# Ramos-Barrientos v. Bland

> Court of Appeals for the Eleventh Circuit · October 27, 2011 · 661 F.3d 587

URL: https://www.frixlaw.com/law-library/cases/616158

## Case

- **Full name:** Nicolas RAMOS-BARRIENTOS, on Behalf of Themselves and All Other Similarly Situated Persons, Anselmo Hernandez-Martinez, on Behalf of Themselves and All Other Similarly Situated Persons, Jorge Hernandez-Antonio, on Behalf of Themselves and All Other Similarly Situated Persons, Gregorio Ponce-Hernandez, on Behalf of Themselves and All Other Similarly Situated Persons, Catalino Hernandez-Rubio, on Behalf of Themselves and All Other Similarly Situated Persons, Plaintiffs-Appellants, Omar Sanchez-Covarrubias, Elias Lopez-Hernandez, Amancio Perez-Angeles, Amancio Perez-Martinez, Jose C. Najera-Quiroz, Esteban Hernandez-Martinez, Jose Pardo-Najera, Interested Parties-Appellants, v. Delbert C. BLAND, Bland Farms, LLC, Manpower of the Americas, Consular Services International, Michael Bryan Bell, Defendants-Appellees, Bland Farms I, LLC, Et Al., Defendants
- **Court:** Court of Appeals for the Eleventh Circuit
- **Decided:** October 27, 2011
- **Citations:** 661 F.3d 587; 18 Wage & Hour Cas.2d (BNA) 385; 161 Lab. Cas. (CCH) 35,959; 2011 U.S. App. LEXIS 21778
- **Precedential status:** Published
- **Opinion:** Opinion by Pryor
- **Judges:** Edmondson, Pryor, Bowdre
- **Cited by:** 19 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/616158

## How later opinions describe it (automated extraction)

- noting Department of Labor’s anti- kickback regulation, 29 C.F.R. § 531.35 , “prohibits any arrangement that ‘tend[s] to shift part of the employer’s business expense to the employees ... to the extent that it reduce[s] an employee’s wage below the statutory minimum.”

## Opinion text

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 10-13412 OCTOBER 27, 2011
________________________ JOHN LEY
CLERK
D.C. Docket No. 6:06-cv-00089-BAE-GRS

NICOLAS RAMOS-BARRIENTOS,
on behalf of themselves and all other similarly situated persons,
ANSELMO HERNANDEZ-MARTINEZ,
on behalf of themselves and all other similarly situated persons,
JORGE HERNANDEZ-ANTONIO,
on behalf of themselves and all other similarly situated persons,
GREGORIO PONCE-HERNANDEZ,
on behalf of themselves and all other similarly situated persons,
CATALINO HERNANDEZ-RUBIO,
on behalf of themselves and all other similarly situated persons,

lllllllllllllllllllll Plaintiffs - Appellants,

OMAR SANCHEZ-COVARRUBIAS,
ELIAS LOPEZ-HERNANDEZ,
AMANCIO PEREZ-ANGELES,
AMANCIO PEREZ-MARTINEZ,
JOSE C. NAJERA-QUIROZ,
ESTEBAN HERNANDEZ-MARTINEZ,
JOSE PARDO-NAJERA,

lllllllllllllllllllll Interested Parties - Appellants,

versus

DELBERT C. BLAND,
BLAND FARMS, LLC,
MANPOWER OF THE AMERICAS,
CONSULAR SERVICES INTERNATIONAL,
MICHAEL BRYAN BELL,

lllllllllllllllllllll Defendants - Appellees,

Bland Farms I, LLC, et al.,

llllllllllllllllllllll Defendants.

________________________

Appeal from the United States District Court
for the Southern District of Georgia
________________________

(October 27, 2011)

Before EDMONDSON and PRYOR, Circuit Judges, and BOWDRE,* District Judge.

PRYOR, Circuit Judge:

The main issue is this appeal is whether an employer that hires migrant farm

workers through the H-2A visa program is entitled to wage credits under the Fair

Labor Standards Act, see 29 U.S.C. § 203(m), for housing and meals that federal

law required the employer to provide the workers. Migrant farm workers who

worked for Bland Farms, LLC, appeal a summary judgment in favor of Bland and

*
Honorable Karon O. Bowdre, United States District Judge for the Northern District of
Alabama, sitting by designation.

2
against their complaint that Bland violated the Act. The workers allege that Bland

paid them below the minimum wage in violation of the Act, id. § 206, when it

failed to reimburse them for fees and travel costs they incurred during their travel

from Mexico to Bland’s farms in Georgia. The district court held that Bland was

entitled to wage credits, id. § 203(m), for the cost of housing and meals that Bland

provided the workers and that those credits offset any amounts owed the workers

for expenses they incurred during their travel. The Secretary of Labor, as amicus

curiae, argues that Bland is not entitled to wage credits for the provision of free

housing for the workers, which is required by federal law, 20 C.F.R. §

655.122(d)(1), because this cost primarily benefits the employer. See 29 C.F.R. §

531.3(d)(1). We defer to the Secretary’s interpretation, Auer v. Robbins, 519 U.S.

452, 117 S. Ct. 905 (1997), that Bland cannot credit the cost of housing in the

wages paid to the workers and we agree with Bland that it is entitled to wage

credits for the cost of meals for the workers. We also conclude that Bland is not

liable under principles of agency law for the fees that third parties charged the

workers related to their efforts to obtain employment with Bland. We affirm in

part, reverse in part, and remand.

3
I. BACKGROUND

Bland Farms, LLC, formerly a sole proprietorship owned by Delbert C.

Bland, grows Vidalia onions, the famous and delicious variety of sweet onion

grown exclusively in southeastern Georgia, see 7 C.F.R. § 955.4. For years, Bland

has hired hundreds of migrant farm workers from Mexico through the H-2A visa

program to work at its farms near Glennville, Georgia, during the fall planting and

spring harvesting seasons. Bland and other employers that participate in the H-2A

program hire workers in foreign countries and must comply with federal

regulations that govern both labor and immigration policy. In the summer of

2001, representatives of Bland began discussions with International Labor

Management Corporation about the possible delegation to International Labor of

some of these administrative responsibilities.

On August 3, 2001, Lee Wicker, a representative of International Labor who

falsely presented himself as the vice president of the company, traveled to Georgia

to meet with Clarke Yearous, the chief operations officer for Bland; Sloan Lott,

the operations manager for Bland; and two other individuals who also worked for

Bland. Wicker explained at the meeting that International Labor could handle all

of the government paperwork and filings pertaining to the H-2A program.

International Labor also “had people in place in Mexico,” who could assist the

4
migrant farm workers with “issues [they] had at the consulate in Mexico.” Wicker

assured Bland’s representatives that Bland could hire the same workers that it had

employed in past growing seasons.

Yearous and Lott disagree with Wicker about a key detail of the meeting:

whether the workers would be charged any undisclosed fees. Yearous testified

that he “asked Lee Wicker, specifically, several times if there would be any

‘under-the-table’ charges to the workers[,] and every time [Wicker] assured

[Yearous] there would be no extra charge.” Yearous also testified that Wicker

assured him that “there would be no hidden fees that Bland Farms would have to

pick up and there would be no unethical or unforseen charges to [Bland’s]

workers.” Lott had a similar recollection, as he testified that “Yearous asked Mr.

Wicker numerous times[] during that meeting whether there would be any charges

to the workers for services provided to Bland Farms[,] and Mr. Wicker told Mr.

Yearous there would be no charges to the workers.” But Wicker testified that he

had no recollection of any discussion during any of the negotiations that occurred

in 2001 of “any additional fees that Bland would have to pay over and above the[]

flat fees” to International Labor. He disagreed with the contentions of Lott and

Yearous that he had “promised no fees would be charged [to the] workers” and

further testified that he “was never in a position to promise clients that there would

5
be no such fee.” Wicker could not make such a promise because the “people in

place in Mexico” who Wicker referenced at the meeting did not work for

International Labor. They instead worked for affiliates of International

Labor—initially Manpower of the Americas and later Consular Services

International. Wicker testified that he explained to Bland in 2001 that Manpower,

not International Labor, would provide assistance to the workers in Mexico, and

that he ordinarily explained to potential clients that Manpower and Consular

Services charged fees to the workers. Wicker never testified that he told

representatives of Bland about these fees.

Later communications clarified the services that International Labor would

perform for Bland, but did not address whether anyone would charge the workers

any fees. In a letter dated August 23, 2001, Wicker gave Bland “several options to

consider.” For $10,000 per year, International Labor would provide “consulting as

well as administrative services” in a package that “would include all aspects of

crafting/modifying [Bland’s] work agreements, all interaction with the various

branches of government including the visa application process with INS,” and

payment of “all fees associated with the application process on behalf of Bland

Farms.” The letter reassured Bland that it could “get [its] former H-2A workers

(preferred workers) back without any problem.” The letter also explained that

6
“Manpower of the Americas . . . would handle all the necessary recruitment

services and provide timely replacement workers.” The letter did not discuss any

other responsibilities that Manpower might handle.

Further negotiations proved successful, and Bland entered an agency and

indemnity agreement with International Labor for the 2002 harvesting and

planting seasons. Bland entered similar agreements with International Labor each

year from 2003 through 2007. The agreements provided that International Labor

would “prepare and process forms and documents” required for participation in

the H-2A program, maintain all necessary contacts with state and federal agencies

on behalf of Bland, and “undertake the administrative tasks of the domestic

recruitment requirements” imposed by federal regulations.

The agreements that Bland signed borrowed most of their language from the

standard agreement that International Labor entered with clients, with one key

exception: the agreements did not address the recruitment of workers from

Mexico. The standard agreement provided that International Labor would

“undertake recruitment . . . for the purpose of recruiting the number of

supplementary farm laborers from domestic sources and/or temporary agricultural

employees from the Republic of Mexico under the H-2A program.” The standard

agreement also provided that International Labor would “prepare and process

7
forms and documents” required “to obtain U.S. workers and/or H-2A workers

from the Republic of Mexico.” But the agreements that Bland signed did not

mention the recruitment of workers from Mexico and related administrative

responsibilities. Bland instead recruited most of its workers on its own. Bland

explained that its recruiters would “travel to Mexico and attempt to locate people

who [were] interested in coming to work for [it].” Bland concedes that it hired

International Labor to recruit workers “[i]n rare cases,” but none of the workers

contend that International Labor or one of its affiliates in Mexico recruited them to

work for Bland. International Labor also charged Bland $7,500 each year for its

services, not its standard rate of $10,000.

Bland had to obtain certification from the Department of Labor before it

could hire workers through the H-2A program. 8 U.S.C. § 1188(a); 20 C.F.R. §

655.103(a). Employers may hire workers from foreign countries through the H-2A

program only under certain conditions. See 8 U.S.C. § 1188; 20 C.F.R. pt. 655,

subpt. B. Before an employer may obtain certification to hire workers through the

H-2A program, the Secretary of Labor must be satisfied that “there are not

sufficient workers who are able, willing, and qualified” to work for the employer,

8 U.S.C. § 1188(a)(1)(A), and that “the employment of the alien in such labor or

services will not adversely affect the wages and working conditions of workers in

8
the United States similarly employed,” id. § 1188(a)(1)(B). To accomplish these

goals, the Secretary must deny certification if “the employer has not made positive

recruitment efforts within a multi-state region of traditional or expected labor

supply” and a significant number of qualified and willing American workers are in

that region. Id. § 1188(b)(4). Employers may also have to pay workers at a rate

higher than the federal minimum wage. See Arriaga v. Fla. Pac. Farms, L.L.C.,

305 F.3d 1228, 1233 (11th Cir. 2002).

Employers must also agree to provide certain benefits to workers hired

through the H-2A program. Federal law that “appl[ies] in the case of the filing

and consideration of an application for a labor certification,” 8 U.S.C. § 1188(c),

requires employers to “furnish housing in accordance with regulations,” id. §

1188(c)(4). The corresponding regulation requires employers to provide in their

employment contracts with workers a provision under which “[t]he employer must

provide housing at no cost to the H-2A workers . . . who are not reasonably able to

return to their residence within the same day.” 20 C.F.R. § 655.122(d)(1). Bland

provided the workers with housing, and the district court accepted the cost of the

housing as $50 per week per worker.

Other regulations require employers to promise additional benefits in their

work contracts. See id. § 655.122. Among these benefits, employers must

9
promise to provide H-2A workers who complete 50 percent of the work contract

period payment “for reasonable costs incurred by the worker for transportation and

daily subsistence from the place from which the worker has come to work for the

employer.” Id. § 655.122(h)(1). Consistent with the contractual obligations

required by federal regulations, Bland provided the workers between $21.95 and

$22.70 as reimbursement for the costs of meals they consumed during their travel.

Bland also reimbursed them for the cost of their travel from their homes to the

consular post in Monterrey, Mexico, and from the American border to the farm in

Georgia. Bland also reimbursed the workers for the $200 visa fee that the United

States Consulate had charged them.

Bland did not reimburse the workers for all of the expenses they incurred

during their travel to the farm. Bland did not reimburse a $6 border crossing fee

and the cost of travel from the United States consular post in Monterrey, Mexico,

to the American border. Some workers also had to obtain Mexican passports to

participate in the H-2A program, and Bland did not reimburse any of the workers

for this expense. The district court accepted Bland’s calculation of these

unreimbursed expenses to total less than $50 per year per worker, and the workers

do not challenge this finding.

10
Bland also did not reimburse the workers for a fee equal to approximately

$200 that Manpower or Consular Services charged each worker for assistance

provided at the consulate. Bland believed that International Labor would provide

this assistance to the workers, and that Manpower and its successor, Consular

Services, provided only recruitment services. Although Bland primarily

conducted its own recruitment, Bland communicated with Manpower and

Consular Services and was aware that these companies provided some services for

Bland. International Labor knew that Manpower and Consular Services charged

fees to the workers, and it did not instruct them not to collect these fees.

Bland argues that it was unaware of the fees that Manpower and Consular

Services charged. An employee of Bland testified that, amid the extensive

communications between Bland and International Labor, “not a single email from

[International Labor], its agents, and/or personnel ever informed Bland that

[International Labor] and/or its agents or personnel were charging fees to Bland

H[-]2A workers.” Wicker continued to communicate with Bland after Bland

entered its initial agreement with International Labor, but Wicker testified that he

had no recollection of whether he had informed Bland about this fee. Bland gave

the workers a form upon their arrival to list reimbursable expenses, but none of the

workers disclosed the fee charged by Manpower or Consular Services.

11
Five workers who worked for Bland between 2001 and 2006 filed a

complaint in the Southern District of Georgia on September 25, 2006, against

Bland, International Labor, Manpower, and Consular Services; an amended

complaint added Michael Bell, president of both Manpower and Consular

Services, as a defendant. The amended complaint included a claim that the

defendants had violated the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. The

workers argued that Bland shifted business expenses to the workers and

effectively lowered their pay below the minimum wage when it failed to reimburse

the workers for expenses incurred during their travel, specifically the cost of

transportation from Monterrey to the American border, the border crossing fee,

passport fees, and the fees that Manpower and Consular Services had charged.

The workers also alleged a breach of contract by Bland based on the failure to pay

promised wages and transportation expenses, and violations of statutory and

contractual obligations under the Georgia right to work law, Ga. Code Ann. § 34-

6-21. The amended complaint requested damages, declaratory and injunctive

relief, and costs and attorney’s fees. The workers moved for class certification,

and the district court conditionally certified a collective action under the Act, 29

U.S.C. § 216(b), but denied certification under Federal Rule of Civil Procedure 23.

12
The district court granted summary judgment in favor of Bland and against

the claim of the workers that they were entitled to reimbursement for expenses

incurred during their travel. The district court held that Bland could credit the cost

of housing and the reimbursements for meals as part of the wages of the workers

and the credit of these amounts in the wages of the workers offset any amount

owed them for expenses related to their travel to Georgia. The district court relied

on a provision of the Fair Labor Standards Act that allows wage credits for “the

reasonable cost” of “board, lodging, or other facilities” if the “facilities are

customarily furnished by such employer to his employees.” 29 U.S.C. § 203(m).

The district court reasoned that Bland was “entitled to a § 203(m) wage credit for

the reasonable cost of housing” provided to the workers “[b]ecause housing is

‘customarily furnished’ and indeed required by H-2A regulations.” The district

court concluded that Bland “do[es] not violate those regulations by taking a §

203(m) wage credit for the reasonable cost of housing,” and meals. Because it

reasoned that Bland had complied with the Act, the district court also entered

summary judgment in favor of Bland against the claim of the workers that Bland

had violated a contractual agreement to pay wages in accordance with the law.

In a separate order, the district court granted Bland’s motion for summary

judgment against the workers’ claim that Bland had to reimburse them for the fee

13
that Manpower and Consular Services had charged. The district court found that

“there is no evidence that [Bland] authorized [International Labor], [Manpower],

or [Consular Services] to collect processing and recruiting fees” or that Bland, “by

word or conduct, said or did anything to cause any H-2A worker to believe that

[International Labor], [Manpower], or [Consular Services] were authorized to

collect such fees.” The district court also granted summary judgment in favor of

Bland on the workers’ right to work claims.

II. STANDARD OF REVIEW

We review a summary judgment de novo. Beach Cmty. Bank v. St. Paul

Mercury Ins. Co., 635 F.3d 1190, 1194 (11th Cir. 2011). “We apply the same

legal standards that bound the district court and view all facts and reasonable

inferences in the light most favorable to the nonmoving party.” Shuford v. Fid.

Nat’l Prop. & Cas. Ins. Co., 508 F.3d 1337, 1341 (11th Cir. 2007).

III. DISCUSSION

We divide our discussion in two parts. First, we address whether Bland is

entitled to wage credits, 29 U.S.C. § 203(m), for expenditures for housing and

reimbursements for meals. Second, we address whether Bland must reimburse the

workers for the fees that Manpower and Consular Services charged them.

A. Bland Is Not Entitled to a Wage Credit for Housing,

14
but Is Entitled to a Wage Credit for Meals.

The Fair Labor Standards Act requires employers to pay their employees a

minimum wage. 29 U.S.C. § 206. “‘[W]ages’ cannot be considered to have been

paid by the employer and received by the employee unless they are paid finally

and unconditionally or ‘free and clear.’” 29 C.F.R. § 531.35. This rule prohibits

any arrangement that “tend[s] to shift part of the employer’s business expense to

the employees . . . to the extent that it reduce[s] an employee’s wage below the

statutory minimum.” Mayhue’s Super Liquor Stores, Inc. v. Hodgson, 464 F.2d

1196, 1199 (5th Cir. 1972); see also Shultz v. Hinojosa, 432 F.2d 259, 267 (5th

Cir. 1970).

“The only statutory exception to the requirement that wages be paid free and

clear appears in 29 U.S.C.[] § 203(m)[] . . . .” Brennan v. Veterans Cleaning

Serv., Inc., 482 F.2d 1362, 1369 (5th Cir. 1973); see also Arriaga v. Fla. Pac.

Farms, L.L.C., 305 F.3d 1228, 1235 (11th Cir. 2002). Section 203(m) provides

that a “‘[w]age’ paid to any employee includes the reasonable cost, as determined

by the Administrator, to the employer of furnishing such employee with board,

lodging, or other facilities, if such board, lodging, or other facilities are

customarily furnished by such employer to his employees.” 29 U.S.C. § 203(m).

“Accordingly, the employer lawfully may deduct from an employee’s pay the

15
reasonable cost of employer provided housing,” Caro-Galvan v. Curtis

Richardson, Inc., 993 F.2d 1500, 1513 (11th Cir. 1993), and meals, Donovan v.

New Floridian Hotel, Inc., 676 F.2d 468, 473 (11th Cir. 1982), “even if that

deduction results in the employee’s cash pay falling below the statutory

minimum,” Caro-Galvan, 993 F.2d at 1513. “Once the employee proves that the

wages received were less than the statutory minimum, the burden shifts to the

employer to prove with proper records the reasonable cost of the housing,” id. at

1514, and meals that it provided, Donovan, 676 F.2d at 475.

Bland argues that it is entitled to wage credits for housing and meals under

section 203(m) to offset any amounts owed the workers for travel expenses: that

is, the fees for passports; the cost for transportation from Monterrey, Mexico, to

the American border; and the fee paid to cross the border. The workers and the

Secretary argue that the cost of housing that Bland provided, as required by federal

law, may not be included in wages. The workers also dispute that the cost of

meals may be treated as part of wages.

Our discussion of these issues is divided in two parts. We first address

whether Bland may receive wage credits under section 203(m) for the cost of

housing that it provided to the workers. We then address whether Bland may

16
receive wage credits under section 203(m) for reimbursements for the meal

expenses the workers incurred during their travel to Bland’s farm.

1. Bland May Not Receive Wage Credits for the Cost of Housing.

The workers and the Secretary argue that the district court erred when it

allowed Bland to receive wage credits for the cost of housing that it provided to

the workers. They contend that section 203(m) establishes a rebuttable

presumption that an employer may receive a wage credit for the cost of housing

and that this presumption is rebutted when the provision of housing is “primarily

for the benefit or convenience of the employer,” 29 C.F.R. § 531.3(d)(1). They

argue that the provision of housing primarily benefitted Bland because federal law

required Bland to provide this housing free of charge, see 8 U.S.C. § 1188(c)(4);

20 C.F.R. § 655.122(d)(1), and “expenses imposed on the employer by law also

must be viewed as inherently for the primary benefit of the employer” “[b]ecause

an employer is not permitted to operate its business in violation of the law.” Bland

argues that section 203(m) may not be read to provide an exception for free

housing required by federal law.

A key regulation prevents employers from exploiting section 203(m) to shift

business expenses to employees: “The cost of furnishing ‘facilities’ found by the

Administrator to be primarily for the benefit or convenience of the employer will

17
not be recognized as reasonable and may not therefore be included in computing

wages.” 29 C.F.R. § 531.3(d)(1). As used in section 203(m), “facilities” is a

broad term that includes expenses as diverse as tools of the trade, id. §

531.3(d)(2), uniforms, id., and travel costs, Arriaga, 305 F.3d at 1242. Employers

must reimburse employees for their expenditures on facilities that primarily

benefit the employer to the extent that these expenditures reduce employee pay

below the minimum wage. See, e.g., id. at 1237 n.11. In Arriaga, we held that,

under section 531.3(d), employers that hire workers through the H-2A program

must reimburse the workers for the cost of visas, id. at 1244, and the cost of the

workers’ transportation from their home countries to the work site up to the point

that the minimum wage requirements of the Act are met, id. at 1242.

Bland contends that our decision in Arriaga is inconsistent with our earlier

precedent in Davis Bros. v. Donovan, 700 F.2d 1368 (11th Cir. 1983), but we

disagree. Davis Bros. held “merely that[] . . . Congress has allowed employers to

take a credit on the cash component of their minimum wage obligation for meals

regularly provided even if the employees are not given the continuing option to

take cash instead.” Id. at 1372. Arriaga had nothing to do with the issue decided

in Davis Bros.: the availability of a wage credit when employees did not

voluntarily choose to accept in kind payments in lieu of cash payments. Bland

18
argues alternatively that Arriaga is wrong even if it does not conflict with Davis

Bros., but “we are bound by our prior precedent,” Thomas v. Carnival Corp., 573

F.3d 1113, 1117 (11th Cir. 2009).

Under the deferential standard of Auer v. Robbins, 519 U.S. 452, 117 S. Ct.

905 (1997), we accept the interpretation of the Secretary that an employer may not

receive wage credits under section 203(m) for the housing provided H-2A workers

because this expense primarily benefits the employer under section 531.3(d)(1).

“Because the [‘primarily benefits’] test is a creature of the Secretary’s own

regulations, [her] interpretation of it is[] . . . controlling unless ‘plainly erroneous

or inconsistent with the regulation.’” Auer, 519 U.S. at 461, 117 S. Ct. at 911

(quoting Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 359, 109 S.

Ct. 1835, 1850 (1989)); see also Talk Am., Inc. v. Mich. Bell Tel. Co., 564 U.S. --,

--, 131 S. Ct. 2254, 2260–61 (2011); Bowles v. Seminole Rock & Sand Co., 325

U.S. 410, 413–14, 65 S. Ct. 1215, 1217 (1945). It is irrelevant “that the

Secretary’s interpretation comes to us in the form of a legal brief; . . . that does

not, in the circumstances of this case, make it unworthy of deference. The

Secretary’s position is in no sense a ‘post hoc rationalizatio[n]’ advanced by an

agency seeking to defend past agency action against attack.” Auer, 519 U.S. at

462, 117 S. Ct. at 912 (second alteration in original) (quoting Bowen v.

19
Georgetown Univ. Hosp., 488 U.S. 204, 212, 109 S. Ct. 468, 474 (1988)); see also

Talk Am., 564 U.S. at --, 131 S. Ct. at 2260–61. “Nor is there any other ‘reason to

suspect that the interpretation does not reflect the [Secretary’s] fair and considered

judgment on the matter in question.’” Talk Am., 564 U.S. at --, 131 S. Ct. at 2263

(quoting Auer, 519 U.S. at 462, 117 S. Ct. at 912). The Secretary argues that

section 203(m) establishes only a presumption that the cost of housing may be

included in wages and that this presumption may be rebutted when the provision

of the housing is “primarily for the benefit or convenience of the employer,” 29

C.F.R. § 531.3(d)(1). We accept this argument because section 531.3(d)(1) is a

valid regulation, see Shultz, 432 F.2d at 267, and section 203(m) textually applies

to housing.

Bland contends that Auer is inapplicable because the Secretary has no

authority under the Act to require Bland to pay the expenses of the workers, but

we disagree. Bland ignores statutory language that gives the Secretary

“authori[ty] to supervise the payment of the unpaid minimum wages . . . owing to

any employee or employees under section 206,” 29 U.S.C. § 216(c), and Bland

ignores precedent that holds that section 531.3(d)(1) is a valid regulation, Shultz,

432 F.2d at 267.

20
Bland argues that the “primarily benefits” test of section 531.3(d)(1) is

inapplicable to housing because the only restrictions that section 203(m) imposes

on the availability of wage credits for the cost of housing are the requirements that

the housing be “customarily furnished” and that the cost be “reasonable,” but this

argument also fails. Section 203(m) treats housing as a type of facility, see 29

U.S.C. § 203(m) (referring to “lodging[] or other facilities”), and section

531.3(d)(1) provides a criterion for determination of whether a facility is

“reasonable” under section 203(m). We have applied section 531.3(d)(1) to deny

wage credits for “other facilities” even though section 203(m) places no more

restrictions on the availability of credits for “other facilities” than for lodging. See

Shultz, 432 F.2d at 267; see also Soler v. G. & U., Inc., 833 F.2d 1104, 1110 (2d

Cir. 1987) (an employer may be denied a wage credit for the cost of housing

“[w]here the statutory presumption is rebutted by substantial evidence

demonstrating that the housing is not a benefit running primarily to the employee,

but rather a burden imposed upon the employee in furtherance of the employer’s

business.”) Several other courts also have denied wage credits under section

203(m) for housing found to benefit primarily the employer, such as housing for

employees who were required to be on duty at all hours. See, e.g., Jiao v. Shi Ya

Chen, No. 03 Civ. 0165(DF), slip op. at 14 (S.D.N.Y. Mar. 30, 2007); Marshall v.

21
DeBord, No. 77-106-C, slip op. at 6–8 (E.D. Okla. July 27, 1978); Bailey v. Pilots’

Ass’n for Bay & River Del., 406 F. Supp. 1302, 1309 (E.D. Pa. 1976). We apply

the “primarily benefits” test of section 531.3(d)(1) to the provision of housing by

Bland to workers hired through the H-2A program.

We accept as not “‘plainly erroneous or inconsistent with the regulation,’”

Auer, 519 U.S. at 461, 117 S. Ct. at 911 (quoting Robertson, 490 U.S. at 359, 109

S. Ct. at 1850), the Secretary’s argument that Bland may not receive wage credits

for housing required by law because these expenditures are “primarily for the

benefit or convenience of [Bland],” 29 C.F.R. § 531.3(d)(1). The Secretary’s

position is consistent with statutory and regulatory texts and our earlier

interpretations of those provisions. The cost of housing that Bland provided to the

workers hired through the H-2A program was a mandatory business expense, and

Bland cannot “shift part of [its] business expense to the employees,” Mayhue’s

Super Liquor Stores, 464 F.2d at 1199. Arriaga examined the distinction between

facilities that primarily benefit or convenience the employer and facilities that may

be included in wages and concluded that “it is apparent that the line is drawn

based on whether the employment-related cost is a personal expense that would

arise as a normal living expense.” 305 F.3d at 1243. See also Shultz, 432 F.2d at

267 (“[T]he words ‘other facilities’ are to be considered as being in pari materia

22
with the preceding words ‘board and lodging.’”). The cost of housing for the

workers near a job site far from their permanent residence did not arise “in the

course of ordinary life,” Arriaga, 305 F.3d at 1242, but instead was required by

federal law as a condition of Bland’s participation in the H-2A program and arose

“from the employment itself,” id.

The Secretary’s position is also consistent with regulations that provide

examples of facilities that primarily benefit the employer because they are

necessary business expenses. These facilities include “[t]ools of the trade,” “the

cost of any construction by and for the employer,” and “the cost of uniforms and

of their laundering.” 29 C.F.R. § 531.3(d)(2). The Department of Labor has also

long maintained that employers primarily benefit from expenditures for “company

police and guard protection; taxes and insurance on the employer’s buildings

which are not used for lodgings furnished to the employee,” id. § 531.32(c), and

the payment of any tax that the law requires the employer to pay, id. § 531.38. By

contrast, taxes that the employer is not required by law to pay, including “the

employee’s share of social security and State unemployment insurance taxes,” may

be included in wages. Id.

The Secretary has long maintained that the provision of some services

required by law may primarily benefit the employer even if they provide some

23
benefit to employees. An employer may not receive a wage credit for “medical

services and hospitalization which [it] is bound to furnish under workmen’s

compensation acts,” id. § 531.32(c), for example, even though employees would

be the beneficiaries of any services provided under those acts. The cost of safety

caps provided to miners also may not count toward the wages of miners under

section 203(m), 29 C.F.R. § 531.32(c), even though these caps help protect miners

from injuries.

Bland argues that the interpretations contained in sections 531.32 and

531.38 are not entitled to deference under Chevron U.S.A. Inc. v. Natural

Resources Defense Council, Inc., 467 U.S. 837, 104 S. Ct. 2778 (1984), and that

we should not rely on them, but this argument fails. Even if these interpretations

in sections 531.32 and 531.38 are not entitled to deference under Chevron or Auer,

they are persuasive under Skidmore v. Swift & Co., 323 U.S. 134, 65 S. Ct. 161

(1944), in part because they were adopted in 1967, see 32 Fed. Reg. 13575,

13577–79 (1967), and “[w]e ‘normally accord particular deference to an agency

interpretation of “longstanding” duration,’” Alaska Dep’t of Envtl. Conservation

v. EPA, 540 U.S. 461, 487, 124 S. Ct. 983, 1001 (2004) (quoting Barnhart v.

Walton, 535 U.S. 212, 220, 122 S. Ct. 1265, 1270 (2002) (quoting N. Haven Bd.

of Educ. v. Bell, 456 U.S. 512, 522 n.12, 102 S. Ct. 1912, 1918 n.12 (1982))).

24
Although section 203(m) ordinarily applies to farm workers, employers of

farm workers do not enjoy a wholesale exemption from statutory provisions and

regulations that limit the applicability of wage credits under section 203(m).

Courts have allowed wage credits for housing that agricultural employers have

provided to their employees, but these decisions did not involve the provision of

free housing required by law. See, e.g., Soler, 833 F.2d at 1110; Martinez v. Deaf

Smith Cnty. Grain Processors, Inc., 583 F. Supp. 1200, 1206–08 (N.D. Tex. 1984).

Other decisions that Bland cites that allowed wage credits under section 203(m)

for work site housing also did not involve free housing that a law required the

employer to provide. See Marshall v. Truman Arnold Distributing Co., 640 F.2d

906, 909 (8th Cir. 1981); Walling v. Alaska Pac. Consol. Mining Co., 152 F.2d

812, 815 (9th Cir. 1946).

Bland argues that it provided housing to the workers under contractual

provisions, not federal law, but we disagree. Even if a regulation required Bland

only to promise in its work contracts to provide housing, 20 C.F.R. §

655.122(d)(1), (q), a statute provided that Bland “shall furnish housing,” 8 U.S.C.

§ 1188(c)(4). We reverse the summary judgment that Bland may receive wage

credits for the housing it provided to the workers.

2. Bland May Receive Wage Credits for Reimbursements for Meals.

25
The workers also argue, without the Secretary’s support, that the district

court erred when it held that Bland could receive wage credits for reimbursements

provided for meals, but this argument fails. Federal regulations required Bland to

promise to reimburse the workers for the meal expenses incurred during their

travel to Bland’s farm, but the workers wisely do not rely on the “primarily

benefits” test of section 531.3(d)(1). Under section 203(m), “meals are always

regarded as primarily for the benefit and convenience of the employee.” 29 C.F.R.

§ 531.32(c). Unlike the cost of work site housing, the workers would have

incurred expenses for food “in the course of ordinary life.” Arriaga, 305 F.3d at

1242.

The workers present two arguments to support their position that Bland may

not receive wage credits for meal reimbursements, but both of these arguments

fail. First, the workers argue that Bland may not receive wage credits for meals

because the H-2A regulations require that Bland cover these expenses and, to the

extent these regulations overlap with section 203(m), Bland must follow the

provision that gives the greater benefit to the workers. This argument fails

because the workers have alleged a violation of the Fair Labor Standards Act, not

a violation of the regulations that govern the H-2A visa program or a violation of

any contractual obligation to abide by the H-2A regulations. The contractual

26
claim that the workers alleged in their complaint involved the failure to pay wages,

not the failure to provide reimbursements for the cost of meals. Second, the

workers argue that Bland may not receive wage credits for the meals because

“[f]acilities furnished in violation of any Federal, State, or local law, ordinance or

prohibition will not be considered facilities ‘customarily’ furnished,” 29 C.F.R. §

531.31, but this argument is flawed. The workers rely on the regulations that

require employers of H-2A workers to promise in their work contracts to

reimburse workers for inbound subsistence. See 20 C.F.R. § 655.122(q). Because

“there is no legal difference between deducting a cost directly from the worker’s

wages and shifting a cost, which [an employer] could not deduct, for the employee

to bear,” Arriaga, 305 F.2d at 1236, the workers insist that Bland would violate the

H-2A regulation if it received wage credits for the meals. But the failure of Bland

to provide those reimbursements would be a violation of a private contract, not a

violation of federal law. The H-2A regulations require only that employers

promise to provide reimbursements for meals under the terms of employment

contracts. 20 C.F.R. § 655.122(q). A recently promulgated regulation subjects an

employer of H-2A workers to civil penalties for failure to comply with work

contracts, see 20 C.F.R. § 501.19, but this regulation applies only to employers

who submitted applications to hire H-2A workers on or after March 15, 2010, see

27
75 Fed. Reg. 6884, 6978 (2010). Section 203(m) provides for the protection of

benefits secured by collective bargaining agreements, but it does not provide such

protection to benefits secured by individual contracts. We affirm the summary

judgment that Bland may receive wage credits for the meals it provided the

workers.

B. The Workers Failed to Present Evidence That Bland Approved the Collection
of Fees by Manpower and Consular Services.

The workers argue that the district court erred when it granted summary

judgment in favor of Bland and against the claim of the workers that they were

entitled under the Act to reimbursement for the fees that Manpower and Consular

Services had charged them, but we disagree. To obtain reimbursement for these

fees, the workers had to prove both that the fees may not be included in wages

under section 203(m) and that Bland permitted the collection of the fees under

principles of agency law. Arriaga, 305 F.3d at 1245. As in Arriaga, we need not

address whether the fees are included in wages under section 203(m) because the

workers failed to present substantial evidence that Bland provided Manpower and

Consular Services the authority to collect those fees. See id.

“When applying agency principles to federal statutes, ‘the Restatement

(Second) of Agency . . . is a useful beginning point for a discussion of general

28
agency principles.’” Id. (alteration in original) (quoting Burlington Indus. v.

Ellerth, 524 U.S. 742, 755, 118 S. Ct. 2257, 2266 (1998)). Under general

principles of agency law, “[a]uthority is the power of the agent to affect the legal

relations of the principal by acts done in accordance with the principal’s

manifestations of consent to him.” Restatement (Second) of Agency § 7 (1958);

see also Restatement (Third) of Agency §§ 2.01, 2.02 (2006). “[A]uthority to

conduct a transaction includes authority to do acts which are incidental to it,

usually accompany it, or are reasonably necessary to accomplish it,” Restatement

(Second) of Agency § 35; see also Restatement (Third) of Agency § 2.02 cmt. d,

but “[a]n agent is authorized to do, and to do only, what it is reasonable for him to

infer that the principal desires him to do in the light of the principal’s

manifestations and the facts as he knows or should know them at the time he acts,”

Restatement (Second) of Agency § 33; see also Restatement (Third) of Agency §§

2.01, 2.02. Authority often “can be created by written or spoken words or other

conduct of the principal which, reasonably interpreted, causes the agent to believe

that the principal desires him so to act on the principal’s account.” Restatement

(Second) of Agency § 26; see also Restatement (Third) of Agency §§ 2.02, 3.01.

“Acquiescence by the principal in conduct of an agent whose previously conferred

authorization reasonably might include it, indicates that the conduct was

29
authorized; if clearly not included in the authorization, acquiescence in it indicates

affirmance.” Restatement (Second) of Agency § 43(1); see also Restatement

(Third) of Agency § 2.02 cmt. f.

The workers argue that Bland gave actual authority to Manpower and

Consular Services to collect fees from them when Bland entered its agreement

with International Labor, but the workers failed to present any “evidence on which

the jury could reasonably find for the [workers],” Anderson v. Liberty Lobby, Inc.,

477 U.S. 242, 252, 106 S. Ct. 2505, 2512 (1986). Bland never expressly permitted

the collection of fees nor acquiesced in the collection of fees. The agreement that

Bland signed made no reference to the collection of fees from workers. Lott and

Yearous both testified that Wicker made assurances that workers would not have

to pay any “under-the-table” charges and that the flat fee to International Labor

covered all expenses. Wicker challenged this account, but Wicker also testified

that he had no recollection of any discussion with representatives of Bland about

any fees charged by Manpower or Consular Services. Bland understood

Manpower and Consular Services to provide only assistance with the recruitment

of workers, a service that Bland needed only on rare occasions and was not

covered in the agency and indemnity agreements with International Labor. None

of the workers ever declared the recruiting fees on the expense sheets that Bland

30
gave each worker, and none of the communications to Bland from International

Labor mentioned the collection of fees from workers.

The workers argue that included in Bland’s grant of authority to

International Labor to secure laborers was the “responsib[ility] for collecting

passports and consular fees from the prospective H-2A workers for submission to

the U.S. Consulate and assisting the workers in completing their visa application

paperwork,” and that the collection of fees by Manpower and Consular Services

for their assistance with these administrative tasks was an incident of this authority

granted to International Labor, but we disagree. We rejected a similar argument in

Arriaga, where an employer hired a company to manage its H-2A program and that

company hired an individual in Monterrey, Mexico, to assist with the recruitment

of workers. 305 F.3d at 1233–34. That individual then communicated with

“contact persons” to assist with recruitment efforts in other areas of Mexico. Id. at

1234. The contact persons charged referral fees to workers hired to work for the

employer, and an assistant of the individual in Monterrey also charged an

administrative fee to some of the workers. Id. The workers in Arriaga argued that

the employer was liable for the fees under principles of apparent authority because

the “fees were payments necessary to recruit the workers.” Id. at 1245. We

rejected this argument because the workers had presented no evidence of any

31
“words or conduct of the [employer] which, reasonably interpreted, could have

caused the [workers] to believe the [employer] consented to have the recruitment

fees demanded on their behalf.” Id. The workers in this appeal, like the workers

in Arriaga, contend that the authority given to a party to conduct certain

administrative tasks implicitly conveys authority to a third party to charge fees for

assistance with those tasks. We rejected this argument in Arriaga, and we reject it

here.

The workers attempt to distinguish Arriaga, but their arguments are

unavailing. The workers contend that Bland is liable based on principles of actual

authority, not apparent authority, which was the basis for the argument of the

plaintiffs in Arriaga. This distinction is irrelevant because both actual authority

and apparent authority “‘depend for their creation on some manifestations, written

or spoken words or conduct, by the principal, communicated either to the agent

(actual authority) or to the third party (apparent authority).’” Id. (quoting Prod.

Promotions, Inc. v. Cousteau, 495 F.2d 483, 493 (5th Cir. 1974), overruled on

other grounds, Ins. Corp. of Ireland v. Compagnie des Bauxites de Guinee, 456

U.S. 694, 702–03, 102 S. Ct. 2099, 2104–05 (1982)). The authority to conduct

tasks associated with the hiring of workers does not convey a manifestation of

consent to collect fees. See id. at 1245–46. The workers also attempt to

32
distinguish Arriaga on the ground that the employer in Arriaga instructed its agent

not to collect fees from workers, but this distinction is irrelevant.

Communications to the agent that were not learned by third parties do not affect

the scope of apparent authority, so this fact did not affect the analysis of Arriaga.

See Restatement (Second) of Agency § 8, illus. 3. The workers argue that

International Labor failed to instruct Manpower and Consular Services not to

collect fees, but the district court correctly observed that “actual authority requires

the principal’s manifestation of assent for the agent to take action on the

principal’s behalf,” and International Labor’s “failure to object to the collection of

fees did not constitute assent by Bland Farms to those practices.”

The workers also contend that Bland is liable for fees that the workers paid

to Manpower and Consular Services because International Labor was aware of

these fees and this knowledge is imputed to Bland, but this argument too fails.

“[T]he liability of a principal is affected by the knowledge of an agent concerning

a matter as to which he acts within his power to bind the principal or upon which it

is his duty to give the principal information.” Restatement (Second) of Agency §

272; see also Restatement (Third) of Agency § 5.03. The workers cite Georgia

caselaw that similarly holds that “knowledge relating to the subject-matter of the

agency which the agent acquires” is imputed to the principal. Roylston v. Bank of

33
Am., 290 Ga. App. 556, 560, 660 S.E.2d 412, 417 (2008) (quoting Bean v. Barron,

176 Ga. 285, 285–86, 168 S.E. 259, 260 (1933)). Reliance on these authorities is

misplaced because, “[i]f an agent has done an unauthorized act or intends to do

one, the principal is not affected by the agent’s knowledge that he has done or

intends to do the act.” Restatement (Second) of Agency § 280; see also Gaulding

v. Courts, 90 Ga. App. 472, 480, 83 S.E.2d 288, 294 (1954); Restatement (Third)

of Agency § 5.03 cmt. b. Any knowledge of International Labor about the fees

charged to the workers by Manpower and Consular Services is not imputed to

Bland because the collection of these fees was outside the scope of authority

granted by Bland. We affirm the summary judgment that Bland is not liable for

the fees charged to the workers by Manpower and Consular Services.

IV. CONCLUSION

We AFFIRM in part the summary judgment in favor of Bland as it pertains

to the availability of wage credits for meals and Bland’s liability for fees charged

by Manpower and Consular Services. We REVERSE in part the summary

judgment in favor of Bland as it pertains to the availability of wage credits for

housing, and REMAND for further proceedings.

34

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/616158. Public record. Not legal advice.