Naumes of Oregon, Inc. v. Employment Division

• Court: Court of Appeals of Oregon
• Writing for the Court: Before SCHWAB; FOLEY
• Citation: 23 Or.App. 57,541 P.2d 141
• Parties: NAUMES OF OREGON, INC., Petitioner, v. EMPLOYMENT DIVISION, Ross Morgan, Administrator, Respondent.
• Decision Date: 13 October 1975

Page 141

541 P.2d 141 23 Or.App. 57 NAUMES OF OREGON, INC., Petitioner,
v.
EMPLOYMENT DIVISION, Ross Morgan, Administrator, Respondent. Court of Appeals of Oregon. Argued and Submitted Sept. 18, 1975.
Decided Oct. 13, 1975.

[23 Or.App. 58]

Page 142

William G. Purdy, Medford, argued the cause for petitioner. With him on the brief were Frohnmayer & Deatherage, Medford.

John W. Burgess, Asst. Atty. Gen., Salem, argued the cause for respondent. With him on the brief were Lee Johnson, Atty. Gen., and W. Michael Gillette, Sol. Gen., Salem.

Before SCHWAB, C.J., and FOLEY and THORNTON, JJ.

FOLEY, Judge.

This is an appeal by petitioner, Naumes of Oregon,[23 Or.App. 59] Inc., from a decision by a referee of the state Employment Division that petitioner is an 'employer' subject to payment of taxes for unemployment insurance, as required by provisions of the Employment Division Law, ORS ch. 657. Petitioner-Naumes contends that it is within the exclusionary limitations of ORS 657.045(1), (2) (d), exempting the employment of agricultural labor from the Employment Division Law.

Petitioner is an Oregon corporation owned by members of the Naumes family and engaged in the packing of fruit which

Page 143

is primarily grown in pear orchards it manages. The fruit packed by petitioner was grown in various Rogue River Valley orchards. Although petitioner owned none of these orchards, nine of the twelve orchards managed by it are essentially owned by members of the Naumes family and it had written leases with two of the orchards and an oral agreement with another to manage the orchards and pack the fruit. With the exception of two orchards, petitioner performed all of the necessary irrigating, spraying, cultivating, fertilizing, picking and thinning on each of the several orchards.

Petitioner charges the respective owners of the orchards only for the actual cost of its services in managing the orchards. The only profit petitioner receives is a 'packing profit' from the processing of the fruit. The pears from each of the several orchards are kept separate throughout the entire packing and storage process and the proceeds from the sale of the fruit are distributed to each orchard owner according to his respective 'pack out.' It is undisputed that petitioner's pack consisted of more than 50 percent of the fruit from the orchards it managed.

Petitioner contends that the services performed in managing the orchards from which more than 50 [23 Or.App. 60] percent of the fruit it packs originates renders it an 'operator' of the orchards exempt from the Employment Division Law.

ORS 657.045 provides as follows:

'(1) 'Employment' does not include agricultural labor.

'(2) 'Agricultural labor' includes all services performed:

'* * *

'(d) In the employ of the operator or group of operators of a farm or farms (or a cooperative organization of which such operator or operators are members) in handling,...