June 8, 2023

Ninth Circuit Rules Ag Marketing Companies Not Liable for Workers’ Wages

A group of agricultural workers who sued a pair of strawberry marketers for unpaid wages have had their claims denied by the Ninth Circuit. The court upheld a previous ruling by a California federal court, stating that the companies were not liable for the workers’ pay. On appeal, the panel of judges determined that the companies did not have the necessary control over the farms to establish client employer liability under California law.[1]

Filed in 2018, the workers alleged in their lawsuit that marketers Better Produce Inc. and Red Blossom Sales Inc. failed to pay wages under the Migrant and Seasonal Agricultural Worker Protection Act and California law. The district court, after a bench trial, concluded that Better Produce and Red Blossom were not joint employers under federal law or California common law because they did not supervise the workers’ activities on the farms.

Additionally, the district court held that the companies were not liable under California Labor Code Section 2810.3, which defines “client employer” as a business entity that obtains workers to perform labor within its usual course of business from a labor contractor. The court determined that since the workers did not work on the companies’ premises, the section did not apply.

“This is because the key issue under § 2810.3 concerns where the Plaintiffs-Appellants did the work of harvesting the strawberries,” the panel said.

The Ninth Circuit panel noted that while Better Produce and Red Blossom, as marketers, held master leases to the farmlands and sent personnel to the farms for quality control purposes, the workers did not perform work that fell within the companies’ regular course of business. The court clarified that California law makes a company liable if it uses financially unstable subcontractors to provide workers on its premises. However, the law does not extend liability for workers’ wages when the work is performed elsewhere, even if the workers are producing a product essential to the company’s business.

“[The] Marketers’ obligation to ensure the safety of the products they sell does not render the farms a “worksite” of the Marketers,” said the panel.

In so finding, the Ninth Circuit affirmed the ruling that Better Produce Inc. and Red Blossom Sales Inc. were not responsible for paying the agricultural workers’ wages. The court concluded that the companies did not have sufficient control over the farms to establish liability under California law. The decision highlights the distinction between liability for work performed on a company’s premises versus work performed elsewhere.

Red Blossom Sales is represented by Effie F. Anastassiou of Anastassiou & Associates and by Jason Wade Kearnaghan, Richard J. Simmons and Nora Stilestein of Sheppard Mullin Richter & Hampton LLP. Better Produce is represented by Todd Christopher Hunt, Steven Katz of Constangy Brooks Smith & Prophete LLP and Vincent Martinez of Twitchell & Rice LLP.

Western Growers, Ventura County Agricultural Association, Grower-Shipper Association of Santa Barbara and San Luis Obispo Counties, Grower-Shipper Association of Central California, California Strawberry Commission, and the California Fresh Fruit Association filed an Amici Curiae brief prepared by Robert Hulteng, Damon Ott, and Alvin Arceo of Littler Mendelson P.C.

Veronica Melendez of the California Rural Legal Assistance Foundation, who is representing the workers, was quoted in a Law360 article about the case as saying they are considering their options, including changing the law, which is very much on-brand when the group gets a court decision they don’t like.

Western Growers and industry allies will oppose any efforts in the legislature to expand joint employer liability beyond that which Cal. Labor Code section 2810.3 was intended, when it was enacted in 2014.



[1] Luis Morales-Garcia v. Better Produce, Inc., 22-55119, in the U.S. Court of Appeals for the Ninth Circuit