Opinion ID: 422084
Heading Depth: 2
Heading Rank: 2

Heading: Application of FLCRA to These Appellants

Text: 18 The obligations and constraints of FLCRA apply only to a limited class: farm labor contractor[s] who, for a fee, either for [themselves] or on behalf of another person, recruit, solicit, hire, furnish, or transport migrant workers (excluding members of [their] immediate family) for agricultural employment. 7 U.S.C. § 2042(b). In addition to these restrictions, FLCRA contains several other exemptions, excluding certain additional situations from its scope. The most relevant of these exemptions for the purposes of this case is section 2042(b)(2) which exempts anyone who engages in these activities for the purpose of supplying migrant workers solely for his own operation. 7 U.S.C. § 2042(b)(2). Appellants raise a variety of arguments why the obligations of FLCRA do not apply to them. They argue that FLCRA does not apply to them at all because they received no fees for their services under section 2042(c), and they believe that their activities are covered by the exemption of section 2042(b)(2), noted above. They also assert that certain of the workers whom they recruited (essentially the canning workers) were not migrant workers as defined by section 2042(g) and that these same workers were not engaged in agricultural employment as defined in section 2042(d). 19 Before we turn to the substance of appellants' arguments, appellees cite several procedural reasons which they think preclude the appellants, in one way or another, from raising these issues at all. Appellees argue first that Stokely is collaterally estopped on the basis of Espinoza v. Stokely-Van Camp, Inc., 641 F.2d 535 (7th Cir.), cert. dismissed, 453 U.S. 950, 102 S.Ct. 27, 69 L.Ed.2d 1033 (1981), from arguing that it is not a farm labor contractor. Espinoza involved claims under FLCRA and the Wagner-Peyser Act brought against Stokely by six farmworkers who were employed by Stokely during the 1978 asparagus harvest in Rochelle, Illinois. Approximately $3300 in total damages were at stake in the Espinoza case. Appellees contend that Stokely's concession for the purposes of appeal in Espinoza that it was a FLC is determinative of Stokely's status in this case. 20 Appellees' argument fails for several reasons. First, registration as an FLC remains in effect for only one year, 7 U.S.C. § 2044(c), and is limited to a particular plant or location. Thus, at best, appellees' argument applies only to Stokely's activities at Rochelle in 1978. Second, the Supreme Court has sanctioned the use of offensive collateral estoppel only where its application is not unfair to a defendant. Parklane Hosiery Co. v. Shore, 439 U.S. 322, 331, 99 S.Ct. 645, 651, 58 L.Ed.2d 552 (1979). We think that it would be quite unfair to apply offensive collateral estoppel in the case before us. The Espinoza case involved a relatively insubstantial amount of damages and the claims of only a few plaintiffs. Stokely's incentive to contest the issue of FLC status in Espinoza was weak, and we decline to give Stokely's tactical decisions in Espinoza the far-reaching effect appellees seek. Finally, there is some question whether the appellees ever asserted the doctrine of collateral estoppel in the district court. As noted earlier, we generally decline to consider issues not properly raised initially in the district court. See p. 6 supra. 5 21 The district court found that Stokely was an FLC, and thus subject to FLCRA, because, for a fee, it recruited or furnished migrant workers for agricultural employment by Illinois seed companies in the interim periods between Stokely's harvesting and canning periods. 514 F.Supp. at 78. The district court considered Stokely's activities in securing interim employment to be key; without these activities, Stokely would conceivably not be considered an FLC because its recruitment would have been solely for its own operations. Id. Stokely contends that it neither received fees, nor did it recruit workers, for other than its own use. We note as an initial matter that FLCRA is a remedial statute and should be construed broadly. Donovan v. Heringer Ranches, Inc., 650 F.2d 1152, 1154 (9th Cir.1981); Marshall v. Green Goddess Avocado Corp., 615 F.2d 851, 857 (9th Cir.1980). A party claiming exemption from such legislation must demonstrate that its activities are 'plainly and unmistakably within [the] terms and spirit' of the exemption. Heringer Ranches, 650 F.2d at 1154 (quoting Arnold v. Ben Kanowsky, Inc., 361 U.S. 388, 392, 80 S.Ct. 453, 456, 4 L.Ed.2d 393 (1960)). 22 Stokely's fee argument is essentially that the only sort of fees which can be relevant to Stokely's status as an FLC must be fees paid for services as a farm labor contractor. 6 Since the fees Stokely received from interim employers were paid to cover partially Stokely's housing expenses, Stokely argues, and since the provision of housing is not an activity which, by itself, converts someone into an FLC, see 7 U.S.C. § 2042(b), these housing payments received by Stokely did not constitute a fee under section 2042(c). Stokely's reasoning is overly literal. The housing compensation or fees which Stokely received were in return for providing a ready work force to other local employers. The employers who hired the Farmworkers did not care how Stokely used the money which they paid; the interim employers' only concern was in obtaining workers, and they were happy to compensate Stokely for providing that service. There is no requirement in FLCRA to trace the purpose, or use to which applied, of a fee received by an FLC. This Court has already determined that fees received in compensation for housing costs are fees for purposes of FLCRA. Alvarez v. Joan of Arc, Inc., 658 F.2d 1217, 1220-21 (7th Cir.1981). See also Usery v. Coastal Growers Ass'n, 418 F.Supp. 99, 101 (C.D.Cal.1976), aff'd sub nom. Marshall v. Coastal Growers Ass'n, 598 F.2d 521 (9th Cir.1979). We see no reason to reassess that determination. The payments which Stokely received from other employers were fees within the meaning of FLCRA. 23 At oral argument, appellants also argued that Stokely could not be considered to be an FLC with respect to certain members of the plaintiff class because Stokely actually received no fees for providing workers from the Gibson City and Rochelle camps in certain years. While this argument may have some merit in a proper case, we think that appellants have not demonstrated that their failure to receive fees changes their status as FLC's in the case before us. As a general matter, the focus of FLCRA is on the recruitment process. At the time the group of workers involved here was recruited, the professed intention of Stokely was to attempt to obtain compensation from the other employers who temporarily hired the farmworkers whom Stokely recruited. In the typical situation, it would be the existence of the intention at the time of recruitment which would be the key factor in determining the applicability of section 2042. 24 We are mindful, however, of the potential inequity which might arise if we were to look only at events and intentions at the time of recruitment and ignored subsequent events. If a party could demonstrate that it specifically changed its payment policy and decided to forgo receiving fees from other employers for all or substantially all of the workers it recruited in order to avoid FLC status, it would seem to us that, under those circumstances, such a party could not be deemed to be an FLC, even though its professed intentions at the time of recruitment would have, without more, made it an FLC. But this exception does not seem to us appropriate where the failure to receive fees was merely incidental or fortuitous and involved only some of the workers recruited. Where fees are waived for only a fraction of the workers in a given recruiting effort, there is a presumption that FLC status continues. 25 A court must look at all of the workers recruited in a particular recruiting effort: in this case, that encompasses all of the workers the appellants recruited in a particular year to work in its Illinois camps. To avoid FLC status, appellants would have to show that the failure to receive fees was due neither to inadvertance nor to lack of success in persuading other employers to provide interim work. Rather, failure to receive fees would have to be attributable to a deliberate shift in corporate policy. We think it unlikely that appellants can make such a showing here, but upon remand they may attempt to make such a showing. 7 26 Appellants clearly recruited workers for other than their own exclusive use. Appellants correctly argue that the purpose of FLCRA was only to regulate the middlemen who broker laborers to farmers, growers and canners. However, appellants' further argument that the record shows that Stokely did not arrange, develop, or secure employment for the workers and was thus not the type of middleman which FLCRA was intended to regulate is wide of the mark. In fact, the district court explicitly found that the appellants actively engaged in attempting to develop interim jobs for the Farmworkers. 514 F.Supp. at 72. We have no reason to believe that this finding was erroneous. Stokely stated in its clearance orders that it would make efforts to develop jobs for its migrant workers with local employers in the idle periods between field work and cannery work. 514 F.Supp. at 72. 27 It was surely in Stokely's interest to attempt to provide interim employment for the Farmworkers it recruited. The record shows that interim employment, for the periods when Stokely itself did not require workers, was an essential part of Stokely's effort to ensure a full complement of workers for the fall as well as for the spring harvest and canning seasons. It was also clearly in Stokely's interest, in terms of its role as a labor recruiter competing against other recruiters, to attempt to offer as full a season of labor as possible. FLCRA requires only that an individual or corporation receive a fee for recruiting, soliciting or furnishing migrant workers. Appellants performed all those functions here. Appellants received fees and acted as farm labor contractors when they provided Farmworkers to other employers in return for compensation for housing costs. We therefore approve the district court's finding that appellants were farm labor contractors subject to the obligations of FLCRA. 8 28 Stokely further contends that the Farmworkers recruited under eight of the sixteen clearance orders for cannery work were not migrant workers engaged in agricultural employment as those terms are defined in FLCRA. 9 Stokely relies on its interpretation of subsection (d), which it believes to protect only work involving agricultural products prior to their delivery in an unmanufactured state. That is, any work performed after processing of an agricultural commodity is, in Stokely's view, not covered by FLCRA. 29 But Stokely's interpretation of the statutory language is overly restrictive. Read naturally, the subsection states that agricultural employment encompasses any activity which is performed before the unprocessed agricultural commodity is stored in some way. In other words, once an unprocessed (or unmanufactured) agricultural commodity is put in storage pending delivery to market, any processing function which is later performed is not covered by FLCRA. Conversely, any drying, packing, packaging, processing, freezing or grading which is performed before produce is stored is covered by the Act. See Guerrero v. Garza, 418 F.Supp. 182, 187 (W.D.Wis.1976). There was no contention in this case that the canning work in question was performed in connection with agricultural commodities which had previously been stored in an unmanufactured state. In fact, the record indicates that the canneries packed vegetables during the same period that these vegetables were being harvested in the area, with no intervening storage. The record thus supports the view that the cannery workers in this case were, like their counterparts in the fields, engaged in agricultural employment covered by the Act.