The Court essentially adopted the District Court’s opinion,
which is summarized briefly here.
" Whether an employment relationship exists
under a given set of circumstances is not fixed by labels that parties may
attach to their relationship nor by common law categories nor by
classifications under other statutes." . . . Rather, courts focus on the "
economic reality" of the relationship between the parties to determine
whether it is an employment relationship. Id. " [I]n distinguishing
between employees and independent contractors, courts have focused on whether,
as a mater of economic reality, the worker is economically dependent upon the
alleged employer or is instead in business for himself."
Permanency and Duration of Relationship.
This factor was essentially neutral because the harvest only lasted 45
days. Some of the workers had part-time
and temporary jobs elsewhere, but most worked full-time picking cucumbers for
the 45 days. Almost 70% of the workers
had worked on the farm during the prior year’s harvest as well.
Degree of Skill. This factor weighed in favor of employment. While the workers would report problems with
the plants to the farm owner (such as the plants require water or fertilizer or
insecticide), they performed very little care for the plant (such as weeding,
watering, trellising, etc.) and therefore, required very little experience or
training. The workers could be trained
in one hour how to harvest pickles, but – like anything else -- would become
more efficient with experience.
Worker’s Investment. This
factor likewise weighed in favor of employment.
The owner’s investment dwarfed that of the workers, who sometimes
supplied their own rubber gloves and wheelbarrows. The owner supplied collection boxes,
forklifts, and hoes. The Court only considered the farm’s investment during the
harvest, rather than all of its prior investments.
Opportunity for Profit. This
factor also weighed in favor of employment because the workers bore no risk of
financial loss, other than making poor use of their time (which is not an issue
the Court was willing to credit).
Workers were paid
according to how many pickles they picked. They had no input into selecting a
buyer or negotiating a price for the pickles. Under the system in place,
workers could simply increase their wages by working longer, harder, and
smarter--this does not constitute an opportunity for profit.
Defendant’s control. This
factor weighed slightly in favor of employment. In some cases, workers are contractors when
they enter into sharecropping relationships to control a piece of land, set
their own schedules and direct the owner when to plant in order to accommodate
the workers’ schedules. In others,
workers are employees when the owner supervised the harvest, hired, fired and
assigned rows to workers. In this case,
the workers set their own schedules and picked their own harvesting plots. The owner supervised the harvest, but not
closely. However, the owner retained
control over the timing of the harvest and care of the plants.
Services as integral part of defendant’s business.
This weighed heavily in favor of employment because the defendant
derived 84% of his income from pickle farming.
The Court refused to consider whether the workers were economically
dependent on the defendant’s farm as part of this factor.
The factors weigh
in favor of a finding that the workers were employees, and the record supports
a finding that the workers were dependent on Defendant, rather than in business
for themselves. This was not a sharecropper relationship as in Brandel,
but rather an employment relationship in which the workers' wages were
dependent upon their production. Such a payment structure, on its own, does not
transform an employee into an independent contractor. The " economic
reality" of the situation indicates an employer-employee relationship.
The DOL had not
moved for summary judgment yet on payment of minimum wages. The farm had previously agreed to split the profit from the sale of the pickles.
The DOL also obtained
summary judgment on the owner failing to keep a record of hours worked each
day. Instead, the owner had asked each
worker how many hours he worked that week to determine their hourly
earnings. This constituted a violation
of the FLSA.
NOTICE: This summary is designed merely to inform and alert you
of recent legal developments. It does not constitute legal advice and does not
apply to any particular situation because different facts could lead to
different results. Information here can be changed or amended without
notice. Readers should not act upon this information without legal advice. If
you have any questions about anything you have read, you should consult with or
retain an employment attorney.
