Livestock Structure Builders May Not Be Exempt from FLSA

By Jeffrey Rhodes October 18, 2022
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Takeaway: The Fair Labor Standards Act (FLSA) requires that all nonexempt employees receive minimum wages and overtime compensation. While the FLSA exempts workers in certain industries, like agriculture, from these requirements, courts generally read these exemptions narrowly. If an employee can reasonably argue that an exemption does not apply, the employee can likely pursue an FLSA claim.

​An employee who worked under the H-2A visa program for agricultural workers arguably did not fit within the Fair Labor Standards Act (FLSA) exemption for agricultural employees, according to a 7th U.S. Circuit Court of Appeals decision.

Signet Builders Inc. is a nationwide construction company that builds commercial, industrial and agricultural structures. In 2019, Signet hired the plaintiff, a Mexican citizen, to build livestock confinement facilities. The plaintiff worked in the United States under the H-2A visa program administered by the U.S. Department of Labor (DOL).

The H-2A visa program authorizes foreign workers to perform agricultural work in the U.S. on a temporary basis. To obtain these visas for workers, the employer must show that there are too few domestic workers willing and able to do the work needed and that the use of guest workers will not undercut local workers' wages and working conditions.

The plaintiff said he was hired by Signet as a subcontractor and assigned to build livestock structures in Wisconsin and Indiana. His work consisted entirely of constructing buildings that would later house livestock. Although he worked on land belonging to farms, he never had any contact with animals.

The plaintiff claimed that he routinely worked more than 40 hours per week, but Signet did not pay him additional compensation for his overtime hours. He filed a complaint under the FLSA and then moved for conditional certification of a collective action on behalf of all Signet H-2A workers who, like him, were exclusively assigned to construction work.

Signet responded with a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6). It raised the affirmative defense that the plaintiff was an agricultural worker who was exempt from the FLSA's overtime protections. The district court agreed with Signet and dismissed the plaintiff's complaint, holding that his construction work fell within the FLSA's exemption for agricultural work. The plaintiff appealed.

On appeal, the 7th Circuit first reasoned that a court should only rarely dismiss an FLSA complaint based on an exemption argument—this should only happen on those few occasions when the facts described in the complaint establish an impenetrable defense to the FLSA claim.

The 7th Circuit then considered the FLSA exemption for agricultural workers. According to Section 3(f) of the FLSA, the term "agriculture" includes two major categories of work: 1) "primary agriculture" work in performing farming activities, which includes raising livestock, and 2) "secondary agriculture" work in performing activities usually done by a farmer or on a farm incidental to or in conjunction with farm work, which includes forestry and lumber operations as well as preparing, delivering or storing items for market.

Signet argued that because the plaintiff had received a H-2A visa as an agricultural worker, he was qualified for the FLSA agricultural exemption. The company also argued that the plaintiff's work in building livestock structures qualified as secondary agricultural work.

The 7th Circuit disagreed with Signet, finding that the H-2A definition of agricultural work was broader than that contained in the FLSA. The court noted that the DOL defined secondary agricultural work based on a totality of the circumstances, which required consideration of many factors concerning how closely the secondary work relates to the primary work of farming.

The court cited several precedents in which the U.S. Supreme Court determined that activities connected to farm work did not qualify as secondary agriculture. These included Supreme Court decisions ruling that bulking—or collecting—dried tobacco leaves, capturing free range chickens, and cleaning and processing fish did not qualify as secondary agricultural work.

Because the FLSA places the burden of establishing an exemption on the employer, the 7th Circuit found that the complaint made sufficient allegations to allow the claim to proceed. It reversed the district court's dismissal order and revived the claim to proceed with litigation.

Vanegas v. Signet Builders Inc., 7th Cir., No. 21-2644 (Aug. 19, 2022).

Jeffrey Rhodes is an attorney with McInroy, Rigby & Rhodes LLP in Arlington, Va.

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