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Secretary of Labor v. Lauritzen

decided: December 15, 1987.

SECRETARY OF LABOR, UNITED STATES DEPARTMENT OF LABOR, PLAINTIFF-APPELLEE,
v.
MICHAEL LAURITZEN AND MARILYN LAURITZEN, INDIVIDUALLY AND DOING BUSINESS AS LAURITZEN FARMS, DEFENDANTS-APPELLANTS



Appeal from the United States District Court for the Eastern District of Wisconsin, No. 84 C 980 - Terence T. Evans, Judge.

Wood, Jr., Flaum, and Easterbrook, Circuit Judges.

Author: Wood

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 Lauritzen, are employees for purposes of the Fair Labor Standards Act of 1938 ("FLSA"),*fn1 or are instead independant contractors not subject to the requirements of the Act.*fn2 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 enforce 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.*fn3 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 form 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. ยง 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.

All 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 the 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 how 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 counteraffidavits 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." They "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 Lauritzen, 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 agains the requirements of disposition by summary judgment,*fn4 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, 78 L. Ed. 2d 262, 104 S. Ct. 284 (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 employment*fn5 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, 89 L. Ed. 301, 65 S. Ct. 295 (1944); 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, 91 L. Ed. 1947, 67 S. Ct. 1547 (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, 91 L. Ed. 1772, 67 S. Ct. 1473 (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:

1) 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 required 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 ...


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