Court Opinion

ID: 9477084
Source: CourtListenerOpinion
Date Created: 2023-08-05 06:13:16.286341+00
Date Added: 2024-06-11T17:45:40.756013
License: Public Domain

HARLINGTON WOOD, Jr., Circuit Judge.
This, as unlikely as it may at first seem, is a federal pickle case. The issue is whether the migrant workers who harvest the pickle crop of defendant Lauritzen Farms, in effect defendant Michael Laurit-zen, are employees for purposes of the Fair Labor Standards Act of 1938 (“FLSA”),1 or are instead independent contractors not subject to the requirements of the Act.2 The Secretary, alleging that the migrant harvesters are employees, not independent contractors, brought this action seeking to enjoin the defendants from violating the minimum wage requirements and to en*1532force the record-keeping and child labor provisions of the Act.
After discovery, which entailed principally collecting depositions of migrant workers who had worked for the defendants, the Secretary moved for partial summary judgment. The defendants countered with affidavits of some of the previously deposed migrant workers which contradicted their earlier depositions. The contradictions were charged to language interpretation difficulties and to the absence of defendants’ counsel when the depositions were taken.3 The district court granted the Secretary partial summary judgment, determining the migrants to be employees, not independent contractors. Brock v. Lauritzen, 624 F.Supp. 966, 970 (E.D.Wis.1985) (Lauritzen I). Trial was then set to determine the remaining issues of possible minimum wage violations, child labor violations, and the sufficiency of the defendants’ statutorily required record keeping. By an amended complaint, however, the minimum wage violation allegations were eliminated. The Secretary then sought summary judgment on the remainder of the case. Some migrant workers sought unsuccessfully to intervene to protect their claimed contractual status. The defendants protested that they had raised material factual issues, but the district court disagreed. The district court found that the controlling material facts were largely undisputed and entered final judgment on the issues of record-keeping and child labor violations, enjoining the defendants from further violations of the Act, and dismissing the action. Brock v. Lauritzen, 649 F.Supp. 16, 18-19 (E.D.Wis.1986) (Lauritzen II). Both summary judgment orders are appealed as well as the district court’s denial of the defendants’ motion under Federal Rule of Civil Procedure 60(b)(6), seeking relief from the first entry of partial summary judgment.
(I. FACTUAL BACKGROUND
We must examine the factual background of the case to determine whether the employment status of the migrant workers could be concluded as a matter of law.
On a yearly basis the defendants plant between 100 to 330 acres of pickles on land they either own or lease. The harvested crop is sold to various processors in the area. The pickles are handpicked, usually from July through September, by migrant families from out of state. Sometimes the children, some under twelve years of age, work in some capacity in the fields alongside their parents. Many of the migrant families return each harvest season by arrangement with the defendants, but, each year, other migrant families often come for the first time from Florida, Texas and elsewhere looking for work. The defendants would inform the families, either orally or sometimes in writing, of the amount of compensation they were to receive. Compensation is set by the defendants at one-half of the proceeds the defendants realize on the sale of the pickles that the migrants harvest on a family basis. Toward the end of the harvest season, when the crop is less abundant and, therefore, less profitable, the defendants offer the migrants a bonus to encourage them to stay to complete the harvest, but some leave anyway.
Wisconsin law requires a form “Migrant Work Agreement” to be signed, and it was used in this case. It provides for the same pay scale as is paid by the defendants except the minimum wage is guaranteed. The Wisconsin Migrant Law invalidates agreements that endeavor to convert migrant workers from employees to independent contractors. Wis.Stat.Ann. § 103.90-.97 (West 1987); 71 Op. Att’y Gen. Wis. 92 (1982). Accompanying the work agreement is a pickle price list purporting to set forth what the processors will pay the defendants for pickles of various grades. This price list is the basis of the migrant workers’ compensation. The workers are not parties to the determination of prices agreed upon between the defendants and the processors.
*1533All matters relating to planting, fertilizing, insecticide spraying, and irrigation of the crop are within the defendants’ direction, and performed by workers other than the migrant workers here involved. Occasionally a migrant who has worked for the defendant previously and knows the harvesting will suggest the need for irrigation. In order to conduct their pickle-raising business, the defendants have made a considerable investment in land, buildings, equipment, and supplies. The defendants provide the migrants free housing which the defendants assign, but with regard for any preference the migrant families may have. The defendants also supply migrants with the equipment they need for their work. The migrants need supply only work gloves for themselves.
The harvest area is subdivided into migrant family plots. The defendants make the allocation after the migrant families inform them how much acreage the family can harvest. Much depends on which areas are ready to harvest, and when a particular migrant family may arrive ready to work. The family, not the defendants, determines which family members will pick the pickles. If a family arrives before the harvest begins, the defendants may, nevertheless, provide them with housing. A few may be given some interim duties or be permitted to work temporarily for other farmers. When the pickles are ready to pick, however, the migrant family’s attention must be devoted only to their particular pickle plot.
The pickles that are ready to harvest must be picked regularly and completely before they grow too large and lose value when classified. The defendants give the workers pails in which to put the picked pickles. When the pails are filled by the pickers the pails are dumped into the defendants’ sacks. At the end of the harvest day a family member will use one of defendants’ trucks to haul the day’s pick to one of defendants’ grading stations or sorting sheds. After the pickles are graded the defendants give the migrant family member a receipt showing pickle grade and weight. The income of the individual families is not always equal. That is due, to some extent, to the ability of the migrant family to judge the pickles’ size, color, and freshness so as to achieve pickles of better grade and higher value.
The workers describe their work generally as just “pulling the pickles off.” It is not always physically easy, however, because the work involves stooping and kneeling and constant use of the hands, often under a hot sun. Picking pickles requires little or no prior training or experience; a short demonstration will suffice. One migrant worker recalled that when he was ten years old it had taken him about five minutes to learn pickle picking. Pickles continue to grow and develop until picked, but not uniformly, so harvesting is a continuing process. The migrant workers’ income depends on the results of the particular family’s efforts. The defendants explain that the migrants exercise care for both the plants and the pickles, which results in maximum yields, a benefit to the family as well as to the defendants. Machine harvesting, although advantageous for other crops, is not suitable for pickle harvesting. The defendants leave the when and how to pick to the families under this incentive arrangement. The defendants occasionally visit the fields to check on the families, the crop, and to supervise irrigation. The defendant, Michael Lauritzen, who actually operates the business, is sometimes referred to as the “boss.” Some workers expressed the belief that he had the right to fire them.
The district court considered the factual background generally set forth above to be largely undisputed. Lauritzen I, 624 F.Supp. at 966. The defendants deny that some of the facts are undisputed because some of the migrants subsequently changed their testimony. They argue that some migrants had language problems which caused them to respond incorrectly during their depositions. To support this argument, the defendants presented coun-teraffidavits from four migrants which allege in conclusory language that their relationship with the defendants had been at all times “that of an independent businessman or contractor and not one of an employee.” *1534They “contracted,” they say, with the defendants. In other respects these later counteraffidavits did not dispute the basic factual background that we have recounted, except that these four migrants claimed that their pickle-picking expertise required at least a complete harvest to develop. The conclusions set forth in the affidavit, obviously in the language of a lawyer, not that of the migrants themselves, create no material factual issues.
The affidavits of defendant Michael Lau-ritzen, for the most part, track the facts found to be undisputed by the trial judge, adding only more detail. Lauritzen claims that the Wisconsin pickle industry as a whole considers the relationship with migrant workers to be contractual. He explains that hourly compensation does not maximize revenues, and that the more proficient migrants would not work except through a contractual relationship. He denies that the workers receive any compensation if there are no pickle harvest sale proceeds. Other aspects of the pickle business, Lauritzen points out, such as crop dusting, also are done by contract. Nothing in the Lauritzen affidavit differs in any substantial way from the trial court’s view of the facts, except that stress is placed on certain details in an effort to make an employment arrangement appear to be more than it is.
II. STANDARDS OF REVIEW
We need not generally review again the requirements of disposition by summary judgment,4 except to note that a minor factual dispute does not preclude summary judgment. The disputed facts must be “outcome determinative under the governing law.” Hossman v. Spradlin, 812 F.2d 1019, 1020-21 (7th Cir.1987) (per curiam); Egger v. Phillips, 710 F.2d 292, 296 (7th Cir.) (en banc), cert. denied, 464 U.S. 918, 104 S.Ct. 284, 78 L.Ed.2d 262 (1983). The court should neither “look the other way” to ignore genuine issues of material fact, nor “strain to find” material fact issues where there are none, and we shall not. Tillett v. J.I. Case Co., 756 F.2d 591 (7th Cir.1985); Mintz v. Mathers Fund, Inc., 463 F.2d 495, 498 (7th Cir.1972).
It is well recognized that under the FLSA the statutory definitions regarding employment5 are broad and comprehensive in order to accomplish the remedial purposes of the Act. See, e.g., United States v. Rosenwasser, 323 U.S. 360, 362-63, 65 S.Ct. 295, 296, 89 L.Ed. 301 (1945); Real v. Driscoll Strawberry Associates, Inc., 603 F.2d 748, 754 (9th Cir.1979). Courts, therefore, have not considered the common law concepts of “employee” and “independent contractor” to define the limits of the Act’s coverage. We are seeking, instead, to determine “economic reality.” Brock v. Mr. W Fireworks, Inc., 814 F.2d 1042, 1043 (5th Cir.1987); Karr v. Strong Detective Agency, Inc., 787 F.2d 1205, 1207 (7th Cir.1986). For purposes of social welfare legislation, such as the FLSA, “ ‘employees are those who as a matter of economic reality are dependent upon the business to which they render service.’ ” Mednick v. Albert Enterprises, Inc., 508 F.2d 297, 299 (5th Cir.1975) (quoting Bartels v. Birmingham, 332 U.S. 126, 130, 67 S.Ct. 1547, 1549, 91 L.Ed. 1947 (1947)).
In seeking to determine the economic reality of the nature of the working relationship, courts do not look to a particular isolated factor but to all the circumstances of the work activity. Rutherford Food Corp. v. McComb, 331 U.S. 722, 730, 67 S.Ct. 1473, 1476, 91 L.Ed. 1772 (1947). Certain criteria have been developed to assist in determining the true nature of the relationship, but no criterion is by itself, or by its absence, dispositive or controlling.
Among the criteria courts have considered are the following six:
*15351)the nature and degree of the alleged employer’s control as to the manner in which the work is to be performed;
2) the alleged employee’s opportunity for profit or loss depending upon his managerial skill;
3) the alleged employee’s investment in equipment or materials required for his task, or his employment of workers;
4) whether the service rendered requires a special skill;
5) the degree of permanency and duration of the working relationship;
6) the extent to which the service rendered is an integral part of the alleged employer’s business.
See Bartels v. Birmingham, 332 U.S. 126, 130, 67 S.Ct. 1547, 1549, 91 L.Ed. 1947 (1947); Rutherford Food Corp., 331 U.S. at 730, 67 S.Ct. at 1476; United States v. Silk, 331 U.S. 704, 716, 67 S.Ct. 1463, 1469, 91 L.Ed. 1757 (1947); see also Donovan v. Dial-America Marketing, Inc., 757 F.2d 1376, 1382 (3d Cir.), cert. denied, 474 U.S. 919, 106 S.Ct. 246, 88 L.Ed.2d 255 (1985); Donovan v. Brandel, 736 F.2d 1114, 1119-20 (6th Cir.1984). This court previously has held that the determination of workers’ status is a legal rather than a factual one, and therefore not subject to the clearly erroneous standard of review. Karr, 787 F.2d at 1206. The underlying facts, however, are necessarily subject to that standard. Id.
The Fifth Circuit recently discussed the types of findings involved in determining whether workers are employees within the meaning of the FLSA. Mr. W Fireworks, 814 F.2d at 1044-45. According to the Fifth Circuit, a district court makes three kinds of findings under the Act. The first are the historical findings of fact that underlie the findings regarding the six factors mentioned above. An example of such a finding in this case is the court’s finding that the migrant workers supplied their own gloves. As the Fifth Circuit found, “[i]t is beyond cavil ... that these findings of historical fact are subject to the clearly erroneous rule of Federal Rule of Civil Procedure 52(a).” Id. at 1044.
The findings as to the six factors themselves constitute the second tier of findings under the Act. The Fifth Circuit explained that these findings are “plainly and simply based on inferences from facts and thus are questions of fact that we may set aside only if clearly erroneous.” Id. The court went on to say that
[t]wo caveats are necessary, however. Although we may only set aside factual findings of the district court if we have a firm and definite conviction that a mistake has been made, this must not servé as an excuse to avoid comprehensively canvasing the record with great care. For us to do otherwise, would abrogate our role and duty as a reviewing court. Congress surely did not intend Rule 52(a) to constrict as a Victorian corset, binding the courts of appeals to the findings of the district' court absent a careful and fitting examination. Second, we must ensure that the factfinding of the district court is performed with the proper legal standards in mind. Only then can the inferences that reasonably and logically flow from the historical facts represent a correct application of law to fact. The district court’s analysis, of course, is subject to plenary review by this court, to ensure that the district court’s understanding of the law is proper.
Id. at 1044-45 (citations omitted).
The third level of findings is the district court’s ultimate conclusion as to whether the workers are employees or independent contractors. The Fifth Circuit found, as we have, that the legal effect of the fact findings is a question of law. Id. at 1045; Karr, 787 F.2d at 1206.
III. ANALYSIS
In a number of agricultural cases, albeit nonpickle cases, courts have applied the six criteria to find an employment, rather than a contractual, relationship. See, e.g., Beliz v. W.H. McLeod & Sons Packing Co., 765 F.2d 1317 (5th Cir.1985); Driscoll Strawberry Associates, 603 F.2d 748; Hodgson v. Okada, 472 F.2d 965 (10th Cir.1973). In some other cases involving migrant workers in similar circumstances, an employ*1536ment relationship was either admitted or assumed, and was therefore not an issue. See, e.g., Washington v. Miller, 721 F.2d 797 (11th Cir.1983); Bueno v. Mattner, 633 F.Supp. 1446 (W.D.Mich.1986); Alzalde v. Ocanas, 580 F.Supp. 1394 (D.Colo.1984).
In one case, however, Donovan v. Brandel, the Sixth Circuit affirmed the district court in classifying migrant workers harvesting pickles, under circumstances similar to those here, as independent contractors, not employees. 736 F.2d 1114 (6th Cir.1984). Even in its own circuit, however, that case has been narrowed and distinguished. Although Donovan v. Gillmor, 535 F.Supp. 154 (N.D.Ohio), appeal dismissed, 708 F.2d 723 (6th Cir.1982), was decided before Brandel, the pre-Brandel holding in Gillmor was thereafter reexamined by the same district court in 1986. After the Brandel decision was announced in that circuit, the district court reaffirmed its original, inconsistent, holding in an unpublished order. Brandel itself took note of the prior contrary holding in Gillmor and distinguished Gillmor on a factual basis without revealing which factual distinctions the court considered to be critical. 736 F.2d at 1120, n. 11. Although some factual differences are evident between this case and Gillmor, the situations are basically similar.6 Brandel is also similar to this case, but we view the factual similarities differently than did the Brandel court.
A. Control
The Brandel court found that the landowner, under a sharecropping arrangement, had effectively relinquished control of harvesting to the migrants. The court considered this to be a factor in its finding that the migrant workers were independent contractors. In view of the pervasive overall control retained by the defendants here, we do not reach the same finding. We view the wage arrangement as no more than a way to effectively motivate employees, and to provide a means of determining their wages.
Brandel, according to the Sixth Circuit, did not retain “the right to dictate the manner in which the details of the harvesting function are executed.” Brandel, 736 F.2d at 1119. For example, he did not appear in the fields to supervise the workers, or set hours for them to work. In this case, the defendants did occasionally visit the families in the fields. The workers sometimes referred to Michael Lauritzen as the “boss,” and some of them expressed a belief that he had the right to fire them. Moreover, unlike the Sixth Circuit, we believe that the defendants’ right to control applies to the entire pickle-farming operation, not just the details of harvesting. The defendants exercise pervasive control over the operation as a whole. We therefore agree with the district court that the defendants did not effectively relinquish control of the harvesting to the migrants. Lauritzen I, 624 F.Supp. at 968.
B. Profit and Loss
The Sixth Circuit found that the migrant workers had the opportunity to increase their profits through the management of their pickle fields. Id. Although the court found little or no evidence in the record supporting a finding that the workers were exposed to any risk of loss, it found the fact that their remuneration would increase through their management efforts to be dispositive of the profit and loss analysis. We do not agree. Although the profit opportunity may depend in part on how good a pickle picker is, there is no corresponding possibility for migrant worker loss. As the Gillmor court held, a reduction in money earned by the migrants is not a loss sufficient to satisfy the criteria for independent contractor status. 535 F.Supp. at 162. The migrants have invested nothing except for the cost of their work gloves, and therefore have no investment to lose. Any reduction in earnings due to a poor pickle crop is a loss of wages, and not of an investment. Lauritzen I, 624 F.Supp. at 969.
*1537C. Capital Investment
The capital investment factor is interrelated to the profit and loss consideration. The Gillmor court characterized the investment in this context to be “large expenditures, such as risk capital, capital investments, and not negligible items or labor itself.” 535 F.Supp. at 161. The workers here are responsible only for providing their own gloves. Gloves do not constitute a capital investment. As in Gillmor, “[everything else, from farm equipment, land, seed, fertilizer, [and] insecticide to the living quarters of the migrants is supplied by the defendants.” Id. at 162. See Lauritzen I, 624 F.Supp. at 969. Although in Brandel the migrant furnished the pails, the Brandel court minimized this factor by saying that in pickle harvesting by hand there is no need for heavy capital investment by the worker, and the overall size of the investment by the employer relative to that by the worker is irrelevant. 736 F.2d at 1118-19. To the contrary, we believe that the migrant workers’ disproportionately small stake in the pickle-farming operation is an indication that their work is not independent of the defendants.
D. Degree of Skill Required
Although a worker must develop some specialized skill in order to recognize which pickles to pick when, this development of occupational skills is no different from what any good employee in any line of work must do. Skills are not the monopoly of independent contractors. See Lauritzen I, 624 F.Supp. at 969. The Brandel court found that a high degree of skill is involved in caring for the pickle plants and picking the pickles. 736 F.2d at 1117-18. We agree that some skill is required, but we do not find that this level of skill sets the pickle harvester apart from the harvester of other crops. The migrants’ talent and their physical endurance in the hot sun do not change the nature of their employment relationship with the defendants.
E. Permanency
Another factor in the employment analysis is permanency and duration of the relationship. The Sixth Circuit in Brandel found that the vast majority of harvesters have only a temporary relationship with the employee which suggested to the court an independent contractual arrangement. Id. Many seasonal businesses necessarily hire only seasonal employees, but that fact alone does not convert seasonal employees into seasonal independent contractors. Many migrant families return year after year. In Brandel the returning migrant families comprised as high a proportion as forty percent to fifty percent of the work force. Id. at 1117. In this case the district court found that the migrant workers did not have the sort of permanent relationship associated with employment. Lauritzen I, 624 F.Supp. at 969. Nevertheless, when the district court considered its finding in light of the economic reality of the parties’ entire work relationship, the court did not consider this one criterion to be dispositive. Although we have serious doubts about this particular district court determination in view of cases such as Beliz v. W.H. McLeod & Sons Packing Co., 765 F.2d 1317, 1328 (5th Cir.1985), we need not disturb that finding for the purposes of this case. We agree with the Gillmor court that however temporary the relationship may be it is permanent and exclusive for the duration of that harvest season. 535 F.Supp. at 162-63. One indication of permanency in this case is the fact that it is not uncommon for the migrant families to return year after year.
F. Harvesting as an Integral Part of Defendants’ Business
Another factor we consider briefly is the extent to which the service of migrants may be considered an integral part of the pickle-picking business. The district court held that the migrants’ work was an integral part of the business, as even the court in Brandel conceded. Lauritzen I, 624 F.Supp. at 969; Brandel, 736 F.2d at 1120. The defendant here takes a contrary view on appeal claiming that the record is insufficient to sustain the district court finding. It does not take much of a record to demonstrate that picking the pickles is a necessary and integral part of the pickle *1538business unless the employer’s investment, planting, and cultivating activities are only t.o serve the purpose of raising ornamental pickle vines. That result would likely disappoint all good pickle lovers.
G. Dependence of Migrant Workers
Our final task is to consider the degree to which the migrant families depend on the defendants. Economic dependence is more than just another factor. It is instead the focus of all the other considerations.
The [other] tests are aids — tools to be used to gauge the degree of dependence of alleged employees on the business with which they are connected. It is dependence that indicates employee status. Each test must be applied with that ultimate notion in mind. More importantly, the final and determinative question must be whether the total of the testing establishes the personnel are so dependent upon the business with which they are connected that they come within the protection of the FLSA or are sufficiently independent to lie outside its ambit.
Usery v. Pilgrim Equipment Co., 527 F.2d 1308, 1311-12 (5th Cir.) (emphasis in original), cert. denied, 429 U.S. 826, 97 S.Ct. 82, 50 L.Ed.2d 89 (1976). The district court held that the migrants were economically dependent on the defendants during the harvest season. Lauritzen I, 624 F.Supp. at 969. If the migrant families are pickle pickers, then they need pickles to pick in order to survive economically. The migrants clearly are dependent on the pickle business, and the defendants, for their continued employment and livelihood. Donovan v. DialAmerica Marketing, Inc., 757 F.2d 1376, 1385 (3d Cir.), cert. denied, 474 U.S. 919, 106 S.Ct. 246, 88 L.Ed.2d 255 (1985). That is why many of them return year after year. The defendants contend that skilled migrant families are in demand in the area and do not need the defendants. Were it not for the defendants the migrant families would have to find some other pickle grower who would hire them. Until they found another grower, they would be unemployed. It is not necessary to show that workers are unable to find work with any other employer to find that the workers are employees rather than contractors.
We cannot say that the migrants are not employees, but, instead, are in business for themselves and sufficiently independent to lie beyond the broad reach of the FLSA. They depend on the defendants’ land, crops, agricultural expertise, equipment, and marketing skills. They are the defendants’ employees.
IV. CONCLUSION
No trial is needed to sort out the material facts in these circumstances in order to come to the conclusion of law that these migrant workers are employees, entitled to the protection of the FLSA. The purpose of the Act is to protect employees from low wages and long hours, and “to free commerce from the interferences arising from the production of goods under conditions that were detrimental to the health and well-being of workers.” Rutherford Food Corp. v. McComb, 331 U.S. 722, 727, 67 S.Ct. 1473, 1475, 91 L.Ed. 1772 (1971). In this case, for example, some children under twelve years of age are in the fields. Although there is no suggestion in the record that the defendants are abusing the children in any way, the child labor provisions of the Act are intended for their benefit. It may be that the defendants’ pickle operation is exemplary and conducted pursuant to standards even higher than those of the FLSA, but that does not allow the defendants to circumvent the Act. Neither does the defendants’ gloomy prediction that application of the Act will have a devastating economic impact on the pickle business relieve them from complying with the Act’s provisions. In any event, that argument is one for the Congress, not the courts. The basic arrangement between the defendants and the pickle pickers which, according to the defendants, produces the highest economic return for both grower and picker, need not be altered. All that need change is the label which the defendants apply to the arrangement. The defendants need only think of the proceeds *1539paid to the pickle pickers as wages, keep the necessary records, and make sure they abide by the protections that the Act accords to working children.7
Affirmed.

. 29 U.S.C. § 201 et seq.

. All the parties refer to the crop to be harvested as the "pickle crop,” and so shall we. Perhaps the defendants have developed a remarkable new "pickle” seed. But whether they grow pickles or only potential pickles in the form of cucumbers, the law is the same.

. The absence of defendants' counsel at the depositions was the fault of the defendants or of their counsel, who was later replaced. The government, however, gave the usual notice to take the depositions in Texas where the migrant workers were then located.

. Fed.R.Civ.P. 56(c).

. The Act defines an employee simply as "any individual employed by an employer.” 29 U.S. C. § 203(e)(1). An "employer” is defined to include “any person acting directly or indirectly in the interest of an employer in relation to an employee." 29 U.S.C. § 203(d). To "[ejmploy includes to suffer or permit to work." 29 U.S.C. § 203(g).

. In Gillmor the migrants did harvest crops other than pickles, for which they were paid additional sums. They always worked exclusively for the one employer.

. We acknowledge the brief of amicus curiae filed by Legal Action of Wisconsin, Inc., supporting the view that the migrant harvesters are employees, not independent contractors.