Dec 18, 2023

Ag Labor Review: California court gets it right

Maybe there is something to the old saying that “Even a broken clock is right twice a day,” meaning that something that is usually unreliable can be correct sometimes, by chance or by luck.

I have spent much of my career working in California agriculture. While there, I’ve had many occasions to witness oral arguments in front of the 9th U.S. Circuit Court of Appeals, and read through the opinions and anti-business rulings that have emerged from the court.

This court has routinely seemed significantly out of step with the other appellate courts, as well as with the U.S. Supreme Court.

It seemed to be that proverbial broken clock, except it could never tell you the correct time. However, it may have finally got one right.

One of the many vexing issues agricultural employers face is that when something goes wrong in a worker’s circumstance, their counsel (who are sometimes unabashedly anti-employer), will try to rope into litigation anyone they perceive to have a penny in their pocket. They will often try to do this by asserting — fairly or not — that the entity with that penny was somehow responsible for their client’s malady.

In this situation, they will attempt to assert that the injured party was injured by not just the responsible party, but also by others who had business dealings with that party. They will argue that the parties were joint employers.

This circumstance should be concerning for all employers: the present administration has sought to expand this notion of “joint employment” and consequent “joint liability.”

In this case, Morales-Garcia vs. Better Produce Inc., a group of berry pickers in Southern California asserted wage and hour violations. They were hired by growers to harvest the fruit, which was marketed by separate entities. The berries were packed and distributed in operations separate from the farms.

The marketers entered into agreements with the growers for the right to market and sell the berries, providing the growers with packaging materials. The growers were responsible for growing the berries and for supervising and directing the farmworkers harvesting the berries. The growers were also responsible for providing the workers with necessary equipment.

The marketers had the sole authority to make decisions regarding the berries’ sale, and after deducting various fees and the marketers’ sales commissions, remitted the balance of the monies to the growers.

In this case, the growers at some point stopped paying the farmworkers and filed for bankruptcy. The farmworkers filed suit in Federal District Court against the growers and the marketers as joint employers.

The Federal District Court ruled against the farmworkers, and they appealed the decision. The federal appeals court agreed with the lower court’s finding. The appellate court found the workers were not economically dependent on the berry marketers.

The marketers didn’t hire, fire, supervise or control the farmworkers. The marketers did not set the farmworkers’ hours or wages or tell them when or which fields they were to harvest. The appeals court also found that the farmworkers were not involved in the marketer’s usual course of business. These issues were the sole responsibility of the growers.

For employers, the lesson to be drawn from this case is that you need to be aware of the potential for “joint employment” to be asserted, and to protect yourself from that potential liability. Be certain that any contracts you enter never give you the right to control or direct the contractor’s employees.

You would hate to be left at the mercy of a broken clock.

Michael Marsh has led the National Council of Agricultural Employers since 2017. A Wyoming native and certified public accountant, Marsh worked for a CPA firm with farm and ranch clients investigating fraud. He was director of finance for the Almond Board of California for 7 years and for 15 years was CEO of the largest U.S. dairy producer trade association.