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Acosta v. Bland Farms Production & Packing, LLC

United States District Court, S.D. Georgia, Statesboro Division

July 31, 2017

R. ALEXANDER ACOSTA, Secretary of Labor, United States Department of Labor, Plaintiff,
v.
BLAND FARMS PRODUCTION & PACKING, LLC and DELBERT BLAND, Defendants.

          ORDER

          J. RANDAL HALL, CHIEF JUDGE

         Under the Fair Labor Standards Act, employers must generally pay their employees overtime wages when the employees work more than 40 hours in a week. 29 U.S.C. § 207(a)(1). Employees "employed in agriculture, " however, are not entitled to overtime wages. 29 U.S.C. § 213(b) (12). This case is primarily about whether Defendant Bland Farms Production and Packing, LLC's employees were "employed in agriculture" when they processed Vidalia onions grown by farmers other than Bland Farms Production and Packing, LLC.

         The Court held a bench trial the week of February 6, 2017. The Court heard evidence from both sides and now, in accordance with Federal Rule of Civil Procedure 52(a)(1), makes its findings of fact and conclusions of law. In short, the Court finds that Bland Farms Production and Packing, LLC failed to pay its employees overtime in violation of the FLSA. The Court awards back wages and a reduced amount of liquidated damages but declines to issue an injunction. The Court also finds that Defendant Delbert Bland is not liable in his individual capacity.

         I. Findings of Fact

         Delbert Bland owns Bland Farms, LLC, which owns Defendant Bland Farms Production and Packing, LLC ("Bland Farms'') . Delbert Bland began growing onions in the early 1980s. His first field of onions was only 5 acres. And he sold that crop out of a carport. Since then, Bland Farms has become the largest producer of sweet onions in the country, selling around 2 million 40-pound boxes of Vidalia onions a year. As part of its operation, Bland Farms runs a packing shed where employees process and package onions grown by Bland Farms and by other onion farmers.

         Not long after he began growing onions, Delbert Bland had his first run-in with the Department of Labor. The DOL questioned whether Bland Farms properly paid its packing-shed employees. In response to the DOL's probe, Delbert Bland wrote the DOL requesting guidance on when Bland Farms was and was not required to pay overtime wages to its packing-shed employees. A DOL official replied, stating essentially that the FLSA's agriculture exemption would apply to the packing-shed employees as long as they were processing onions grown by Bland Farms or onions that Bland Farms purchased in the field, so long as Bland Farms purchased the entire field of onions.

         In 2013, the DOL began investigating whether Bland Farms was improperly denying its packing-shed employees overtime wages. The DOL eventually filed this lawsuit alleging that Bland Farms' practices violated the FLSA because it did not pay its packing-shed workers overtime wages during the 2012, 2013, 2014, 2015, and 2016 Vidalia onion seasons when those employees processed onions grown by farmers other than Bland Farms.[1]

         A. Growing Onions

         Farming Vidalia onions is a tedious job. First, a farmer must prep and sow a seedbed. Then, once the onion plants in the seedbed grow to roughly "the size of a No. 2 pencil, " the farmer will pull the plants out of the ground and replant them in another field, where they will grow to maturity. While the plants are in the field, the farmer must routinely treat them with fertilizer, pesticides, herbicides, and water. When it comes time to harvest the onions, the farmer must undercut the onions and let them dry in the field. The onions are then removed from the field by hand and placed in bins. During this process, the tops of the onions are clipped off. The onions are then dried in mechanical dryers before they are graded, packed, and shipped. From start to finish, the process takes roughly eight months.

         B. Contract Growers

         During the 2012, 2013, 2014, 2015, and 2016 Vidalia onion seasons, Bland Farms processed onions in its packing shed grown on land that it owned and leased and onions grown on land owned and leased by other onion growers ("contract growers"). These contract growers include Brett Williams, Ashley Day, Mike Collins, Morgan Right, Jerry Pittman, Jamie Beasley, Bruce Herndon, and Ronnie McLeod. The contract growers all contracted to sell onions to Bland Farms, agreeing that they would grow the onions, which Bland Farms would later process and sell.

         The contract growers were in charge of preparing the seedbeds, planting the onions, transplanting the onions, fertilizing the onions, spraying herbicides and pesticides, irrigating the onions, and harvesting the onions. The contract growers paid all the expenses of growing the onions, including the seed, fertilizer, herbicide, pesticide, and labor costs. I Bland Farms would occasionally provide labor to the contract growers and would often help the contract growers haul the onions out of the field. And Bland Farms would, when necessary, advance the contract growers cash. But Bland Farms always charged the contract growers for any assistance it provided and would recoup all cash advances when it sold the onions.

         In most cases, Bland Farms purchased the onions from the contract growers based on a pack-out rate, meaning the amount of money a contract grower received from Bland Farms depended on how well his onions graded. Thus, for example, if 70% of a contract grower's onions graded marketable, the contract grower would receive payment only for those onions. The contract grower would not receive payment for the remaining 30%, which would be discarded because it is difficult to find a market for low-quality onions. Occasionally, Bland Farms purchased onions based on an across-the-scales method, meaning it paid a set rate for all the onions regardless of how they graded.

         The risk of loss, moreover, was on the contract growers throughout the entire growing process. The contract growers carried their own crop insurance to address the risk of weather-or disease-related losses. Bland Farms took no responsibility for the onions until it purchased them. And even then, as noted, Bland Farms was generally required to pay for only marketable onions. So the contract growers also assumed the risk that their onions would grade below marketable.

         C. Omar Cruz's Input

         Omar Cruz, Bland Farms' Director of Farm Production and Chief Agronomist, is in charge of onion production and quality control. He is essentially tasked with ensuring that Bland Farms has high-quality onions to sell. Mr. Cruz therefore provided the contract growers advice about how to best grow onions during the years they sold onions to Bland Farms.

         Mr. Cruz suggested seed varieties for the contract growers to plant, helped them choose what chemicals to apply, suggested harvest times, and provided other advice throughout the growing process. The contract growers typically tried to follow Mr. Cruz's advice because they trusted Mr. Cruz's opinion and because, as Brett Williams put it, they "looked at Bland Farms as the customer" and tried to grow onions that met Bland Farms' standards. But they were not required to follow Mr. Cruz's advice, and the contract growers made the final decisions about how they grew their onions. The contract growers, and not Bland Farms, owned the onions. Ashley Day, for example, was questioned during trial about why he had the final say about what type of seed to plant, how many onions to grow, and when to harvest his onions. And he responded each time, "Because they're my onions." In short, although Mr. Cruz provided the growers with important input, he did not control the contract growers' operations: he could not require the contract growers to perform any task or follow his instructions. Rather, Mr. Cruz made suggestions to the farmers, which they typically followed. But he did this to ensure that Bland Farms would be able to purchase the number of quality onions that it needed, not to protect crops owned or grown by Bland Farms.

         D. "Spot" Purchases

         A few times during the relevant years, Bland Farms purchased onions from growers other than the contract growers. In 2012, Bland Farms purchased onions from Maurice Collins, who was having trouble finding a buyer. Although Bland Farms did not need more onions that year, it purchased Mr. Collins's onions because Mr. Collins, a longtime friend, was "in a bind." In 2013, Bland Farms purchased onions from Ashley Day because, like Mr. Collins, Mr. Day was in a bind that year.[2] Bland Farms also purchased onions from R.T. Stanley because Mr. Stanley did not have labor available to harvest a field of onions and Bland Farms did, so it seized the opportunity to buy more onions. These purchases were not made because of production shortfalls, and Bland Farms did not pay its packing-shed employees overtime wages when they processed these onions.

         E. 1985 Letters

         In February 1985, Delbert Bland wrote a letter to the DOL requesting guidance about when Bland Farms had to pay its packing-shed employees overtime wages. In his letter, Delbert Bland noted that there had "been a question concerning the difference in Agriculture [versus] Non-Agriculture in relation to buying onions in the field or at the packing shed . . . ." Delbert Bland wanted clarification about whether Bland Farms had to pay its packing-shed employees overtime wages when the employees processed onions that Bland Farms purchased from other growers.

         The next month, Alfred Perry, a DOL official, responded. After briefly explaining the FLSA's ...


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