Opinion ID: 75991
Heading Depth: 3
Heading Rank: 3

Heading: Recruitment Fees

Text: 37 Like the travel and visa expenses, the Farmworkers contend that the recruitment fees charged by some of the village recruiters and Gonzalez-Rodriguez should be reimbursed to the Farmworkers under the FLSA. The district court held that the Growers are not responsible for payment of recruitment fees. The Farmworkers contend that the district court should have applied the common-law rules of agency, especially the apparent authority principle. In a case involving a federal statute that is silent as to the applicability of agency law, the Supreme Court has stated that the apparent authority theory has long been the settled rule in the federal system. Am. Soc'y of Mech. Eng'rs, Inc. v. Hydrolevel Corp., 456 U.S. 556, 567, 102 S.Ct. 1935, 72 L.Ed.2d 330 (1982) ( applying apparent authority principle in an antitrust case, and citing appellate cases applying the principle to federal tax liability, bail bond fraud and securities fraud). 24 To be reimbursable, (1) these fees must not constitute other facilities and (2) there must be authority to hold the Growers liable for the unauthorized acts of their agents. Because the principles of agency law do not hold the Growers responsible for the recruitment fees, we need not discuss whether the recruitment fees are other facilities. 38 The Farmworkers claim that the referral fees were payments necessary to recruit the workers, and that the Growers are responsible for the fees under the apparent authority principle of the law of agency. When applying agency principles to federal statutes, the Restatement (Second) of Agency ... is a useful beginning point for a discussion of general agency principles. Burlington Indus. v. Ellerth, 524 U.S. 742, 755, 118 S.Ct. 2257, 141 L.Ed.2d 633 (1998). According to the Farmworkers, the fact that the Growers explicitly instructed Cervantes not to charge recruitment fees is immaterial: The rules as to the liability of a principal for authorized acts, are applicable to unauthorized acts which are apparently authorized. Restatement (Second) of Agency § 159 (1958) (hereinafter Restatement ); see also Gleason v. Seaboard Air Line Ry. Co., 278 U.S. 349, 355-57, 49 S.Ct. 161, 73 L.Ed. 415 (1929) (where there was no want of authority in the agent, the Court held the railroad liable despite agent's desire to benefit only himself). 39 According to the Restatement, apparent authority is created as to a third person by written or spoken words or any other conduct of the principal which, reasonably interpreted, causes the third person to believe that the principal consents to have the act done on his behalf by the person purporting to act for him. Restatement § 27. Apparent authority is created by the same method as that which creates authority, except that the manifestation of the principal is to the third person rather than to the agent. Restatement § 27 cmt. a; see also Product Promotions, Inc. v. Cousteau, 495 F.2d 483, 493 (5th Cir. 1974) 25 (Both types of authority depend for their creation on some manifestations, written or spoken words or conduct, by the principal, communicated either to the agent (actual authority) or to the third party (apparent authority). (citing Restatement §§ 26 & 27)). The agreed statement of undisputed facts includes no words or conduct of the Growers which, reasonably interpreted, could have caused the Farmworkers to believe the Growers consented to have the recruitment fees demanded on their behalf. 26 Because the Farmworkers have failed to allege facts to support the creation of apparent authority, the Growers are not liable for the recruitment fees.