Cucumber Farm in a Pickle: Farm’s Classification of Migrant Workers as Independent Contractors Violates Wage and Hour Law

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June 26, 2015

Recently, a federal appeals court determined that a cucumber farm violated the Fair Labor Standards Act when it classified its migrant laborers as independent contractors instead of employees, and failed to pay them the applicable minimum wage.  The case is Perez v. D. Howes, LLC, No. 14-2026, — F.3d —-, 2015 WL 3833529 (6th Cir. 2015).  Through the opinion, the Court affirmed a lower court ruling, which held that the farm’s pickling cucumber harvesters were employees for purposes of the FLSA—contrary to the Appeals Court’s previous decision in an unrelated case—in which it held that pickling cucumber harvesters were properly characterized as independent contractors. 

The Court adopted the lower court’s reasoning in connection with the independent contractor v. employee analysis.  That reasoning—which focuses on whether “the worker is economically dependent upon the alleged employer or is instead in business for himself”—emphasizes the following factors, none of which is outcome determinative of employee status standing alone:

  1. The degree of permanency and duration of the relationship between the parties;
  2. The degree of skill required for rendering the services;
  3. The worker’s investment in equipment or materials required for the task;
  4. The worker’s opportunity for profit or loss depending on his skill;
  5. The nature and degree of the alleged employer’s control over the worker’s performance; and
  6. The extent to which the services rendered are an integral part of the alleged employer’s business.

In the D. Howes, LLC case, the facts indicated that the migrant agricultural laborers had very little entrepreneurial discretion in terms of the farming operation and, in large part, were provided with the equipment and instrumentalities needed to perform the cucumber harvest.  On these facts, applying the above factors, the Court concluded that the harvesters were employees for purposes of minimum wage payments.  More specifically, the Court determined: (1) [permanency factor] the cucumber harvesters only seasonally labored for 45 days, and exclusively worked for the farm—but this fact didn’t weigh in favor of employee status or independent-contractor status; (2)[degree of skill factor] pickle harvesting didn’t, in this case, require special skills, as the farm, and not the workers, was in charge of irrigation and application of fertilizer and insecticides—thus, this factor weighed in favor of employee status; (3)[worker investment factor] the farm’s investment in the operation dwarfed that of the workers; workers purchased gloves and wheelbarrows—the farm purchased everything else, including seeds, fertilizer, equipment, etc.—this factor weighed in favor of employee status; (4)[profit or loss factor] workers had no say in negotiation for the price of the cucumbers, did not manage the fields and had no opportunity to suffer a loss if the crop was bad—this factor weighed in favor of employee status; (5) [control factor]  the farm determined whether irrigation and insecticide was needed and workers had no autonomy with respect to particular parcels of land harvested or the timing of the harvest—this factor weighed in favor of employee status; and (6) [entrepreneurial independence factor] 84% of the farm’s business was derived from pickle farming—thus, the farm could not reasonably take the position that cucumber harvesting was not integral to its business, and that the harvesters were independent businesses—this factor weighed in favor of employee status.

The above analysis is commonly applied in cases governing agricultural labor.  This case does not give rise to a novel change in the law—but serves as a good reminder to agricultural businesses to look beyond labels and conventional wisdom in connection with whether workers are truly employees for wage and hour purposes.  This analysis of “entrepreneurial risk” is becoming more common in other settings—and has been given considerable weight in establishing employer/employee relationships.  The risks of employee misclassification are significant, including back pay, double damages and attorneys’ fees and costs.   

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