Gaxiola v. Williams Seafood of Arapahoe Inc., 4:08–CV–134–H(3).

Decision Date01 March 2011
Docket NumberNo. 4:08–CV–134–H(3).,4:08–CV–134–H(3).
Citation17 Wage & Hour Cas.2d (BNA) 1000,776 F.Supp.2d 117
CourtU.S. District Court — Eastern District of North Carolina
PartiesSilvia Rubio GAXIOLA and all others similarly situated, Plaintiffs,v.WILLIAMS SEAFOOD OF ARAPAHOE, INC. and Sherre L. Midyette, Defendants.


Clermont Lee Fraser, Raleigh, NC, for Plaintiffs.Robert J. McAfee, McAfee Law, P.A., New Bern, NC, for Defendants.


MALCOLM J. HOWARD, Senior District Judge.

This matter is before the court on plaintiffs' motion for partial summary judgment, defendants' motion for partial summary judgment, and plaintiff Silvia Rubio Gaxiola's (Gaxiola) motion for class certification of the claims brought pursuant to the North Carolina Wage and Hour Act, N.C. Gen. Stat. §§ 95–25.1 et seq. Appropriate responses and replies have been filed, and the time for further filings has expired. These matters are ripe for adjudication.


This is an action alleging claims under the Fair Labor Standards Act, 29 U.S.C. §§ 201 et seq. (“FLSA”) and the North Carolina Wage and Hour Act, N.C. Gen.Stat. §§ 95–25.1 et seq. (“NCWHA”). Gaxiola is a former employee of defendants who was recruited in Mexico to work as a crab picker at defendants' seafood processing facility in Arapahoe, North Carolina. Gaxiola alleges that she and other individuals employed by defendants on H–2B guestworker visas from 2005 through 2008 were not paid minimum wage for all hours worked in violation of the FLSA. Specifically, Gaxiola alleges: (1) that she and other employees were paid on a piece-rate basis (by weight of crab picked) even when the weekly pay earned through a piece rate was less than the minimum wage mandated by federal law; and (2) that defendants reduced her wages and the wages of her coworkers below minimum wage by deducting from their paychecks costs incurred for the benefit of defendants, such as visa, transportation and border crossing expenses. Additionally, Gaxiola brings a claim pursuant to NCWHA alleging defendants failed to pay plaintiff and members of the proposed NCWHA class at least he promised wage each week in which they performed work for defendants. Gaxiola alleges that defendants also violated NCWHA by making unauthorized deductions from her pay and the pay of the proposed plaintiff class members for transportation, visa and border crossing expenses.

This court granted Gaxiola's motion for conditional class certification of the FLSA claims on June 17, 2009. All discovery has been completed in this matter. Plaintiff now also seeks certification of a class under Rule 23 of the Federal Rules of Civil Procedure.


Plaintiff class members were employed by defendants pursuant to the H–2B visa program, which allows the temporary employment of foreign workers. 1 See 8 U.S.C. § 1184(c); 8 C.F.R. § 214.2(h). The terms of the H–2B visa program are controlled by statute, 8 U.S.C. § 1101(a)(15)(H)(ii)(b), as well as by United States Department of Labor (“USDOL”) regulations applicable to the temporary labor certification process, 20 C.F.R. § 655.0 et seq. and 8 C.F.R. § 214.2. On December 19, 2008, USDOL published new regulations governing the H–2B program.2 See Labor Certification Process and Employment for H–2B and Other Technical Changes, 73 Fed. Reg. 78020 (Dec. 19, 2008). Both the previous and the new H–2B regulations require the Secretary of Labor to make two overarching determinations before allowing an employer to employ H–2B workers:

(i) Whether U.S. workers are available to perform temporary employment in the United States, for which an employer desires to employ nonimmigrant foreign workers, and

(ii) whether the employment of aliens for such temporary work will adversely affect the wages or working conditions of similarly employed U.S. workers.

20 C.F.R. § 655.0(a)(1) (2007) (now 20 C.F.R. § 655.32(b)). Employers must pay H–2B workers the highest of the following rates: the prevailing wage as determined by the USDOL, federal minimum wage, the applicable state minimum wage, or the applicable local minimum wage. The prevailing wage is the wage necessary to protect against adversely affecting U.S. workers.

In 2005, 2006 and 2007 defendants sought permission to import foreign labor to work as crab pickers in their seafood processing plant by filing temporary labor certification applications (“Clearance Orders”) with USDOL. ( See Answer ¶ 15 [DE # 13].) The Clearance Orders were prepared, signed and submitted by defendant Midyette. (Clearance Orders


# 39–6, # 39–7, # 39–8].) On each Clearance Order, defendants indicated the number of workers needed, the period of employment, the type of work, and the terms and conditions of work being offered by defendants. ( Id.) The Clearance Orders indicated that the H–2B workers would work 35 hours per week plus varying overtime; that the regular work schedule would be 7:00 am until 4:00 pm; that job duties would include hand picking meat from the bodies and claws of crabs and placing the meat in a cup; and that the basic rate of pay based on the prevailing wage would be $5.17 per hour in 2005 and 2006, and $6.17 per hour in 2007. ( Id.) USDOL approved the terms of the work in the Clearance Orders and certified defendants to employ foreign workers through the H–2B visa program. (Answer ¶ 19.)

Once an employer receives temporary labor certification from USDOL, the employer may then petition United States Customs and Immigration Services for the actual visas. Each individual who is going to work pursuant to the certification must go to the United States Consulate in his home country to apply for and receive his visa. H–2B visas issued to workers are valid only for the specific job described in the employer's Clearance Order. 20 C.F.R. § 655.34(b). Upon completion of the work period described in the Clearance Order or upon separation from work, the worker is required to return to his home country. 20 C.F.R. § 655.35(a).

During the time period relevant to the instant matter, defendants relied on returning workers and word of mouth to fill job openings each year. Two of defendants' H–2B employees, Alba Gloria Acosta and Amado Segura, along with their daughter, acted on behalf of defendants while in Mexico by communicating with new and returning workers and making arrangements for those workers. (Midyette Dep. at 20.3) Defendant Midyette made visa interview appointments for the workers and then notified them of their appointments. (Midyette Dep. at 24.) Acosta and Segura made arrangements for the workers to travel together to their visa interviews as well as from their homes in Mexico to Arizona. (Midyette Dep. at 19, 23; Gaxiola Decl. ¶ 2.)

Defendants loaned money to Gaxiola as well as some other H–2B workers to cover some of their travel costs and visa expenses. (Midyette Dep. at 57, 58; Gaxiola Decl. ¶ 2.) Additionally, defendants purchased airline tickets for the named plaintiff and all of the other H–2B workers to fly from Arizona to North Carolina. (Midyette Dep. at 9.)

Defendants recovered the cost of the flights and the money advanced to workers to cover the other H–2B related expenses primarily through payroll deductions. (Midyette Dep. at 58, 62; Gaxiola Decl. ¶ 4.) Defendants never received written authorization to make those deductions. (Answer ¶¶ 37 and 43.)

Defendants did not advance money to all their employees to cover these expenses; some of the workers paid all of these costs except for their airline tickets. (Midyette Dep. at 61.) These workers were not reimbursed for the visa, border crossing or transportation expenses that they paid themselves. ( See DE # 39–12.)


I. Summary JudgmentA. Standard of Review

Summary judgment is appropriate pursuant to Fed.R.Civ.P. 56 when no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The party seeking summary judgment bears the initial burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

Once the moving party has met its burden, the non-moving party may not rest on the allegations or denials in its pleading, Anderson, 477 U.S. at 248, 106 S.Ct. 2505, but “must come forward with ‘specific facts showing that there is a genuine issue for trial.’ Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (quoting Fed.R.Civ.P. 56(e)). Summary judgment is not a vehicle for the court to resolve disputed factual issues. Faircloth v. United States, 837 F.Supp. 123, 125 (E.D.N.C.1993). Instead, a trial court reviewing a claim at the summary judgment stage should determine whether a genuine issue exists for trial. Anderson, 477 U.S. at 249, 106 S.Ct. 2505.

In making this determination, the court must view the inferences drawn from the underlying facts in the light most favorable to the non-moving party. United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962) (per curiam). Only disputes between the parties over facts that might affect the outcome of the case properly preclude the entry of summary judgment. Anderson, 477 U.S. at 247–48, 106 S.Ct. 2505. Accordingly, the court must examine “both the materiality and the genuineness of the alleged fact issues” in ruling on this motion. Faircloth, 837 F.Supp. at 125.

B. Parties' Contentions

Plaintiffs seek an order granting summary judgment as to liability, contending that:

(1) Defendants willfully violated the minimum wage provisions of FLSA by failing to pay Gaxiola and the FLSA class members the minimum wage established in 29 U.S.C. § 206(a)(1)when compensation on a piece-rate basis resulted in pay less than the minimum wage. Defendants also willfully violated the minimum wage provisions of the FLSA by shifting the...

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