Solis v. Hill Country Farms, Inc., Civil No. 3:09–cv–00162–HDV–RAW.

• Citation: 808 F.Supp.2d 1105,17 Wage & Hour Cas.2d (BNA) 1226
• Decision Date: 21 April 2011
• Docket Number: Civil No. 3:09–cv–00162–HDV–RAW.
• Parties: Hilda L. SOLIS, Secretary of Labor, United States Department of Labor, Plaintiff, v. HILL COUNTRY FARMS, INC., d/b/a Henry's Turkey Services, and Kenneth Henry, Individually, Defendants.
• Court: United States District Courts. 8th Circuit. United States State District Court of Southern District of Iowa

17 Wage & Hour Cas.2d (BNA) 1226

808 F.Supp.2d 1105

Hilda L. SOLIS, Secretary of Labor, United States Department of Labor, Plaintiff,

v.HILL COUNTRY FARMS, INC., d/b/a Henry's Turkey Services, and Kenneth Henry, Individually, Defendants.

Civil No. 3:09–cv–00162–HDV–RAW.

United States District Court,S.D. Iowa,Davenport Division.

April 21, 2011.

Mary D. Wright, U.S. Dept. of Labor Office of Solicitor, Kansas City, MO, for Plaintiff.

David L. Scieszinski, Wilton, IA, for Defendants.

RULING GRANTING PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT

HAROLD D. VIETOR, Senior District Judge.

Plaintiff Hilda Solis, Secretary of Labor, United States Department of Labor, sues defendants Hill Country Farms, Inc. d/b/a Henry's Turkey Services, and Kenneth Henry in his individual capacity, alleging that defendants violated the Fair Labor Standards Act of 1938 (FLSA), 29 U.S.C. §§ 206, 207, 211(c), 215(a)(2), 215(a)(5), and 216(c). At all times relevant hereto, Hill Country Farms was an enterprise engaged in commerce within the meaning of 29 U.S.C. § 203(s)(1). Jurisdiction of this matter is conferred upon this court by 29 U.S.C. §§ 216(c) and 217 and 28 U.S.C. § 1345. Plaintiff moves for partial summary judgment ¹ in respect to defendants' alleged minimum wage, § 206, and overtime, § 207, violations. Defendants resist, and the motion is submitted.

MOTION STANDARDS

Summary judgment is properly granted only when the record, viewed in the light most favorable to the nonmoving party, shows that there is no genuine issue of material fact, and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a); Walsh v. United States, 31 F.3d 696, 698 (8th Cir.1994). The moving party must establish its right to judgment with such clarity there is no room for controversy. Jewson v. Mayo Clinic, 691 F.2d 405, 408 (8th Cir.1982). “[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). An issue is “genuine” if the evidence is sufficient to persuade a reasonable jury to return a verdict for the nonmoving party. Id. at 248, 106 S.Ct. 2505. “As to materiality, the substantive law will identify which facts are material.... Factual disputes that are irrelevant or unnecessary will not be counted.” Id.

At the summary judgment stage, the district court should not weigh the evidence, make credibility determinations, or attempt to determine the truth of the matter. Id. at 249, 106 S.Ct. 2505. Instead, the court's function is to determine whether a reasonable jury could return a verdict for the nonmoving party based on the evidence. Id. at 248, 106 S.Ct. 2505. The evidence of the nonmovant is to be believed, and all justifiable inferences are to be drawn in the nonmovant's favor. Quick v. Donaldson Co., 90 F.3d 1372, 1377 (8th Cir.1996). “Because discrimination cases often turn on inferences rather than on direct evidence,” the court is to be particularly deferential to the nonmovant. EEOC v. Woodbridge Corp., 263 F.3d 812, 814 (8th Cir.2001) (citing Crawford v. Runyon, 37 F.3d 1338, 1341 (8th Cir.1994)). “Notwithstanding these considerations, summary judgment is proper when a plaintiff fails to establish a factual dispute on an essential element of her case.” Id. See Griffith v. City of Des Moines, 387 F.3d 733, 735–36 (8th Cir.2004).

FACTUAL BACKGROUND

The following facts are not disputed or are defendants' version of disputed facts. Fed.R.Civ.P. 56(a).

Defendant Hill Country Farms, Inc., d/b/a Henry's Turkey Services is a for-profit corporation located in Goldthwaite, Texas, and engaged in a variety of agricultural activities. In the mid–1960's, Hill Country Farms, Inc., owned and operated by T.H. Johnson, began working with men with disabilities living in Texas. At that time, defendant Kenneth Henry owned Henry's Turkey Services, Inc. In 1972, Henry and T.H. Johnson merged their companies to form Hill Country Farms, Inc. d/b/a Henry's Turkey Services. Henry has been a 50% owner and vice president or president of the merged company from the date of incorporation until the present. At all times and in all matters relevant hereto, the company used the names Hill Country Farms, Henry's Turkey Service, and Hill Country Farms doing business as Henry's Turkey Service, Inc., interchangeably. Hereinafter, references to Hill Country Farms or Henry's Turkey Service are to defendant Hill Country Farms d/b/a Henry's Turkey Service.

After the two corporations merged, Henry brought the Hill Country Farms' men with disabilities to the Midwest to work in Henry's Turkey Service's turkey insemination business and later to load turkeys on trucks. Henry's Turkey Service was caretaker for the men with disabilities and referred to them as, “the boys.” Beginning in the late 1970's, Henry and T.H. Johnson negotiated with Louis Rich Foods to supply workers at its turkey processing plant in West Liberty, Iowa. Henry's Turkey Service began providing the men with disabilities to Louis Rich to work on the plant's turkey processing line.

During the entire period they worked at the turkey processing plant, the Henry's Turkey Service turkey plant workers were housed in a converted school house in Atalissa, Iowa, known as the bunkhouse. During all times relevant hereto, Hill Country Farms rented the bunkhouse from the city of Atalissa for $600.00 per month. Most of the men living at the bunkhouse worked at the plant, and included Douglas Barco, Leonard Bearfield, Clayton Gene Berg, James Keith Brown, David Crouch, James Fowler, John David Hatfield, Paul Hayek, Tommy House, Kenneth Jackson, Tommy Johnson, Carl Wayne Jones, Johnny Kent, Ronald Lashley, Willie Levi, Jeffery S. Long, Johnny McDaniels, Joe Morrell, William (Bill) Murray, Robert O'Bier, John D. Owens, Preston Pate, Billy Penner, Robert Penner, Frank Rodriquez, Doyle Trantham, Raymond Vaughn, Brady Watson, and Henry (Dewey) Wilkens. Three of the workers with disabilities—Pete Graffagnino, Leon Hall, and Johnny McDaniels—generally worked at the bunkhouse rather than the plant, and performed house keeping chores, including helping to prepare the meals. Henry's Turkey Service determined which individuals worked at the plant and which worked at the bunkhouse.

Over the years, the plant changed ownership several times, but Henry's Turkey Service continued to provide workers throughout each change of ownership. In 1996, West Liberty Foods bought the plant, and it entered into a contract with Henry's Turkey Service, continuing the arrangements that the latter company had with the prior plant owners. Pursuant to the contract, Henry's Turkey Service was designated “the contractor,” and was required to provide an adequate number of “contractor's employees” and “at least two crew chiefs” to perform services required by the contract. Under the contract, West Liberty Foods informed Henry's Turkey Service what positions it needed filled on its processing line, and Henry's Turkey Service determined which of its workers would fill what position. Henry's Turkey Service crew chiefs supervised those workers.

Henry and T.H. Johnson negotiated with the owners of West Liberty Foods to determine the rate of pay for the turkey plant workers. West Liberty Foods paid Hill Country Farms for the plant workers' labor on a weekly basis, multiplying the number of birds processed by the number of positions filled by Henry's Turkey Service workers and again by the bird rate to determine the total amount of compensation. Hill Country Farms deposited the checks into a bank account in Goldthwaite, Texas entitled “Henry's Turkey Service–Iowa.”

Henry and T.H. Johnson talked on the phone regarding the Iowa operations from one to ten times per week. When T.H. Johnson became ill in 2005, Henry became actively involved in the business in Iowa, including handling the financial responsibilities of the operation. As early as 2005, Henry was scheduling the work of the crew chiefs at the bunkhouse. Hiring of workers in Iowa was also subject to Henry's approval.

Between 2006 and until the Atalissa bunkhouse was shut down on February 7, 2009, Henry increased his involvement in running the facility further, more closely controlling crew chiefs Randy and Dru Neubauer. As an example, Henry directed Randy Neubauer to cut the hours that supervisors were working at the bunkhouse, stating that, “I don't need three people up here helping Pete Graffagnino to cook lunch.” Henry stated that “[a]s a boss, you look at these kinds of things and say, ‘Hey, how do we justify that?’ ” Henry made several trips to Iowa in 2007 and again in 2008 to oversee the operations.

Jane Ann Johnson was Hill Country Farms' co-owner and corporate treasurer during the dates relevant to this case, November 16, 2006 to February 7, 2009. She was the corporate actor most familiar with, and who performed the company's duties relating to, the social security benefits of the men with disabilities, who all received Social Security (“SS”) or Supplemental Security Income (“SSI”) benefits, or both.

As their caretaker, Hill Country Farms was the designated representative payee of the SS and SSI benefits for each of the men with disabilities. The monthly benefits were directly deposited into the workers' individual bank accounts, located at the Mills County State Bank in Goldthwaite, Texas. Money for the workers' food and housing came from these benefits. Every month, Jane Ann Johnson wrote and signed checks from each worker's account payable to Hill Country Farms to reimburse it for the workers' room and board. In 2007, the monthly amount drawn on each worker's account was $426.28. In 2008, the amount was $487.00. Jane Ann Johnson kept a ledger of the checks. Additionally, checks from each worker's account were issued on...