The opinion
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
July 21, 2009
No. 07-30942 Charles R. Fulbruge III
Clerk
DANIEL CASTELLANOS-CONTRERAS; OSCAR RICARDO DEHEZA-
ORTEGA; RODOLFO ANTONIO VALDEZ-BAEZ
Plaintiffs - Appellees
v.
DECATUR HOTELS LLC; F PATRICK QUINN, III
Defendants - Appellants
Appeal from the United States District Court
for the Eastern District of Louisiana
Before JONES, Chief Judge, and JOLLY and HAYNES, Circuit Judges.
E. GRADY JOLLY, Circuit Judge:
The petition for panel rehearing is GRANTED. The prior opinion is
WITHDRAWN, and the following opinion replaces it.
The aftermath of Hurricane Katrina required New Orleans hotelier
Decatur Hotels, L.L.C. (“Decatur”) to look to foreign sources of labor. A group
of these employees (collectively, the “guest workers”), who held H-2B visas while
working for Decatur, contend that Decatur violated the Fair Labor Standards
Act (“FLSA”) by paying them less than minimum wage, free and clear, when
Decatur refused to reimburse them for recruitment, transportation, and visa
No. 07-30942
expenses that they incurred before relocating to the United States to work for
Decatur.
Decatur filed a motion to dismiss and/or for summary judgment, and the
guest workers filed a cross-motion for summary judgment. The district court
denied Decatur’s motion, granted the guest workers’ motion in part, and certified
its order for interlocutory appeal. A motions panel of this court authorized
Decatur to file an interlocutory appeal. In this interlocutory appeal under 28
U.S.C. § 1292(b), Decatur raises three issues of first impression for this court:
whether, under the FLSA, an employer must reimburse guest workers for (1)
recruitment expenses, (2) transportation expenses, or (3) visa expenses, which
the guest workers incurred before relocating to the employer’s location. We
conclude that the FLSA does not require an employer to reimburse any of these
expenses. We therefore reverse the district court’s order, and we render
judgment in favor of Decatur.
I.
Decatur operates luxury hotels in the New Orleans area. Before
Hurricane Katrina struck New Orleans, Decatur employed between 600 and 650
workers. After Hurricane Katrina struck New Orleans, the size of Decatur’s
staff dropped to between 90 and 110 workers. Decatur attempted to recruit local
residents to join its staff, but its efforts were largely unsuccessful. Decatur
urgently needed to hire maintenance, housekeeping, and front-desk employees.
Virginia Pickering, a Baton Rouge businesswoman, read a news article
that mentioned Decatur’s staff shortage. Pickering owned and operated Accent
Personnel Services, Inc., a company that guided U.S. employers through the
process of becoming H-2B visa sponsors.1 As H-2B visa sponsors, the employers
legally could hire foreign workers to fill temporary job positions.
1
The term “H-2B visa” refers to a visa authorized by 8 U.S.C. § 1101(a)(15)(H)(ii)(b).
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No. 07-30942
Pickering advertised Accent Personnel’s services to Decatur’s chief
executive officer, F. Patrick Quinn III. Pickering offered to guide Decatur
through the H-2B application process, to oversee the recruitment of H-2B
workers, and to coordinate the workers’ arrival times in the United States. If
Decatur were to use Pickering’s services, it would need only to supply Pickering
with information that she would need to complete Decatur’s H-2B sponsorship
application, to pay H-2B sponsorship-application fees, and to meet its new
employees when they arrived in New Orleans. Pickering would do everything
else necessary to secure the temporary workers for Decatur. For these services,
Pickering would charge Decatur $300 per job position filled.
Quinn agreed that Decatur would use Pickering’s services to hire
housekeepers, maintenance workers, and front-desk clerks; and Pickering went
to work. She identified the wage rate at which Decatur would need to pay the
housekeepers, maintenance workers, and front-desk clerks to comply with
Department of Labor regulations. She ensured that Decatur recruited U.S.
citizens to fill its open job positions before offering the same positions to foreign
workers. She prepared Decatur’s application to sponsor H-2B visas. She also
prepared, and a Decatur manager signed, a blank job offer for each open job
position.
Unbeknownst to Decatur, Pickering also owned and operated a second
company: VP Consultants, LLC. Through VP Consultants, Pickering offered a
service that connected with her services at Accent Personnel: after identifying
U.S. employers (such as Decatur) that were sponsoring H-2B visas, she provided
this information, for a fee, to recruitment companies that represented foreign
workers seeking temporary U.S. employment. In exchange for $900 per Decatur
job position, or “referral,” VP Consultants informed Global Services, Inc., of 70
hotel-clerk positions; EuroUSA, Inc., of 70 housekeeping positions; and
International Jobs & Studies S.A.C. of 130 maintenance positions.
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No. 07-30942
Although VP Consultants generated revenue by informing recruitment
companies of Decatur’s job positions, Pickering testified that she also had been
willing to share information about Decatur’s job positions with foreign workers
who contacted VP Consultants directly. However, there is no indication in the
record that such contacts occurred or that, given the foreign workers’
circumstances, such contacts were possible. It also is unclear what fee, if any,
VP Consultants would have charged the workers to receive information about
Decatur’s job positions.
In theory, the guest workers also could have contacted Decatur directly to
learn about Decatur’s job positions; Decatur would have referred such inquiries
to Pickering. No guest worker contacted Decatur directly, and it is unclear
whether such contact would have been feasible.
Nevertheless, each worker hired a recruitment company to locate H-2B job
opportunities on his or her behalf, to guide him or her through the H-2B visa
application process, and to arrange transportation to the United States. Each
recruitment company charged between $1,700 and $2,000 for its services.2 In
addition to this fee, each recruitment company required workers to pay their
own visa-application fees as well as all transportation expenses necessary to
relocate to the United States.3 Altogether, each guest worker paid between
approximately $3,000 and approximately $5,000 in recruitment, transportation,
and visa expenses before relocating to the United States.
When the guest workers arrived in New Orleans, Decatur conducted a
week-long orientation session, for which it paid the workers; and the guest
2
The parties refer to these fees alternatively as “recruitment expenses” and “hiring
expenses.” We will refer to the fees as “recruitment expenses.”
3
For brevity, we will refer to the transportation expenses necessary to relocate to the
United States as “transportation expenses” or “inbound transportation expenses.” These
shorthand references in no way describe the expenses necessary to travel daily from home to
work. Such expenses are not before us in this case.
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No. 07-30942
workers began to work. Decatur paid the guest workers whom it hired through
Global Services, Inc., $6.09 per hour, the guest workers whom it hired through
EuroUSA, Inc., $6.02 per hour, and the guest workers whom it hired through
International Jobs & Studies S.A.C. $7.79 per hour. As we have said, Decatur
did not reimburse the guest workers for their recruitment, transportation, or
visa expenses, all of which they incurred before relocating to the United States.
The guest workers, proceeding under the FLSA, filed a complaint in
federal district court seeking to recover these expenses, as well as liquidated
damages, costs, and attorney’s fees. Decatur defended on grounds that the FLSA
does not obligate it to reimburse the guest workers for their recruitment,
transportation, or visa expenses. To this end, Decatur filed a motion to dismiss
and/or for summary judgment; and the guest workers filed a cross-motion for
summary judgment. In a single order, the district court denied Decatur’s motion
and granted the guest workers’ motion in part, insofar as it allowed them to
proceed with their FLSA claim.
Decatur asked the district court to certify its order for interlocutory
appeal. The district court granted Decatur’s motion. It identified, as a
controlling issue of law as to which there is substantial ground for difference of
opinion, the question “whether non-agricultural H-2B guestworkers are entitled
to the protections of the FLSA.” A motions panel of this court then permitted
Decatur to file this interlocutory appeal under 28 U.S.C. § 1292(b). The district
court’s proceedings have not been stayed.
II.
We first must consider our jurisdiction over this interlocutory appeal. The
guest workers contend that we lack jurisdiction—or, in the alternative, that our
jurisdiction is limited to answering the single question identified by the district
court as a controlling issue of law.
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No. 07-30942
A motions panel’s decision to allow an interlocutory appeal is not binding
upon the panel that subsequently considers the appeal’s merits; “the merits
panel may conclude that the initial decision to hear the appeal was, or was later
rendered, improvident. If the merits panel reaches that conclusion, it must
vacate the earlier order granting leave to appeal and must remand the case to
the district court.” United States v. Bear Marine Servs., 696 F.2d 1117, 1119
(5th Cir. 1983). We therefore will review the motions panel’s decision for
improvidence.
We initially examine whether our jurisdiction over this appeal, if accepted,
is limited to the single question identified by the district court as controlling.
The Supreme Court has held quite clearly that it is not; 28 U.S.C. § 1292(b)
grants jurisdiction “over any question that is included within the order that
contains the controlling question of law identified by the district court.” Yamaha
Motor Corp. v. Calhoun, 516 U.S. 199, 204 (1996). Here, the order for which the
district court certified interlocutory appeal contains three questions in addition
to the question that the district court identified as controlling: whether the
FLSA requires an employer to reimburse guest workers for: (1) their recruitment
expenses, (2) their transportation expenses, or (3) their visa expenses.
Castellanos-Contreras v. Decatur Hotels, Inc., No. 06-4340, at 2 (E.D. La. July
19, 2007) (order denying motion to alter or amend judgment, granting motion to
certify interlocutory appeal, and denying motion to stay pending interlocutory
appeal). In the light of Yamaha, we may consider these questions as well as the
threshold question whether H-2B guest workers are entitled to the FLSA’s
protections.
Whether the FLSA entitles guest workers to reimbursement for their
recruitment, transportation, or visa expenses are, as we have noted, questions
of first impression for this court. We conclude that these questions are
controlling questions of law in this case, as to which there is substantial ground
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No. 07-30942
for difference of opinion. The motions panel’s decision to grant interlocutory
review was not improvident. We now will consider the questions before us.
III.
In response to the question identified by the district court, we hold that
guest workers are entitled to FLSA protection. See In re Reyes, 814 F.2d 168,
170 (5th Cir. 1987) (“[T]he protections of the Fair Labor Standards Act are
applicable to citizens and aliens alike and whether the alien is documented or
undocumented is irrelevant.”). Whether the FLSA entitles guest workers to
reimbursement of recruitment, transportation, or visa expenses merits lengthier
discussion.
A.
The guest workers contend that they are entitled to reimbursement
because, under 29 U.S.C. § 203(m), the expenses they incurred are de facto
deductions from cash wages received for their first week of work, leaving a
balance owed them by Decatur. In other words, they liken these expenses (in an
inverse way) to employer-furnished “facilities,” such as room and board, which
the employer may deduct from an employee’s wages; only here, the guest
workers contend that Decatur must reimburse them for expenses that they
incurred before their first workweek began.
Section 203(m) defines wages as cash or “the reasonable cost . . . to the
employer of furnishing [the] employee with board, lodging, or other facilities, if
such board, lodging, or other facilities are customarily furnished by such
employer to his employees.” (Emphasis added.) The provision’s plain language
thus permits employers flexibility in the method of paying employees. This
section of the FLSA, contrary to the guest workers’ suggestion, does not impose
liability upon employers for expenses that employees incur. See Donovan v.
Miller Props., Inc., 711 F.2d 49, 50 (5th Cir. 1983) (per curiam) (“[S]ection 3(m)
of the Fair Labor Standards Act, 29 U.S.C. § 203(m), . . . allows an employer to
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No. 07-30942
credit toward its obligation to pay the minimum wage ‘the reasonable cost . . . of
furnishing [an] employee with board, lodging, or other facilities’ . . . .”) (emphasis
added). Section 203(m) provides no ground for Decatur to have violated the
FLSA by refusing to reimburse the guest workers for recruitment,
transportation, and visa expenses that they incurred.
B.
We thus turn to the argument that Decatur’s failure to pay these pre-
employment expenses encumbered the guest workers’ wages, so that Decatur did
not pay the wages “finally and unconditionally or ‘free and clear’”:
Whether in cash or in facilities, “wages” 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.” The wage
requirements of the Act will not be met where the
employee “kicks-back” directly or indirectly to the
employer or to another person for the employer’s benefit
the whole or part of the wage delivered to the employee.
This is true whether the “kick-back” is made in cash or
in other than cash. For example, if it is a requirement
of the employer that the employee must provide tools of
the trade which will be used in or are specifically
required for the performance of the employer’s
particular work, there would be a violation of the Act in
any workweek when the cost of such tools purchased by
the employee cuts into the minimum or overtime wages
required to be paid him under the Act.
29 C.F.R. § 531.35.
The above-quoted regulation does not define when an employee-incurred
expense constitutes a kick-back. Our precedents, however, clarify that an
employer-imposed condition of employment is a kick-back if it “tend[s] to shift
part of the employer’s business expense to the employees.” Mayhue’s Super
Liquor Stores, Inc. v. Hodgson, 464 F.2d 1196, 1199 (5th Cir. 1972).
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No. 07-30942
We now consider whether, under 29 C.F.R. § 531.35, the guest workers are
entitled to reimbursement of their recruitment, transportation, or visa expenses.
1.
We begin with the visa expenses. Although § 531.35 does not specifically
address employers’ obligation to reimburse guest workers for these expenses,
other regulations clarify that employee-paid expenses to obtain H-2B visas more
properly belong to the guest worker than to the employer. See 22 C.F.R.
§§ 40.1(l)(1) (requiring nonimmigrant visa applicants, such as the guest workers
here, to submit processing fees when they apply for visas). The expense of
applying to become a sponsoring employer of H-2B employees, by contrast, more
properly belongs to the employer. See 8 C.F.R. §§ 103.7(a),
103.7(b)(1), 214.2(h)(2)(i)(A) (requiring, collectively, that a U.S. employer submit
certain forms and filing fees to become an H-2B visa sponsor). These
regulations, which assign H-2B visa processing fees to visa applicants and H-2B
sponsorship-application fees to employers, show that requiring the guest
workers to bear the visa expenses at issue did not tend to shift part of Decatur’s
business expense to the guest workers. We hold that Decatur has no FLSA
responsibility to reimburse the guest workers for the visa expenses that the
employees incurred.
2.
We next consider the transportation expenses. For many years, the
Department of Labor interpreted the FLSA and its implementing regulations as
requiring employers to bear guest workers’ inbound transportation expenses.
See Wage & Hour Div. Op. Ltr., 1990 DOLWH LEXIS 1, at *3 (June 27, 1990)
(“Under the FLSA, it has always been the position of the Department of Labor
that no deduction, that cuts into the minium wage, may be made for
transportation of workers from the point of hire and return to that
point . . . . [S]uch transportation costs [are] primarily for the benefit of the
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No. 07-30942
employer.”). The agency, however, has called this interpretation into question.
See Labor Certification Process and Enforcement for Temporary Employment in
Occupations Other Than Agriculture or Registered Nursing in the United States
(H–2B Workers), and Other Technical Changes, 73 Fed. Reg. 78020, 78041 (Dec.
19, 2008) (“[T]he cost[] of relocation to the site of the job opportunity generally
is not an ‘incident’ of an H-2B worker’s employment within the meaning of
29 CFR 531.32, and is not primarily for the benefit of the H-2B employer.”);
Withdrawal of Interpretation of the Fair Labor Standards Act Concerning
Relocation Expenses Incurred by H-2A and H-2B Workers, 74 Fed. Reg. 13261,
13262 (Mar. 26, 2009) (“DOL believes that this issue warrants further review.
Consequently . . . DOL withdraws the [December 19, 2008,] FLSA
interpretation . . . for further consideration and the interpretation may not be
relied upon as a statement of agency policy . . . .” (footnote omitted)); see also
De Luna-Guerrero v. N.C. Grower’s Ass’n, 338 F. Supp. 2d 649, 659 (E.D.N.C.
2004) (“[T]he issue [of an employer’s liability for transportation expenses] has
been under review by the DOL. . . . DOL’s policy regarding de facto deductions
[of transportation expenses] is anything but clear.”); Rivera v. Brickman Group,
Ltd., 2008 U.S. Dist. LEXIS 1167, at *37-39 (E.D. Pa. Jan. 7, 2008) (“The
DeLuna-Guerrero court refused to rely on the opinion letters because it believed
the Department of Labor’s position to be too unclear. I agree, and in so doing,
I note that the Department of Labor’s position is not merely unclear, but
untenable. * * * Given the apparent (and now more than thirteen-year-old)
incoherence at the Department of Labor with regard to this issue, I am not
persuaded that I should accord the older opinion letters any significant weight
[under Auer v. Robbins, 519 U.S. 452 (1997), or Skidmore v. Swift & Co., 323
U.S. 134 (1944)].”).
We agree with the Rivera court that Auer deference to the DOL’s older
interpretation seems inappropriate. Furthermore, inasmuch as the DOL never
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No. 07-30942
fully explained why it adopted that interpretation in the first place, we agree
with the Eleventh Circuit that Skidmore deference seems inappropriate. See
Arriaga v. Fla. Pac. Farms, 305 F.3d 1228, 1239 (11th Cir. 2002) (“Because of
this lack of explanation, it is impossible to weigh the ‘validity of its reasoning’
or the ‘thoroughness [] in its consideration.’” (quoting Skidmore, 323 U.S. at 140)
(alteration in original)). Relying on case law that defers to the interpretation
similarly seems inappropriate, and thus we can accord no weight to the guest
workers’ cited authorities such as Marshall v. Glassboro Service Ass’n, 1979 U.S.
Dist. LEXIS 9053, at *6 (D.N.J. Oct. 19, 1979); and Torreblanca v. Naas Foods,
Inc., 1980 U.S. Dist. LEXIS 13893, at *13 (N.D. Ind. Feb. 25, 1980).
As is the case with visa expenses, the regulation addressing employer kick-
backs does not specify whether an H-2B guest worker’s inbound transportation
expenses belong more properly to the employer or to the guest worker. Other
statutory and regulatory provisions may guide this determination.
Two provisions have some relevance. Under the Immigration and
Nationality Act, an H-2B guest worker’s outbound transportation expenses
sometimes belong to the employer. See 8 U.S.C. § 1184(c)(5)(A).4 Under U.S.
Citizenship and Immigration Service regulations, an H-2A agricultural guest
worker’s inbound transportation expenses sometimes belong to the employer.
See 20 C.F.R. § 655.102(b)(5)(i). No provision, however, requires an employer to
bear an H-2B guest worker’s inbound transportation expenses. We find silence
4
The guest workers contend, under Rivera, that the Immigration and Nationality Act
has no bearing on these FLSA issues. We find Rivera unhelpful for this point. The court there
assumed that the FLSA required employers to reimburse guest workers for inbound
transportation expenses. See 2008 U.S. Dist. LEXIS 1167, at *8-9. From this assumption, it
considered only whether 8 U.S.C. § 1184(c)(5)(A) conflicts with and overrides the FLSA. See
id. at *9-10. We consider the antecedent question whether the FLSA requires an employer to
reimburse guest workers for inbound transportation expenses. Because we conclude that it
does not, we do not reach Rivera’s question and do not find that case helpful in answering the
question before us.
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No. 07-30942
in this context indicative that Congress most likely did not intend for the
employer to bear H-2B guest workers’ inbound transportation expenses.5
The guest workers do cite two cases which, without relying on the DOL’s
now-unclear FLSA interpretation, hold that employers must bear guest workers’
inbound transportation expenses. See Arriaga, 305 F.3d at 1244 (11th Cir.
2002); Rivera, 2008 U.S. Dist. LEXIS 1167, at *42-44. Arriaga involves H-2A
guest workers. It holds that employers must bear guest workers’ inbound
transportation expenses because the expenses are “incident of and necessary to”
the guest workers’ employment. See 305 F.3d at 1241-44. We find Arriaga
distinguishable insofar as its analysis derives from the case’s H-2A, as opposed
to H-2B, origins. Arriaga also is distinguishable because its “incident of and
necessary to” standard originates from 29 C.F.R. § 531.32 instead of § 531.35.
Section 531.32 implements 29 U.S.C. § 203(m); and, as we have said, our
Donovan precedent from 1983 informs us that, under Fifth Circuit law, § 203(m)
imposes no obligation on employers to bear employee-incurred expenses. We will
not follow Arriaga.
Rivera essentially does follow Arriaga, albeit in the H-2B context. Rivera
quotes 29 C.F.R. § 531.35 at length, 2008 U.S. Dist. LEXIS 1167, at *36-37, but
ultimately decides the issue of transportation expenses under 29 U.S.C.
§ 203(m): “point-of-hire transportation is primarily for the employer’s benefit,
both because it is dissimilar to lodging and board, and because the expense
arises out of Brickman’s decision actively to recruit workers in foreign
countries.” Id. at *43. We do not necessarily agree with Rivera that Arriaga’s
reasoning extends so readily from H-2A guest workers to H-2B guest workers.
5
Furthermore, Decatur’s circumstances differ substantially from those triggering an
employer’s liability under 8 U.S.C. § 1184(c)(5)(A). Section 1184(c)(5)(A) ensures that an early-
dismissed guest worker has the means to leave the United States. Such circumstances are not
relevant here.
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No. 07-30942
In any event, Donovan forecloses us from following Rivera’s § 203(m)-based
analysis. Just as we will not follow Arriaga, we will not follow Rivera.
On the authorities before us, we hold that the FLSA does not obligate
Decatur to reimburse its guest workers for their inbound transportation
expenses.6
3.
Finally, we consider whether the FLSA obligates Decatur to reimburse its
guest workers for the expenses that they incurred with foreign recruitment
companies. The FLSA’s provisions do not require reimbursement of these
employee-incurred expenses. See 29 U.S.C. § 201 et seq. Neither do the FLSA’s
implementing regulations—unless the expenses were “kick-backs” to Decatur.
See 29 C.F.R. § 531.35.
We hold that the recruitment expenses were not kick-backs within the
meaning of § 531.35. The expenses differed in all fundamental characteristics
from the expenses that our court has labeled kick-backs. See Mayhue’s Super
Liquor Stores, Inc. v. Hodgson, 464 F.2d 1196, 1199 (5th Cir. 1972) (deduction
from cashiers’ wages to pay for every shortage in employer cash-register
accounts, regardless of the reason for the shortage); Brennan v. Veterans
Cleaning Serv., Inc., 482 F.2d 1362, 1370 (5th Cir. 1973) (employee’s wage
deduction in favor of employer to recover the cost of a wrecked company truck).
The expenses were not treated as an employer obligation by custom or practice
of Decatur’s industry. In sum, there is no basis in custom, practice, or law to
include the recruitment expenses as part of Decatur’s business expense.
6
Because we hold that the FLSA does not obligate Decatur to reimburse the guest
workers for their transportation expenses, we do not consider Decatur’s argument in the
alternative that, even if the FLSA otherwise purports to obligate reimbursement, the Portal-
to-Portal Act and Immigration and Nationality Act nevertheless bar recovery.
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No. 07-30942
Our attention, however, has been brought to two relatively new
regulations that for the first time address unscrupulous practices in recruiting
workers to participate in the H-2B visa program. Effective January 18, 2009,
the Department of Labor requires an employer seeking H-2B labor certification
to attest that “[t]he employer has contractually forbidden any foreign labor
contractor or recruiter whom the employer engages in international recruitment
of H-2B workers to seek or receive payments from prospective employees, except
as provided for in DHS regulations at 8 CFR 214.2(h)(5)(xi)(A).” 20 C.F.R.
§ 655.22(g)(2). Also effective January 18, 2009, the Department of Homeland
Security forbids an employer, employer’s agent, recruiter, or similar employment
service from collecting any “job placement fee or other compensation (either
direct or indirect)” from a foreign worker as a condition of an H-2B job offer or
as a condition of H-2B employment. 8 C.F.R. § 214.2(h)(6)(i)(B).7 These
regulations ultimately may influence whether H-2B employers will reimburse
the recruitment expenses of future guest workers, but they do not affect
Decatur’s obligations here. See, e.g., Sierra Med. Ctr. v. Sullivan, 902 F.2d 388,
392 (5th Cir. 1997) (“Generally, courts will not apply regulations retroactively
unless their language so requires.”); 20 C.F.R. § 655.5 (indicating, by creating a
transition period for implementing the Department of Labor’s January 2009
changes to 20 C.F.R. part 655, that the changes do not apply retroactively); 73
Fed. Reg. 78103, 78127-30 (Dec. 19, 2008) (giving no indication that the
Department of Labor’s January 2009 changes to 8 C.F.R. part 214 apply
retroactively). Furthermore, because the regulations for the first time forbid an
7
This regulation does not prohibit an H-2B visa sponsor from requiring guest workers
to pay for transportation and visa expenses. See 8 C.F.R. § 214.2(h)(6)(i)(B) (excepting from
its prohibition of worker-incurred expenses “the lower of the actual cost or fair market value
of transportation to such employment and any government-mandated passport, visa, or
inspection fees, to the extent that the passing of such costs to the beneficiary [guest worker]
is not prohibited by statute, unless the employer, agent, facilitator, recruiter, or similar
employment service has agreed with the beneficiary that it will pay such costs and fees”).
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No. 07-30942
H-2B employer from permitting guest workers to bear such recruitment
expenses, they strongly suggest that the guest workers’ recruitment expenses
incurred long before the regulations became effective were not part of Decatur’s
business expense.
Finally, our conclusion is not disturbed by the one case that the guest
workers cite holding recruitment expenses can be part of an employer’s business
expense. See Rivera, 2008 U.S. Dist. LEXIS 1167, at *47-*50. The employer
there, Brickman, required guest workers to hire a particular recruitment
company, which charged them fees. See id. at *48-*49. Because the employer
required the guest workers to use the recruitment company, the court concluded
“that fees associated with Brickman-designated workers’ representatives [we]re
costs ‘primarily for the benefit of the employer,’ and that Brickman, therefore,
was not allowed to pass those costs along [to the guest workers] to the extent
that doing so reduced their wages below the FLSA minimum.” Id. at *50.
Assuming the correctness and continued validity of that case’s reasoning,
the case is distinguishable. Here, there is no evidence that Decatur even knew
about the foreign recruitment companies, much less that the companies charged
a fee to the guest workers as a condition of receiving an offer of employment.
Decatur paid Pickering $300 per job position filled, which itself was in the
nature of an employer-paid recruitment fee. Although the record does show that
the guest workers knew of no other way to obtain employment with Decatur, the
record also shows that Decatur did not require, or approve, any guest worker to
pay any sum to anyone as a condition of an H-2B job offer or as a condition of
H-2B employment.
For all of the foregoing reasons, we hold that the FLSA does not obligate
Decatur to reimburse the guest workers for their recruitment expenses.
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No. 07-30942
IV.
In sum, we hold that Decatur incurred no FLSA liability to reimburse its
guest workers for the recruitment fees, transportation costs, or visa fees that
they incurred to work in the United States. We REVERSE the summary
judgment, RENDER judgment in favor of Decatur, and REMAND for entry of
same.
REVERSED and RENDERED; REMANDED for entry of judgment.
16