Heath v. Perdue Farms, Inc.
| Decision Date | 24 February 2000 |
| Docket Number | Civil Action No. WMN-98-3159. |
| Citation | 87 F.Supp.2d 452 |
| Parties | Clarence W. HEATH, et al. v. PERDUE FARMS, INC. |
| Court | U.S. District Court — District of Maryland |
Edgar N. James, James & Hoffman, P.C., Washington, DC, Deborah M. Thompson, Monique L. Dixon, Jonathan M. Smith, Debra Lynn Gardner, Baltimore, MD, Judith M. Conti, James & Hoffman, P.C., Washington, DC, for Plaintiffs.
Bryan D. Bolton, Funk & Bolton, P.A., Baltimore, MD, Gregory P. McGuire, Haynsworth, Baldwin, et al., Raleighoro, NC, Glenn L. Spencer, Haynsworth Baldwin Johnson & Greaves, Raleigh, NC, John G. Creech, Haynsworth Baldwin Johnson & Greaves, Greenville, SC, Paula Wright Coleman, Steven J. Mandel, U.S. Dept. of Labor, Washington, DC, for Defendant.
This is an action brought by over one hundred individuals employed as "chicken catchers" for processing plants owned and operated by Defendant Perdue Farms, Inc. in Salisbury, Maryland, Accomac, Virginia and Georgetown, Delaware. Plaintiffs seek to recover overtime wages to which they believe they are entitled under the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. ["FLSA"], and similar provisions of the Maryland Wage and Hour Law, Md. Lab. & Emp.Code Ann. §§ 3-401 to 3-431. Presently before the Court are cross motions for summary judgment on the issue of liability. Paper Nos. 71 (Defendant's) and 73 (Plaintiffs'). Also before the Court are Plaintiffs' motion to permit joinder of and notice to individuals that catch chickens for Perdue's processing plant in Milford Delaware, Paper No. 79, and Plaintiffs' motion to permit joinder of an additional chicken catcher from Perdue's Salisbury plant, Oliver Hazzard, Paper No. 82. All the motions are fully briefed. Upon a review of the motions and the applicable case law, the Court determines that no hearing is necessary (Local Rule 105.6) and that Plaintiffs' motion for summary judgment should be granted. The Court will also grant Plaintiffs' motion for joinder of Oliver Hazzard, but will deny the motion related to Perdue's Milford, Delaware facility.1
Perdue is a vertically integrated poultry operation which operates throughout the Delmarva region. Perdue hatches chickens in company owned hatcheries, and then ships them to independent contract farmers who raise them in accordance with Perdue's exacting specifications. Perdue, at all times, retains ownership of chickens. Once the chicks reach marketable age and size, chicken catchers travel to the contract farms, capture the chickens, and place them in cages for transport to the factory for slaughter.
Chicken catchers work in crews of approximately nine men: a crew typically consists of six catchers, one house man (who prepares the chicken houses before the catchers enter and nets the chickens), and one forklift driver, all under the supervision of a crew leader. Generally, the catchers, who collect at designated locations, are picked up by the crew leader who has retrieved a Perdue truck from the Perdue plant and has loaded the truck with necessary equipment. Most catchers ride to the farms in the Perdue crew cab because Perdue generally does not allow them to drive their own cars to the farms. The crew leaders are not allowed to vary or alter any of the instructions on the kill sheet.
The work of the catchers is physically arduous, dangerous and unpleasant. The chickens are caught by hand and stuffed into cages, which are then loaded onto Perdue trucks. Chicken catchers are paid by the piece rate, per 1000 chickens caught. The crews catch between 30,000 and 50,000 chickens each shift, and regularly work approximately 12 hours per shift for at least a five-day week; the workers do not receive overtime pay at time and one half for the hours worked over 40 hours per week.
The catchers' work, which is to deliver the raw material necessary for the operation of Perdue's poultry processing operation, is directly keyed to the work of the poultry processing plant in that the catching crews work only when a processing plant is operating; this includes working weekend and holidays depending on the slaughtering schedule at the plant. The crew leader, who is often a former chicken catcher, is presented with a contract by Perdue which specifies that the crew leader is an independent contractor and sets out the terms and conditions of the crew leader's work. None of the crew leaders have ever seriously negotiated any of the terms of their contracts or successfully challenged any of the contract provisions. The terms of the contract provide that the crew leaders will be paid on a weekly basis at a piece rate of between $28 — $29 per 1000 chickens caught; this piece rate is based on the crew leader's estimated costs, and is very carefully calculated by Perdue. From this lump sum, the crew leader pays himself and the members of his crew.
The only other business expenses which the crew leaders incur are for workers' compensation insurance, bookkeeping services, and occasional expenses for personal protective equipment ["PPE"] such as dust masks, hard hats, and gloves which the crew leader purchases from the Perdue plant and provides to the catchers who choose to use the PPEs. In contrast, Perdue owns all the heavy equipment and machinery required for the chicken catching operation, including the trucks, cages, fork loaders, catching pens, nets, crew cabs, fans, hoses, and disinfectant tanks.
Perdue controls every significant aspect of the chicken catching operation. Daily "kill sheets" dictate virtually every aspect of the catchers work for the shift: the sheets instruct the crew leaders when, what time, and where to work; the order in which the chicken houses are to be entered on farms which have multiple chicken houses; how many chickens are to be stuffed into each cage; and how many loads of chickens the workers are expected to catch. The crew leaders are not allowed to vary or alter any of the instructions on the kill sheet. Throughout the shift, the Perdue live-haul manager is in constant contact with a crew leader, communicating additional instructions by way of radio in the Perdue crew cab. The Perdue live-haul manager also travels to the chicken houses at least two to three times a week to observe and critique the work, and issues letters and memoranda to the crew leaders on matters which the manager observes on these site visits.
It is undisputed that Plaintiffs consistently work more than 40 hours per week and yet are not paid overtime wages. In this litigation, Perdue makes two main arguments as to why Plaintiffs are not entitled to overtime pay under the Fair Labor Standards Act. First, Perdue argues that Perdue is neither the sole nor "joint" employer of its chicken catchers. Instead, according to Perdue, Plaintiffs are the employees of the crew leaders, who are themselves independent contractors of Perdue. Second, Perdue argues that Plaintiffs qualify as "agricultural laborers," who are exempted from the overtime requirements of the FLSA. See 29 U.S.C. § 213(b)(12). Perdue makes similar arguments as to the inapplicability of the Maryland Wage and Hour Laws, i.e., that Perdue is neither the sole nor joint employer of Plaintiffs and that Plaintiffs are "engaged in ... [the] first processing of poultry" and therefore exempt from Maryland's overtime laws. See Md.Code Ann., Labor & Employ. § 403(a)(10).
In addition to disputing each of these arguments in their cross-motion, Plaintiffs assert that Perdue's violation of the FLSA was "willful," thus rendering Perdue liable for three years of back overtime pay, as opposed to two years for non-willful violations. See 29 U.S.C. § 255(a)( that willful violations are subject to a three year statute of limitations). The Court will address each of these arguments, seriatim. The Court will then address the issues related to Plaintiffs' joinder motions.
For Perdue to be liable for overtime violations under the FLSA or Maryland's Wage and Hour Law, the Court must find that Perdue has an employment relationship with Plaintiffs. The relevant provisions of these statutes have defined the employment relationship very broadly, consistent with the remedial purpose of the legislation. The definition of "employ" under the FLSA includes "to suffer or permit to work." 29 U.S.C. § 203(g). Maryland's Wage and Hour Law defines "employ" in a similar manner: "`employ' includes ... allowing an individual to work." Md.Code Ann., Labor & Empl. § 3-101(c). The Supreme Court has observed of FLSA's definition of the employment relationship that "[a] broader or more comprehensive coverage of employees within the stated categories would be difficult to frame." United States v. Rosenwasser, 323 U.S. 360, 362, 65 S.Ct. 295, 89 L.Ed. 301 (1945). See also Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 326, 112 S.Ct. 1344, 117 L.Ed.2d 581 (1992)( that FLSA defines the employment relationship "expansively" and as having a "striking breadth").
Courts have also stressed that the label that the parties give to their relationship is not controlling. See Real v. Driscoll Strawberry Assoc., Inc., 603 F.2d 748, 755 (9th Cir.1979). Thus, just because Perdue now3 calls its crew leaders "independent contractors," does not exclude the crew leaders or the members of the crew from being considered employees for the purpose of the FLSA or the Maryland Wage and Hour Law. Courts look not to the label, but to the underlying "economic reality" of the relationship. Rutherford Food v. McComb, 331 U.S. 722, 67 S.Ct. 1473, 91 L.Ed. 1772 (1947); Garrett v. Phillips Mills, Inc., 721 F.2d 979 (4th Cir. 1983).
To determine the economic reality of the relationship between workers and their putative employer, courts look at the following six factors:
1) the degree of control which the putative employer has over the manner in which the...
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