Heath v. Perdue Farms, Inc. - 87 F. Supp. 2d 452 (D. Md. 2000)

Rule:

To determine the economic reality of the relationship between workers and their putative employer, courts look at the following six factors: (1) the degree of control which the putative employer has over the manner in which the work is performed; (2) the opportunities for profit or loss dependent upon the managerial skill of the worker; (3) the putative employee's investment in equipment or material; (4) the degree of skill required for the work; (5) the permanence of the working relationship; and (6) whether the service rendered is an integral part of the putative employer's business.

Facts:

Plaintiffs were employed as “chicken catchers” for processing plants owned and operated by defendant Perdue Farms, Inc. Plaintiffs consistently worked more than 40 hours per week but were not paid overtime wages. Consequently, plaintiffs instituted the present action to recover overtime wages to which they believed they were entitled under the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. ["FLSA"], and similar provisions of the Maryland Wage and Hour Law, Md. Lab. & Emp. Code Ann. §§ 3-401 to 3-431. In its answer, Perdue argued that the plaintiffs were not entitled to overtime pay under the FLSA since Perdue was neither the sole nor joint employer of its chicken catchers. Instead, plaintiffs were the employees of the crew leaders, who were themselves independent contractors of Perdue. Moreover, plaintiffs qualified as “agricultural laborers,” who were exempted from the overtime requirements of the FLSA. In addition to disputing Perdue’s arguments in their cross-motion, plaintiffs asserted that Perdue’s violation of the FLSA was willful, thus, rendering Perdue liable for three years of back overtime pay, as opposed to two years for non-willful violations.

Issue:

1. Was there an employer-employee relationship between Perdue and the plaintiffs which could serve as basis for Perdue’s liability for overtime pay?
2. Was Perdue’s violation of the FLSA willful, thereby making it liable for three years of back overtime pay?

Answer:

1) Yes. 2) Yes.

Conclusion:

Applying a six-factor test, the court ruled that there was an employer/employee relationship between the parties under the Fair Labor Standards Act, 29 U.S.C.S.§ 201 et seq. ("FLSA"), and Maryland Wage and Hour Law, Md. Lab. & Empl. Code Ann. § 3-401 et seq. The plaintiffs were not exempt, as agricultural workers, from the statutes' overtime wage requirements. The court further held that the defendant's violation of the FLSA was willful, in that it either knew or showed reckless disregard for the matter of whether its conduct was prohibited by the FLSA; it was thus liable for three years of back overtime wages, as opposed to two years for non-willful violations.