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Alfaro-Huitron v. WKI Outsourcing Solutions, LLC

United States District Court, D. New Mexico

September 28, 2018

ESTEBAN ALFARO-HUITRON, ELEAZAR GARCIA-MATA, JOSE ANTONIO GARCIA-MATA, JUAN GUZMAN, JOSE GERARDO JASSO, RAUL JASSO-CERDA, ISMAEL MARTINEZ GONZALEZ, ENRIQUE ROJAS-TORRES, LAZARO ROJAS-TORRES, TRINIDAD SANTOYO-GARCIA PEDRO TAMEZ, ANGELA TREJO, EFRAIN TREJO, SANTOS TREJO, and YANETH TREJO, Plaintiffs,
v.
WKI OUTSOURCING SOLUTIONS, LLC, JAIME CAMPOS, CERVANTES AGRIBUSINESS, CERVANTES ENTERPRISES, INC., RJF FARMS, INC., RONNIE J. FRANZOY, TIERRA DE DIOS FARMS, LLC, RIO VALLEY CHILI INC., LACK FARMS, INC. and SKYLINE PRODUCE, LLC Defendants.

          MEMORANDUM OPINION AND ORDER GRANTING THE CERVANTES DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

         This matter is before the Court on Defendants Cervantes Agribusiness' and Cervantes Enterprises, Inc.'s (“Cervantes Defendants”) joint Motion for Summary Judgment [ECF No. 233]. Plaintiffs[1] are United States citizens or lawful permanent residents who were given hiring priority through the federal H-2A program to provide manual labor on fields and land owned by the Cervantes Defendants during the 2011-2012 harvest seasons. The farm labor contractor who recruited and hired Plaintiffs - Defendants WKI Outsourcing Solutions, LLC (“WKI”) and its owner Jaime Campos - never actually furnished Plaintiffs to work for the Cervantes Defendants. Citing a drought, Campos cancelled Plaintiffs' work contracts at the last minute. Plaintiffs allege there was no such unusual drought; the real reason Campos cancelled their contracts was because he realized there were too many qualified U.S. workers, so he would not be able to access foreign laborers from Mexico, which was Defendants' alleged goal all along.

         Based on the theory that the Cervantes Defendants and WKI “jointly employed” Plaintiffs, they sued the Cervantes Defendants under the Migrant and Seasonal Agricultural Worker Protection Act, 29 U.S.C. §§ 1801-1854 (“AWPA”) contending, among other things, that they were equally liable for WKI's cancellation of their work contracts. After carefully considering the motion, briefs, and relevant law, the Court concludes that the Cervantes Defendants' motion should be granted because they did not jointly employ Plaintiffs.

         I. FACTUAL BACKGROUND

         Most of the facts necessary to resolve the pending motion for summary judgment are set forth in the Court's Memorandum Opinion and Order previously granting summary judgment to the Cervantes Defendants, which are either undisputed or construed in the light most favorable to Plaintiffs as the non-movants. See Mem. Op. and Order 1-11, ECF No. 232 (“Order”). The Court need not repeat those facts herein but adopts them by reference for the purposes of resolving the motion for summary judgment and presents the following additional material facts.

         A. The H-2A Program

         Under the H-2A program, WKI had to give hiring priority to domestic, or “U.S. workers” like Plaintiffs before petitioning for foreign workers. An employer like WKI could hire foreign guest laborers under the H-2A visa program only if it could certify that “there are not sufficient workers who are able, willing, and qualified” to perform the work and employing foreign workers “will not adversely affect the wages and working conditions of workers in the United States similarly employed” 8 U.S.C § 1188(a)(1). An agricultural employer or its agent works with the State Workforce Agency to recruit U.S. workers on an intrastate and interstate basis. See 20 C.F.R § 655.154(a). If an employer has satisfied the recruitment assurances and other promises identified in 20 C.F.R. § 655.161, then the Secretary of Labor can grant a request to hire temporary foreign agricultural labor. See 8 U.S.C. § 1188. The H-2A regulations require an employer to provide baseline benefits to both domestic and foreign H-2A workers. See 20 C.F.R. § 655.122(a). “By requiring that the employer provide these baseline benefits, the regulations ensure that foreign workers will not be appear more attractive to the employer than domestic workers, thus avoiding any adverse effects for domestic workers.” Garcia-Celestino v. Ruiz Harvesting, Inc., 843 F.3d 1276, 1285 (11th Cir. 2016) (“Garcia-Celestino I”).

         “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.” Garcia-Celestino v. Ruiz Harvesting, Inc., 898 F.3d 1110, 1116 (11th Cir. 2018) (“Garcia-Celestino II”). “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.” Id. (citing 20 C.F.R. § 655.122(q)).

         In this case, WKI used its clearance order to recruit and hire Plaintiffs, and because no separate contract was drawn up, the clearance order served as the work contract between WKI and Plaintiffs.[2] Under the terms of the clearance order WKI advertised the jobs with an hourly wage of $9.71 per hour of labor and that rate would have to be paid to all workers who filled the positions, whether or not the employers ultimately hired domestic or foreign H-2A workers. See 20 C.F.R. § 655.122(a).

         In this lawsuit, Plaintiffs' basic contention is that Campos and the Defendants, including the Cervantes Defendants, always intended to exploit the H-2A program to access guest laborers from Mexico because they believed they would work harder for less money. When it became apparent that Campos would not be able to provide Mexican workers, he cancelled Plaintiffs' work contracts under the pretense of a drought.

         II. PROCEDURAL HISTORY

         In addition to the Cervantes Defendants, WKI and Campos entered into farm labor contracts under the H-2A program with five other farms based in southern New Mexico - Defendants RJF Farms, Inc. and its owner Ronnie J. Franzoy, Tierra de Dios Farms, LLC, Lack Farms, Inc., Rio Valley Chili, Inc., and Skyline Produce, LLC. Plaintiffs voluntarily dismissed claims against RJF Farms, Inc., Ronnie J. Franzoy, Rio Valley Chili, Inc., Lack Farms, Inc., and Skyline Produce, LLC. See ECF. Nos. 71, 146, 158.

         As for the Cervantes Defendants, Plaintiffs alleged four causes of action against them for various statutory violation of the AWPA, fraud, breach of contract, and civil conspiracy. See Pls.' First Am. Comp., ECF. No. 103. In May and July 2016, the Cervantes Defendants moved for, and the Court granted, summary judgment to the Cervantes Defendants, concluding that no reasonable jury could find them liable to Plaintiffs on those theories of liability.[3]

         As for Defendants WKI and Tierra, they never obtained legal counsel as required for entity parties. See D.N.M.LR-Civ. 83.7. WKI attempted to answer pro se in conjunction with Defendant Jaime Campos, WKI's owner. See ECF. No. 55. The Court interpreted that answer as that of Campos', not WKI's. See ECF No. 69. On September 3, 2015 the Honorable William P. Lynch, United States Magistrate Judge, entered a Notice of Proposed Entry of Default Judgment, warning Tierra and WKI that unless they “retain counsel and submit answers filed by an attorney by September 25, 2015, [he would] recommend to the District Judge that default judgment be entered against them and in favor of the Plaintiffs.” ECF No. 128. Tierra and WKI never heeded that warning, so on October 7, 2015 the Clerk of Court filed the Clerk's Entry of Default Judgment against Tierra and WKI for having failed to plead or otherwise defend. See ECF Nos. 135, 136. Plaintiffs never moved for a damages hearing, and no subsequent litigation concerning the Clerk's Entry of Default has occurred since that October 7, 2015 entry. To date, WKI and Tierra have not obtained legal counsel.

         Defendant Jaime Campos, pro se, also appears to have stopped participating in the litigation. His last docket filing was on October 10, 2015. See ECF No. 137. He failed to appear at a status conference before Judge Lynch on March 2, 2016, although he did participate in a mid-March 2016 deposition. See ECF Nos. 161, 168.

         III. STANDARD OF REVIEW

         Summary judgment is warranted “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-50 (1986). A fact is considered material if it “might affect the outcome of the suit under the governing law.” Anderson, 477 U.S. at 248-50. An issue is “genuine” if the evidence is such that it might lead a reasonable jury to return a verdict for the nonmoving party. See Tabor v. Hilti, Inc., 703 F.3d 1206, 1215 (10th Cir. 2013). In analyzing a motion for summary judgment, a court must view the evidence and all reasonable inferences therefrom in the light most favorable to the nonmovant. See Jones v. Norton, 809 F.3d 564, 573 (10th Cir. 2015). When “the moving party does not bear the ultimate burden of persuasion at trial, it may satisfy its burden at the summary judgment stage by identifying a lack of evidence for the nonmovant on an essential element of the nonmovant's claim.” Cassara v. DAC Serv., Inc., 276 F.3d 1210, 1212 (10th Cir. 2002). The burden then shifts to the opposing party to come forward with admissible evidence to create a genuine issue of material fact on that element. See Bacchus Indus., Inc. v. Arvin Indus., Inc., 939 F.2d 887, 891 (10th Cir. 1991).

         IV. DISCUSSION

         The Court next analyzes whether the Cervantes Defendants and WKI jointly employed Plaintiffs such they are equally liable for WKI's cancellation of their work contracts.

         A. The AWPA and Joint Employment Principles

         In Paragraph 142(b) of Plaintiffs' First Amended Complaint, Plaintiffs sue the Cervantes Defendants under 29 U.S.C. § 1822(c) on the theory that they are liable for WKI's and Campos' last minute cancellation of their work contracts. Section 1822(c) provides that “[n]o farm labor contractor, agricultural employer, … shall, without justification, violate the terms of any working arrangement made by that contractor, employer, or association with any migrant agricultural worker.” Plaintiffs contend that the “working arrangement” at issue was the clearance order that was used to recruit and hire them.

         The Cervantes Defendants are liable only if they jointly employed Plaintiffs with WKI. In order “to assure necessary protections for migrant and seasonal agricultural workers, ” 29 U.S.C. § 1801, the AWPA imposes obligations on “agricultural employers.”[4] Under the AWPA, the term agricultural employer means “any person who owns or operates a farm, ranch, processing establishment, cannery, gin, packing shed or nursery, or who produces or conditions seed, and who either recruits, solicits, hires, employs, furnishes, or transports any migrant or seasonal agricultural worker.” Id. ยง 1802(2). If an employer fails to adhere to any of the provisions in the AWPA the statute creates a private right of action in ...


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