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Garcia-Celestino v. Ruiz Harvesting, Inc.

United States Court of Appeals, Eleventh Circuit

August 2, 2018

GAUDENCIO GARCIA-CELESTINO, individually and on behalf of all other persons similarly situated, RAYMUNDO CRUZ-VICENCIO, individually and on behalf of all other persons similarly situated, RAUL ISMAEL ESTRADA-GABRIEL, individually and on behalf of all other persons similarly situated, DANIEL FERRO-NIEVES, individually and on behalf of all other persons similarly situated, JOSE MANUEL FERRO-NIEVES, individually and on behalf of all other persons similarly situated, et al., Plaintiffs-Appellees,
v.
RUIZ HARVESTING, INC., Defendant, CONSOLIDATED CITRUS LIMITED PARTNERSHIP, Defendant-Appellant.

          Appeal from the United States District Court No. 2:10-cv-00542-MEA-MRM for the Middle District of Florida

          Before TJOFLAT and ROSENBAUM, Circuit Judges, and UNGARO, [*] District Judge.

          ROSENBAUM, CIRCUIT JUDGE.

         The English language contains many examples of homonyms-"words that have the same sound and often the same spelling but differ in meaning . . . ." The American Heritage Dictionary of the English Language 843 (5th ed. 2011). The words "letter" (a symbol in the alphabet or a note) and "bark" (a dog's cry or the outside covering of a tree trunk), for example, both fit the bill (as does "bill," for that matter).

         But the language of the law has its share of homonyms, too, and in this case we confront a couple of subtle ones. Specifically, this case turns on the difference in meaning between the term "employer" under the Fair Labor Standards Act, 29 U.S.C. § 203(d) ("FLSA"), and that same term under the general common law. Both definitions require us to ask how much "control" Defendant-Appellant Citrus Consolidated Limited Partnership ("Consolidated Citrus" or "the company") exerted over a group of farm workers who performed labor on Consolidated Citrus's groves. But the answer to that question depends, in turn, on the meaning of "control," which is also a legal homonym. Like "employer," it also has different meanings under the FLSA and the common law.

         Plaintiffs-Appellees are migrant workers in the United States under the federal government's H-2A visa program. Ruiz Harvesting, Inc. ("Ruiz Harvesting")-a farm-labor contractor and a separate entity from Defendant-Appellant Consolidated Citrus-hired Plaintiffs to pick fruit at Consolidated Citrus's groves. Then, apparently without Consolidated Citrus's knowledge, Ruiz Harvesting forced Plaintiffs to kick back a portion of their paychecks under threat of deportation.

         Based on these circumstances, Plaintiffs sued Ruiz Harvesting, Basiliso Ruiz (the owner of Ruiz Harvesting), and Consolidated Citrus for violations of the FLSA and for breach of contract. Both Ruiz Harvesting and Ruiz settled with Plaintiffs and ceased to be parties to this lawsuit. As for Consolidated Citrus, the district court held a bench trial and found it liable for both causes of action.

         Then this case made its first appearance before us. Garcia-Celestino v. Ruiz Harvesting, Inc., 843 F.3d 1276 (11th Cir. 2016) ("Garcia-Celestino I"). We upheld Consolidated Citrus's liability on the FLSA claim, but we remanded the matter to the district court on the breach-of-contract claim. We explained that the district court had mistakenly applied the definition of "employer" from the FLSA in determining whether Consolidated Citrus was a "joint employer" for purposes of resolving the breach-of-contract claim. See id. at 1284. Instead, we noted, that claim depends on the definition of "employer" under general common-law principles. See id. at 1289-90. So we remanded the case to the district court to determine whether Consolidated Citrus was an "employer" under the common-law definition of the term. Id. at 1293.

         On remand, the district court again concluded that Consolidated Citrus was an "employer" for purposes of the breach-of-contract claim. Consolidated Citrus challenges that determination.

         Our review of this case reveals that some confusion appears to exist concerning the practical ways in which the definitions of "employer" under the FLSA and of that same term under general common-law principles differ. So we take this opportunity to clarify that area of the law. And once we apply the common-law definition here, we conclude that Consolidated Citrus is not a joint employer for purposes of Plaintiffs' breach-of-contract claim since the company is not an "employer" under the common-law definition of that term. We therefore vacate the judgment of the district court.

         I. BACKGROUND

         We start with the relevant factual background, which we take from the district court's factual findings entered after a bench trial.

         Between 2007 and 2009, Plaintiffs worked as manual laborers picking fruit at Consolidated Citrus's Florida groves, though, as we have noted, Consolidated Citrus did not hire Plaintiffs.[1] Rather, Ruiz Harvesting did.

         We pause to explain how that situation arose. As Mexican nationals, Plaintiffs received clearance to work in the United States through the federal government's H-2A visa program, which allows employers to hire foreign agricultural workers on a temporary basis. Under the program, employers must submit to the Department of Labor an application commonly referred to as a "clearance order" detailing the terms and conditions of their prospective workers' employment. By federal regulation, the clearance order becomes the employees' work contract by default if the employer does not draw up a separate contract for them. See 20 C.F.R. § 655.122(q) (2016).[2]

         Although Consolidated Citrus hired some of its laborers directly, it also engaged contractors to hire others. Ruiz Harvesting was one such contractor. Ruiz Harvesting recruited Plaintiffs, submitted clearance orders to the Department of Labor on their behalves, and ultimately hired them for work in Consolidated Citrus's groves. For work contracts, Ruiz Harvesting and Plaintiffs relied on only their clearance orders for each year at issue.

         As for Consolidated Citrus, it had no role in deciding how much Ruiz Harvesting's workers would be paid. Rather, Consolidated Citrus simply paid Ruiz Harvesting for its total fruit production, and Ruiz Harvesting then determined payments to Plaintiffs.

         But because Consolidated Citrus required all workers to be hired through the H-2A program, Ruiz Harvesting had to comply with a number of federal regulations governing the minimum pay its workers would receive. As relevant here, even though Ruiz Harvesting chose to pay its workers on a "piece-rate" basis, meaning a fixed rate for every container of fruit they picked, federal regulations still required each worker to receive a minimum amount each pay period. So if a worker's piece-rate earnings fell below the federally mandated minimum, Ruiz Harvesting had to pay that minimum amount, anyway.

         In 2010, Plaintiffs brought suit alleging, among other things, violations of the FLSA and breach of contract. For starters, Plaintiffs sued Ruiz Harvesting and Ruiz, asserting that they forced the workers to pay them illegal kickbacks that impermissibly reduced the workers' take-home pay.[3] More specifically, Plaintiffs averred, whenever a worker's piece-rate earnings fell below the federal minimum, Ruiz Harvesting paid the worker in full but then demanded repayment of the portion it had supplemented. To extract the cash kickback payments, Plaintiffs alleged, Ruiz Harvesting officials often threatened the workers with deportation.

         This occurred despite the fact that Consolidated Citrus established a thorough auditing process to monitor Ruiz Harvesting's finances.

         Based on the theory that Consolidated Citrus and Ruiz Harvesting were "joint employers" under the law, Plaintiffs also named Consolidated Citrus as a defendant in their lawsuit, contending the company was equally liable for Ruiz Harvesting's kickback scheme. Plaintiffs eventually settled with both Ruiz Harvesting and Ruiz.

         Then they proceeded to trial against only Consolidated Citrus. The district court issued findings of fact and conclusions of law following a six-day bench trial. Ultimately, the court determined that Consolidated Citrus was a joint employer for purposes of both the breach-of-contract and FLSA claims. Based on these conclusions, the court found Consolidated Citrus liable for both claims.

         Consolidated Citrus appealed, and a panel of this court affirmed in part and reversed in part. Garcia-Celestino I, 843 F.3d at 1295. We affirmed the district court's conclusion that Consolidated Citrus was a joint employer under the FLSA and therefore upheld Consolidated Citrus's liability under that statute. Id. at 1294-95. But we concluded that the district court used the wrong legal standard to determine whether Consolidated Citrus was a joint employer for purposes of the breach-of-contract claim. Rather than the FLSA's "economic dependency" test, we explained that the district court should have applied the definition of "employer" found in the common law of agency. Id. at 1295.

         On remand, the district court analyzed its prior factual findings under the common-law definition of "employer" and once again determined that Consolidated Citrus was a joint employer for purposes of the breach-of-contract claim. Consolidated Citrus now appeals.

         II. STANDARD OF REVIEW

         On review after a bench trial, we accept all of the district court's factual findings unless they are clearly erroneous, but we consider legal issues de novo. Id. at 1284 n.4 (citing Tartell v. S. Fla. Sinus & Allergy Ctr., Inc., 790 F.3d 1253, 1257 (11th Cir. 2015)). Whether a company is a joint employer raises a question of law. Id. (citing Aimable v. Long & Scott Farms, 20 F.3d 434, 440 (11th Cir. 1994)).

         III. DISCUSSION

         As we have noted, the contracts at the center of Plaintiffs' breach-of-contract claims are Plaintiffs' clearance orders issued under the H-2A visa program, which, in turn, require compliance with the H-2A statutory and regulatory framework. That framework uses the term "employer." So we begin by reviewing the meaning of that term under the Immigration and Nationality Act ("INA"), as amended by the Immigration Reform and Control Act of 1986 ("IRCA"), which governs the H-2A visa program. See 8 U.S.C. § 1188.

         Notably, although the INA and several federal regulations set out requirements for employers who take on H-2A workers, neither the statute nor any relevant regulation expressly defines the term "employer."

         But the word "employer" does have a particular meaning in the common law. And as we explained in Garcia-Celestino I, where a federal statute contains a term with settled meaning under the common law, courts must presume Congress meant to import that meaning unless the statute says otherwise. 843 F.3d at 1289-90 (citing NLRB v. Amax Coal Co., 453 U.S. 322, 329 (1981)). Since the INA does not define "employer," we concluded that Congress intended the statute to carry the definition of that term from the common law of agency. Id. Consequently, we reasoned, whether Plaintiffs' work contract makes Consolidated Citrus a "joint employer" under the relevant portions of the INA depends on the definition of "employer" taken from the general common law of agency. Id. at 1290.[4]

         For that definition, we looked chiefly to Nationwide Mutual Insurance Company v. Darden, in which the Supreme Court articulated several factors relevant to determining whether an employer-employee relationship exists at common law. See 503 U.S. 318, 323-24 (1992) (citing Cmty. for Creative NonViolence v. Reid, 490 U.S. 730, 751-52 (1989)). Foremost among those factors, we observed, is "the hiring entity's 'right to control the manner and means by which the product is accomplished.'" Garcia-Celestino I, 843 F.3d at 1292-93 (quoting Darden, 503 U.S. at 323). See also Restatement (Second) of Agency § 220(1) (1958) (defining "servant" as someone "employed to perform services in the affairs of another and who with respect to the physical conduct in the performance of the services is subject to the other's control or right to control"); Clackamas Gastroenterology Assoc., P.C. v. Wells, 538 U.S. 440, 448 (2003) (designating "the common-law element of control" as "the principal guidepost that should be followed" in determining joint-employer status); Crew One Prod., Inc. v. N.L.R.B., 811 F.3d 1305, 1311 (11th Cir. 2016) (citing N.L.R.B. v. Associated Diamond Cabs, Inc., 702 F.2d 912, 919 (11th Cir. 1983)) (observing that among the common-law factors, control over employees should receive "special attention" in determining employer status).

         Yet while the right to control is indispensable to our analysis and bears more weight than any other single factor, that consideration alone "is not dispositive." Reid, 490 U.S. at 752. Rather, we must also account for other aspects of the relationship between the putative employer and the worker. Among those, we noted in Garcia-Celestino I, the Supreme Court has identified for possible consideration the following: (1) "the skill required [for the work]"; (2) "the source of the instrumentalities and tools"; (3) "the location of the work"; (4) "the duration of the relationship between the parties"; (5) "whether the hiring party has the right to assign additional projects to the hired party"; (6) "the extent of the hired party's discretion over when and how long to work"; (7) "the method of payment"; (8) "the hired party's role in hiring and paying assistants"; (9) "whether the work is part of the regular business of the hiring party"; (10) "whether the hiring party is in business"; (11) "the provision of employee benefits"; and (12) "the tax treatment of the hired party." Garcia-Celestino I, 843 F.3d at 1293 (internal quotation marks omitted) (quoting Darden, 503 U.S. at 323-34).

         Nevertheless, we emphasized that "[t]hough these factors may be instructive, 'there is no shorthand formula or magic phrase that can be applied to find the answer' [to whether a party is an "employer"] under the common law approach." Id. (quoting NLRB v. United Ins. Co. of Am., 390 U.S. 254, 258 (1968)). Rather, courts must assess what is relevant in a given case. And because Darden involved the question of whether the plaintiff there was an independent contractor or an employee (as did Reid, from which the Darden Court adopted its analytical framework), the Darden factors do not always apply easily to cases concerning other work relationships. Sometimes some-or even most-of the usual factors will not shed light on a particular set of facts. In those cases, courts have focused on other considerations more relevant to the specific facts before them.

         For instance, in Clackamas, the Supreme Court addressed whether four physician shareholders who jointly owned a practice and comprised its board of directors also counted as "employees" of the practice under the common law. 538 U.S. at 442. The Supreme Court observed that the entity at issue, a "professional corporation," had "no exact precedent in the common law" and found the Darden factors unhelpful to answering the question of whether the physicians were "employees." Id. at 445-47. So the Court set about identifying relevant factors for the lower courts to use to analyze whether the professional corporation was the physicians' "employer" under the common law.

         The Court began by reaffirming that "the common-law element of control is the principal guidepost" for any analysis. Id. at 447-48. But the factors it held to be relevant, which it drew from an Equal Employment Opportunity Commission compliance manual, focused on the very specific question of "whether a shareholder-director is an employee." Id. at 449. Those factors included "[w]hether the organization can hire or fire the individual or set the rules and regulations of the individual's work"; "[w]hether and, if so, to what extent the organization supervises the individual's work," "[w]hether the individual reports to someone higher in the organization"; "[w]hether and, if so, to what extent the individual is able to influence the organization"; "[w]hether the parties intended that the individual be an employee, as expressed in written ...


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