon, Owen M. Panner, Senior District Judge, Presiding. D.C. No. 1:07–cv–03058–PA.Before: SIDNEY R. THOMAS and SUSAN P. GRABER, Circuit Judges, and JAMES V. SELNA,* District Judge.*
In these appeals, we consider whether certain on-site housing costs of seasonal farm workers can be credited toward the minimum wage set by Oregon statute. Under the circumstances presented by this case, we conclude that they may not. We also conclude that the workers in this case were entitled to be paid on the last workday, rather than the following day.
Bear Creek Orchards, Inc., operates peach and pear orchards in Medford, Oregon. It hires seasonal workers to pick the orchards over the course of a month-long harvest. Bear Creek typically hires about 50 workers to pick peaches and 300 to pick pears.
In recent years, at least three-fourths of Bear Creek's seasonal workers have been recruited from the San Luis, Arizona, area. Once recruited, these workers traveled from their permanent homes in Arizona to Oregon for the month-long harvest.
As part of their compensation, workers were offered optional on-site housing and meals. Bear Creek charged between five and seven dollars a day for housing and deducted this amount from the workers' paychecks and credited it toward their minimum wage. The company, though, deducted housing costs from a worker's paycheck only if he or she completed a deduction-authorization form. In many instances, if housing costs were not credited toward the workers' minimum wage, their wage would have been below the lawful minimum wage.
During the 2004–2006 harvests, workers were generally given their final paychecks on the morning after their last day of work.
Several workers filed a class-action lawsuit against Bear Creek. The class, represented by 12 named plaintiffs, alleged violations of the Migrant and Seasonal Agricultural Worker Protection Act, 29 U.S.C. §§ 1801–1872, as well as Oregon's minimum wage laws.1 Several plaintiffs, suing individually, also claimed that Bear Creek violated Oregon law by failing to pay their wages when due after their employment ended. The district court held a bench trial and issued its Findings of Fact and Conclusions of Law.
The district court ruled in favor of the workers on some claims and in favor of Bear Creek on others. The workers appeal only one claim. They argue that Bear Creek violated Oregon's minimum wage laws by crediting on-site housing costs toward the workers' minimum wage. The district court disagreed, concluding that Bear Creek lawfully credited the costs because on-site housing was optional and was provided for the workers' private benefit. The workers argue on appeal that the district court misapplied Oregon state law in reaching this conclusion.
Bear Creek cross-appeals on a different claim. The district court concluded that Bear Creek violated Oregon law by paying its workers the day after their last workday. Under Oregon law, the court concluded, employers must pay seasonal farm workers on the last workday. The district court awarded the individual plaintiffs one day's pay as damages. Bear Creek argues on appeal that the district court misapplied Oregon state law in reaching this conclusion.
The district court had jurisdiction over the workers' federal claims under 29 U.S.C. § 1854. It had supplemental jurisdiction over the state-law claims under 28 U.S.C. § 1367. We have jurisdiction over the appeals under 28 U.S.C. § 1291.
Following a bench trial, we “review[ ] the district court's findings of fact for clear error and its conclusions of law de novo.” United States v. Bell, 602 F.3d 1074, 1079 (9th Cir.2010) (citing Crockett & Myers, Ltd. v. Napier, Fitzgerald & Kirby, LLP, 583 F.3d 1232, 1236 (9th Cir.2009)), cert. denied, ––– U.S. ––––, 131 S.Ct. 653, 178 L.Ed.2d 481 (2010).
The district court erred when it concluded that Bear Creek lawfully credited on-site housing costs toward the workers' minimum wage. The district court properly concluded that Bear Creek violated Oregon law by paying its workers the day after their last workday.
A
Oregon law allows employers to deduct from a worker's minimum wage the “fair market value of lodging, meals or other facilities or services furnished by the employer for the private benefit of the employee.” Or.Rev.Stat. § 653.035(1) (emphasis added). “Private benefit” is defined in Oregon's Administrative Rules:
Lodging or other facilities or services are furnished for the private benefit of the employee when such lodging or other facilities or services are not required by the employer. For purposes of this rule, lodging or other facilities or services are required by the employer when:
(a) Acceptance of the lodging or other facilities is a condition of the employee's employment; or
(b) The expense is incurred by an employee who must travel away from the employee's home on the employer's business; or
(c) The acceptance of the lodging or other facilities or services is involuntary or coerced; or
(d) The provision of lodging or other facilities or services is necessary in order for the employer to maintain an adequate work force at the times and locations the employer needs them.
Or. Admin. R. 839–020–0025(7).
The district court concluded that none of the four subsections applied and, as a result, the on-site housing was provided to the workers for their private benefit and could be credited toward their minimum wage. In particular, it concluded subsection (b) did not apply because the workers were not “traveling salesmen temporarily away from home on their employer's business.” And it concluded subsection (d) did not apply because it applies only to “situations where an ‘on call’ employee must reside at employer-furnished housing.” We hold that subsection (d) applies here; we therefore need not address the district court's determination with respect to subsection (b).
As the workers and the State of Oregon (as amicus) argue on appeal, subsection (d) applies here because Bear Creek would not have been able to maintain its workforce in the absence of on-site housing. The district court concluded subsection (d) applies only to on-call workers (e.g., hotel attendants), but the court did not provide any justification for why subsection (d) should be read more narrowly than its plain text. Under the plain text of subsection (d), a court must simply ask the question—Without the furnished housing, would the employer be able “to maintain an adequate work force at the times and locations the employer needs them”? Or. Admin. R. 839–020–0025(7)(d).
The district court found that Bear Creek's on-site housing “facilitate [s] recruitment of migrant harvest workers” and that “Bear Creek ... benefits in a variety of ways by offering employee housing.” But, more than that, the record establishes that Bear Creek would not be able to “maintain an adequate work force at the times and locations [Bear Creek needed] them.” Or. Admin. R. 839–020–0025(7)(d). Indeed, nearly all of the workers lived in the on-site housing.
Bear Creek's recruiter for 2006, Gumercindo Iboa, stated that Bear Creek would not be able to acquire the requisite labor force if it did not offer housing:
And Benny Suarez, Jr., the supervisor in charge of Bear Creek's farm labor camps remarked, “[T]he majority of the [workers] ... would say if it wasn't for housing, they wouldn't come back.” According to a residential landlord in the Medford area, who owns approximately 100 residential units, the rental and hotel market in Medford would probably not accommodate the 350 or so workers.
In addition to allowing Bear Creek to marshal enough employees, on-site housing ensures that workers will be ready to pick peaches or pears in the morning. As Suarez testified at trial, “It's a benefit for the employer to have them ready to go to work.” In his deposition, he explained:
Q: What did you understand to be the benefit that Bear Creek Orchards receives from having workers live in...
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