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Jimenez v. GLK Foods LLC

United States District Court, E.D. Wisconsin

May 23, 2016

ALEJANDRO JURADO JIMENEZ et al., Plaintiffs,
v.
GLK FOODS LLC and RYAN A. DOWNS, Defendants. AND JOSE ENRIQUEZ RAMIREZ et al., Plaintiffs,
v.
GLK FOODS LLC and RYAN A. DOWNS, Defendants.

          CONSOLIDATED DECISION AND ORDER ON MOTIONS FOR PARTIAL SUMMARY JUDGMENT

          William C. Griesbach, Chief Judge

         These related class actions arise out of the recruitment and employment of Mexican migrant workers as “trim-line laborers” to process raw cabbage into sauerkraut at a facility owned by Defendant GLK Foods, LLC, in Bear Creek, Wisconsin. Defendant Ryan Downs is an owner and president of GLK. Over the years, GLK applied for and was granted authorization to employ the workers under the federal government’s “H-2B” guest-worker visa program. See 8 U.S.C. § 1101(a)(15)(H)(ii)(b). Alexandro Jurado Jimenez et al. brought Case No. 12-cv-209 (hereinafter “the Jimenez case”) on behalf of approximately 210 migrant workers who worked at the cannery during one or more of the 2006 through 2011 late summer/early fall seasons, with the exception of 2009 when GLK missed the deadline for its application for authorization to import H-2B workers. Jose Enriquez Ramirez et al. brought Case No. 12-cv-210 (“the Ramirez case”) on behalf of approximately 35 other H-2B workers who were recruited by GLK in 2011, but then not provided jobs after they had incurred the expenses of obtaining visas and traveling to the Mexican-United States border for transportation to the job site. The cases are before the Court on various motions for partial summary judgment.

         In a previous decision, the Court granted in part the motion for summary judgment of the Plaintiffs in the Jimenez case on their claim that Defendants violated the Fair Labors Standards Act (FLSA), 29 U.S.C. §§ 201-219, by failing to reimburse certain travel expenses, visa fees and border crossing expenses to the extent necessary to prevent the first week wages of the 2010 and 2011 workers from falling below the federal minimum wage. (ECF No. 119.)[1] The Plaintiffs in both cases (collectively “Plaintiffs”) and the Defendants (“GLK”) have now filed cross motions for summary judgment on several of the remaining claims, which arise under the Migrant and Seasonal Agricultural Worker Protection Act (AWPA), 29 U.S.C. §§ 1801-1871, the Wisconsin Migrant Labor Act (WMLA), Wis.Stat. §§ 103.90-.97, Wisconsin’s wage payment and living wage laws, [2]and the State’s common law governing contract. This Decision and Order will address all pending motions in these two cases. For the reasons that follow, Plaintiffs’ motions will be granted in part and denied in part, and GLK’s motions will be denied.

         I. BACKGROUND

         GLK is the largest producer of sauerkraut in the world. (Pls.’ Consolidated Statement of Undisputed Facts (PSUF) ¶ 1, ECF No. 117.) Defendant Ryan Downs was an owner and the president of GLK at all times relevant to these cases. GLK is a family-owned, agriculturally-dependent business that processes more than 120, 000 tons of raw cabbage into sauerkraut annually and sells its product under brand names including Cortland Valley, Silver Floss, and Krrrrisp Kraut, among others. (Ryan A. Downs Dep. Tr. 34:22-23, ECF No. 117-3.) GLK has operations in the state of New York and in Bear Creek, Wisconsin. This case involves workers hired at GLK’s sauerkraut cannery plant in Bear Creek, Wisconsin.

         At the Bear Creek plant, raw cabbage grown at GLK farms and elsewhere is dumped by trucks into a yard. After field waste is separated out, each individual head of cabbage is “cored” using a machine operated by an individual person. The heads of cabbage are then fed from the coring machines into a cleaner that sprays high-pressure water and tumbles the cabbage to remove outer leaves and dirt. The cabbage is then inspected and trimmed before being shredded into coleslaw, salted and put in vats for fermentation. (Downs Dep. Tr. 6-10.) This cutting and coring work is known as “trim-line” labor.

         GLK requires trim-line laborers during the “cutting season” of the sauerkraut production process. Although the cutting season generally takes place from August to November, the beginning of a given season is a function of when farmers are able to harvest their cabbage crops in a particular year, based largely on weather conditions, and the end date is a function of how much cabbage the harvest yields.

         Historically, GLK has employed migrant workers from Mexico as trim-line laborers. According to Downs, this is because it is difficult to find quality local workers who do not already have full-time employment. (Id. at 11:19-20.) By the 1990s, GLK was hiring many of its trim-line laborers from a small Mexican village called Santiago Capitiro in the state of Guanajuato. This occurred through the recruiting efforts of Rafael Jimenez Arroyo, a full-time GLK employee who was originally from that village. Arroyo has worked at GLK since 1992 and has proved to be a reliable worker. Downs also describes GLK’s arrangement with workers from Arroyo’s hometown as “a matter of reliability”: “You knew that you had a source of workers and that you could count on them. Plus, Rafael had a lot of his cousins and whatnot from his village who had come. We got to know them well. They came, many, year after year. It was comfortable for both parties.” (Id. at 17:10-16.) Although Arroyo handled official recruiting activities, in the late 1990s and early 2000s Downs also traveled to Santiago Capitiro, sometimes bringing his family, both for a vacation and to get to know his workers.

         In order to bring trim-line laborers from Santiago Capitiro to Bear Creek, Wisconsin, GLK was required to comply with the H-2B program, the temporary work visa program for non-agricultural workers which grew out of the Immigration Reform and Control Act of 1986 (IRCA), 8 U.S.C. § 1101(a)(15)(H)(ii)(a)-(b). H-2 visas are granted to temporary workers from foreign countries to supplement the domestic labor market. See Mathes, Charles C., The Department of Labor’s Changing Policies Toward the H-2B Temporary Worker Program: Primarily for the Benefit of Nobody, 80 Fordham L. Rev. 1801, 1807-808 (2012) (hereinafter Mathes). The essential purpose of the H-2 program is “to permit employers to utilize temporary foreign workers if U.S. workers could not be found and if the use of such workers would not adversely affect the wages or working conditions of similarly employed domestic workers.” Mathes at 1807. The IRCA divided the H-2 visa into two separate categories: the H-2A visa for temporary agricultural workers and the H-2B visa for temporary non-agriculture workers.[3] In enacting the IRCA, Congress provided greater protection to H-2A workers because it viewed them as more susceptible to exploitation. Mathes at 1807-08.

         In order to participate in the H-2B program, the employer must file a prevailing wage request with the DOL.[4] The DOL then makes a prevailing wage determination (PWD) for the particular job position the employer needs filled. The employer is then required to advertise the position to all potential workers at a wage at least equal to the PWD. 20 C.F.R. § 655.10. If insufficient U.S. workers apply, the employer then files an Application for Temporary Employment Certification with the DOL. (ECF No. 87-3, 4.) If after complying with all of the regulatory requirements, the DOL is satisfied that there are insufficient U.S. workers qualified for the H-2B position, the DOL certifies the employer’s need for foreign workers for the period requested. The employer then petitions U.S. Citizenship and Immigration Services within the Department of Homeland Security to grant the visa application. Mathes at 1809-10. If the petition is granted, the employers either directly or through local recruitment agencies begin the process of recruiting the workers in their home countries.

         Although GLK recruited workers directly through Arroyo’s actions, GLK also contracted with employment agencies specializing in the H-2B program to assist with submitting its H-2B petition to the U.S. Department of Labor, helping workers obtain temporary work visas, and transporting workers from Mexico to Wisconsin. GLK hired 75, 74, and 90 trim-line laborers through the H-2B program in 2006, 2007, and 2008, respectively. (PSUF ¶¶ 40-42.) Exactly what these workers were told prior to beginning their employment in Wisconsin is not clear from the record. Downs testified that Arroyo was given “a set of rules he had to abide by regarding disclosure of work conditions, wages, all of the things that the federal and state government require of us.” (Downs Dep. Tr. 19:10-13.) However, Arroyo himself testified (through an interpreter) that at one point in time he was overseeing GLK’s recruiting in Mexico by telephone and without even leaving Wisconsin. (Rafael Jimenez Arroyo Dep. Tr. 46-47, ECF No. 117-7.) Additionally, even when he personally traveled to Santiago Capitiro, it is not clear what Arroyo told workers. He testified that he told prospective workers “[w]hen the season was going to start more or less and when it would end” (id. 41:12-13) (he could not know the exact dates at the time of his recruiting trips in the spring because they would depend on weather and growing conditions), and he also testified that he did not always provide complete information to recruits because many had been coming to GLK to work for years and knew the arrangement. (Id. 42.)

         In any event, it is stipulated for purposes of summary judgment in these cases that neither GLK, nor any agent working on its behalf, provided H-2B workers hired in 2006-2008, or 2010 or 2011 with written disclosures of terms of employment or with written employment contracts as required by the AWPA and the WMLA. (Defs.’ Resp. to PSUF ¶ 163, ECF No. 126.) Notwithstanding these infractions, discussed in more detail below, GLK’s arrangement with the workers from Santiago Capitiro appears to have remained mutually beneficial at least until 2010 and 2011. As noted above, many of the same workers had been coming to Wisconsin to work GLK’s cutting season for years. And although it missed the deadline to import foreign workers in 2009, GLK returned to Mexico to recruit H-2B workers in 2010.

         GLK received authorization to hire 110 and 143 H-2B workers in 2010 and 2011 respectively. (See 2010 & 2011 Applications for Temporary Employment Certification, Exs. 8 & 9 to PSUF, ECF Nos. 117-8 & 117-9.) In these years, as had become his practice, Arroyo maintained a list of prospective workers from Santiago Capitiro. Although some details regarding this list are not clear or are in dispute, [5] it is not disputed for present purposes that Arroyo or someone else at GLK placed the names of all workers who had been offered and accepted employment for 2010 and 2011 on the list. (Defs.’ Resp. to PSUF ¶¶ 51-52.) GLK offered these workers employment subject to the condition that they obtain visas. Those who accepted were given instructions for obtaining H-2B visas. Visa appointments were scheduled for workers at the U.S. consulate in Mexico City in 2010 and the border city of Matamoros in 2011. GLK does not dispute that its understanding and the workers’ understandings were that upon issuance of a visa to any worker in these years, the trim-line laborer job was his. (Id. ¶ 53.) From GLK’s perspective, receipt of a visa constituted acceptance of the job offer. (Id. ¶ 62.)

         In order to obtain these visas, workers in 2010 and 2011 paid their expenses for travel from their homes in Santiago Capitiro to the U.S. Consulate in Mexico City (193 miles) and/or Matamoros (600 miles), fees to a “licenciado” for help with visa paperwork, visa application fees, and other expenses.[6] They then traveled to Matamoros where, upon payment of a fee, they crossed the border and boarded buses provided by GLK for the trip to Bear Creek, Wisconsin.

         GLK recruited and hired 86 and 135 H-2B workers in 2010 and 2011 respectively. (PSUF ¶¶ 46, 48.) Except for 43 workers whose visas would be cancelled before departing from Mexico in 2011, all of these workers traveled to Wisconsin to work. While the workers were in Bear Creek, it is undisputed that GLK issued payroll checks based upon the applicable prevailing wage for all hours they worked. GLK also provided room and board for the workers, payment for which it deducted from their paychecks.

         In both 2010 and 2011, GLK terminated the workers’ employment after eight weeks of work or less, and transported them back to the border. In its Applications for Temporary Employment Certification, GLK had indicated a “Period of Intended Employment” from August 9 to November 30 in 2010 and from August 1 to November 15 in 2011. (Exs. 8 & 9 to PSUF.) Each application was certified by DOL for a “validity period” corresponding to these dates. The 2010 application was certified in May and the 2011 application was certified in June. In addition to the “Period of Intended Employment, ” and other information about GLK’s job offer and about GLK’s unsuccessful efforts to recruit U.S employees, the Applications required GLK to certify a number of conditions of employment. One such condition stated: “During the period of employment that is the subject of the labor certification application, the employer will comply with applicable Federal, State and local employment-related laws and regulations, including employment-related health and safety laws.” (Exs. 8 & 9 at B.1.) Another condition provided that “Unless the H-2B worker is being sponsored by another subsequent employer, the employer will inform H-2B workers of the requirement that they leave the U.S. at the end of the period certified by the Department or separation from the employer, whichever is earlier, as required under [20 C.F.R. § 655.35], and that if dismissed by the employer prior to the end of the period, the employer is liable for return transportation.” (Exs. 8 & 9 at B.2.)

         Prior to the arrival of the 2010 workers at GLK’s Bear Creek facility, northeast Wisconsin experienced major rains. Flooding in Outagamie County had caused an outbreak of black rot that decimated GLK’s cabbage crop. The ultimate yield in 2010 was 20% of what GLK had planned for. (Defs.’ Statement of Proposed Material Facts (DSPMF) ¶ 24, ECF No. 111.) The damage to the crop was known to GLK by at least the end of July, and perhaps earlier. (PSUF ¶ 104.) With what was left of the crop dying, GLK hired temporary trim-line laborers from the United States to try to salvage what it could. (Downs Dep. Tr. 49-50.) According to Downs, the crop “was rotting so fast that I think in late July-which is the earliest we ever started-we [hired temps] to try to salvage something out of some of the fields.” (Id. at 49:25-50:3.) With the validity period of the H-2B workers approaching, GLK initially decided to bring up only about half of the 86 workers who had obtained visas in that year. That decision was later reversed, and GLK brought up all of the workers by about August 17. (PSUF ¶¶ 92, 106.) Ultimately, however, there was not enough work to keep the workers employed for a normal August-to-November cutting season. About half of the workers were sent home on September 16, and the remaining workers’ last day of work was October 26. (PSUF ¶¶ 93-94.) GLK provided return transportation for these workers to Laredo, Texas on the U.S.-Mexico border, but not from the border to Santiago Capitiro. These workers were paid the prevailing wage certified in the Application for Temporary Employment Certification of $7.85, but the workers received no compensation for the portion of the “validity period” that they did not work, and GLK never reimbursed these employees for any of the pre-employment expenses they had incurred.

         The 135 H-2B workers who obtained visas in 2011 were scheduled to depart Mexico around August 5. One group left Mexico on that date, and a second left Mexico around August 19. A third group of 35 workers never left Mexico. GLK does not dispute that these workers had obtained visas and accepted GLK’s offer of employment. (Defs.’ Resp. to PSUF ¶¶ 58-59.) The prevailing wage certified in the 2011 Application was $10.36, which was a rate increase GLK learned about upon receiving the DOL’s certification in June. (DSPMF ¶ 32.) Around the time GLK was transporting the first two groups of workers to Wisconsin, however, DOL notified GLK that the prevailing wage applicable to the 2011 workers would be increased again, this time to $14.68, which was an 87% increase from the previous year. (Id.) After unsuccessfully appealing the wage increase and faced with another disappointing harvest of only 70% of plan, GLK determined it was no longer economically viable to employ H-2B workers. (Id. ¶¶ 32-33.) On September 1, 2011, GLK asked the U.S. Consulate in Mexico to cancel the visas for the workers who had not yet departed and sent word to the workers that their services would not be needed the following day. (PSUF ¶¶ 66-67.) The workers who had been brought up were all sent home by September 28. (Id. ¶ 97.) GLK provided return transportation for these workers to Laredo and it paid them $10.36 for the hours they did work. It did not provide transportation all the way home for these workers or for the ones whose visas had been cancelled, and it did not reimburse any of these workers for their pre-employment expenses. The $14.68 wage increase never went into effect.

         II. ANALYSIS

         Plaintiffs seek summary judgment as to liability and damages[7] on their claims that GLK failed to disclose terms of employment as required under the AWPA and WMLA in 2006, 2007, 2008, 2010, and 2011, failed to provide work agreements as required under the WMLA in the same years, took unauthorized deductions from workers’ paychecks in violation of the WMLA in 2011, and failed to make and keep records of workers’ permanent addresses in violation of the AWPA in 2011. (ECF No. 113.)[8]

         Plaintiffs also seek summary judgment as to liability only on their claims alleging GLK failed to employ the 2010 and 2011 workers for the promised term of employment, failed to pay the same workers a prevailing wage, and failed to provide the workers return transportation to their homes in Mexico, all in violation of the AWPA, WMLA, breach of contract, and Wisconsin’s living wage law. (ECF No. 115; No. 12-cv-210, ECF No. 66.)[9] GLK seeks summary judgment in its favor on the AWPA, breach of contract and living wage claims arising out of its early termination of the 2010 and 2011 workers’ employment and the alleged failure to pay a prevailing wage. (ECF No. 109; Case No. 12-cv-210, ECF No. 60.)

         Summary judgment is appropriate when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to summary judgment as a matter of law. Fed.R.Civ.P. 56(c). All reasonable inferences are construed in favor of the nonmoving party. Foley v. City of Lafayette, 359 F.3d 925, 928 (7th Cir. 2004).

         A. Statutory Framework

         1. AWPA

         The AWPA was enacted in 1983 with the express purpose “to assure necessary protections for migrant and seasonal agricultural workers, agricultural associations, and agricultural employers.” 29 U.S.C. § 1801. Like its predecessor, the Farm Labor Contractor Registration Act (FLCRA), the AWPA is a remedial statute and thus must be broadly construed to effectuate its purpose. Renteria-Marin v. Ag-Mart Produce, Inc., 537 F.3d 1321, 1325 (11th Cir. 2008) (“We have recognized that AWPA is a remedial statute and should be construed broadly to effect its humanitarian purpose.”); De La Fuente v. Stokely-Van Camp, Inc., 713 F.2d 225, 234 (7th Cir. 1983) (“We note as an initial matter that FLCRA is a remedial statute and should be construed broadly.”).

         The AWPA requires any “agricultural employer” who recruits any “migrant agricultural worker” to disclose in writing the terms of employment, including, inter alia, the place of employment, wage rates to be paid, and the “period of employment, ” at the time of recruitment. 29 U.S.C. § 1821(a). The written disclosure must be in a language understood by the recruited worker. 29 U.S.C. § 1821(g). The obvious purpose of this provision is to make sure, to the extent possible, that the workers will have “complete information about where they are going and what the conditions will be when they arrive, before they begin the journey.” H.R. Rep. (Education and Labor Committee) No. 97-885, 97th Cong., 2nd Sess., reprinted in, 1982 U.S.C.C.A.N. 4547, 4560.

         The AWPA also requires an agricultural employer who employs any migrant agricultural worker to “pay the wages owed to such worker when due” and prohibits the employer from violating “the terms of any working arrangement” made by the employer with the worker “without justification.” 29 U.S.C. § 1822(a), (c). Agricultural employers must make, keep and preserve for three years records showing, inter alia, the basis on which wages were paid, the number of hour worked, the total earnings, the specific sums withheld and why, and the net pay for each worker. 29 U.S.C. § 1821(d). DOL regulations additionally require the agricultural employer to make and keep a record of each migrant worker’s permanent address. 29 C.F.R. § 500.80(a).

         2. WMLA

         The WMLA was enacted in 1977 with the intent of improving the status of migrant workers in the State. Laws of 1977, Ch. 17, § 1. Like the AWPA, the WMLA requires any person who recruits migrant workers for employment in the State to provide each worker with a written disclosure of the terms and conditions of the offered employment in a language understood by the worker. The WMLA also requires employers of migrant workers to provide each worker with a written “work agreement” in a language understood by the worker at the time of hiring. Wis.Stat. § 103.915(1)(a) & (b). The “work agreement” must include “a statement of the place of employment, kind of work available, applicable wage rates, pay period, approximate hours of employment including overtime applicable, term of employment including approximate beginning and ending dates, kind of housing and any charges in connection therewith, cost of meals if provided by employer, transportation arrangements, the names of all persons in the family employed if a family is employed and any other charges or deductions from wages beyond those required by law.” Wis.Stat. § 103.915(4)(a).

         The “work agreement” required under the WMLA must also include “a guarantee of a minimum of 20 hours of work in a one-week period or a minimum of 64 hours of work in a 2-week period” over the entire period of employment “from the date the worker is notified by the employer to report for work, which date shall be reasonably related to the approximate beginning date specified in the work agreement, or the date the worker reports for work, whichever is later, and continuing until the final termination of employment, as specified in the work agreement, or earlier if the worker is terminated for cause or due to seriously adverse circumstances beyond the employer’s control.” Wis.Stat. § 103.915(4)(b). In the event a migrant worker reports for work as notified by an employer, but is never employed due to “seriously adverse circumstances beyond the employer’s control, ” the WMLA nevertheless requires that employer to pay the worker wages at the offered rate of pay from the time of the worker’s point of departure from home or elsewhere to his return, but in no event “not less than 3 nor more than six days’ pay at 8 hours per day.” Wis.Stat. § 103.915(5). The Wisconsin Department of Workforce Development (DWD) makes standard form contracts available for use by employers, or employers may use a different form if approved by DWD. Id. § 103.915(2).

         B. Violations of Disclosure, Work Agreement, Record Keeping, and Wage Deduction Requirements of the APWA and WMLA

         There is no dispute that GLK and the H-2B workers it hired for work at GLK’s Bear Creek cannery are covered by the AWPA and the WMLA. See 29 U.S.C. § 1802(2), (3) & (8); Wis.Stat. § 103.90(5)(a). As noted above, Plaintiffs argue they are entitled to summary judgment that GLK violated these provisions when it (1) failed to disclose terms of employment in 2006, 2007, 2008, 2010, and 2011, (2) failed to provide work agreements in the same years, (3) took unauthorized deductions in 2011, and (4) failed to make and keep records of workers’ permanent addresses in 2011.

         GLK has stipulated to most of the facts underlying these claims. GLK does not dispute that it failed to provide written disclosures of work terms or work agreements to any workers, and that it failed to make and keep records of the permanent addresses of the named plaintiffs in Jimenez. (Defs.’ Resp. to PSUF, ECF No. 121, ¶¶ 163, 191.) Accordingly, with respect to liability on the first second, ...


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