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Alfaro-Huitron v. Cervantes Agribusiness.

No. 19-2091.  D.N.M. Judge Hartz. Migrant and Seasonal Agricultural Worker Protection Act—H-2A Work Visa Program—Breach of Contract—Agency Law—Civil Conspiracy.

December 7, 2020

Plaintiffs are a group of US citizens and lawful permanent residents who work as farm laborers. Cervantes Agribusiness and Cervantes Enterprises, Inc. (collectively, Cervantes) are agricultural businesses owned and managed by members of the Cervantes family. Cervantes signed an outsourcing agreement (agreement) with WKI Outsourcing Solutions, LLC (WKI). The agreement provided that WKI would perform services as a work force provider for a work force comprising skilled farm labor workers, including US citizens, legal residents, and foreign workers with temporary working visas (H-2A visas). WKI received H-2A certification from the US Department of Labor, began recruiting workers, and hired plaintiffs, all of whom were “United States workers” under the H-2A regulations. WKI then canceled its H-2A application, ostensibly due to weather conditions. Neither Cervantes nor WKI provided work to plaintiffs during the time period for which plaintiffs were hired under the terms of the H-2A contract.

Plaintiffs brought claims against several defendants for breach of their employment contracts, civil conspiracy, common law fraud, and violations of the Migrant and Seasonal Agricultural Worker Protection Act (AWPA). All defendants except Cervantes either settled or defaulted, or they were otherwise dismissed. Cervantes moved for summary judgment on all claims, and the district court granted the motion.

On appeal, plaintiffs argued that the district court erred in granting summary judgment on the breach of contract claim. Under agency law, Cervantes could be liable under a contract entered into by WKI as its agent even though WKI’s president was not a Cervantes employee. Liability turns on whether the agent was acting with actual or apparent authority. In the breach of contract context, a minimal level of control may suffice. Here, the trial court erred in applying the control test for an employer-employee relationship. Applying the correct legal test, there was a genuine dispute of material fact about whether WKI acted as Cervantes’s actual or apparent agent in recruiting plaintiffs.

Plaintiffs also argued that Cervantes violated AWPA § 1822(c). This section prohibits farm labor contractors, agricultural employers, or agricultural associations from violating, without justification, the terms of any working arrangements made by that contractor, employer, or association with any migrant agricultural worker. Plaintiffs contended that Cervantes is liable under the AWPA because Cervantes failed to provide them with work in violation of the working arrangement created when plaintiffs accepted WKI’s offer of employment. Agency is a threshold issue for determining whether an agricultural business may be held liable under the AWPA for a labor contractor’s actions. The district court erred as an initial matter by rejecting plaintiffs’ agency theory of liability.

Plaintiffs further contended that the district court erred in granting summary judgment on the civil conspiracy claim, alleging that Cervantes conspired with WKI to evade the H-2A program’s requirements. However, plaintiffs failed to show the first element of a conspiracy claim, an agreement between coconspirators.

The entry of summary judgment in favor of Cervantes on the breach of contract and AWPA § 1822(c) claims was reversed and the case was remanded for further proceedings on those claims. The balance of the summary judgment orders were affirmed.

Official US Court of Appeals for the Tenth Circuit proceedings can be found at the US Court of Appeals for the Tenth Circuit website.

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