Magana-Munoz v. West Coast Berry Farms, LLC

Background

Plaintiffs Raul Magana-Munoz and Jose Santiago Herrera-Vera worked as H-2A agricultural guest workers for Rancho Nuevo Harvesting, Inc., providing labor for West Coast Berry Farms, LLC, during 2018. They alleged that the defendants violated the Fair Labor Standards Act (FLSA) by failing to pay required minimum wages for compensable work time and by shifting costs to workers. The alleged unpaid time and expenses included travel from Mexico to the United States, travel from employer housing to worksites, travel between permanent worksites, visa-related expenses, meal periods, and other travel time.

During onboarding, the plaintiffs signed arbitration agreements. The agreements required employment-related disputes to be resolved in individual arbitration and limited participation in class, collective, or joint proceedings. The defendants moved to compel arbitration. The plaintiffs argued, among other things, that the arbitration agreement was invalid because it had not been included in the job offer and job order submitted for approval under the H-2A program.

The plaintiffs also moved for preliminary certification of an FLSA collective action. They sought to include workers employed by Rancho Nuevo under 2018 H-2A job orders. The defendants did not dispute that the plaintiffs had presented a plausible FLSA violation but argued that more evidence was needed and that the proposed group was not similarly situated.

Arbitration ruling

The court denied the defendants’ motion to compel arbitration. It held that the arbitration agreement was a material term and condition of employment because it required workers to give up the right to resolve disputes in court and to participate in class or collective actions. Under the H-2A regulations discussed by the court, material employment terms had to be included in the job offer provided to H-2A workers and in the job order submitted for government approval.

The job offer submitted by the defendants did not include the arbitration provision. Instead, the defendants executed a separate arbitration agreement with the plaintiffs during orientation. The court held that this breached the defendants’ disclosure obligation and made the separate arbitration agreement void. Because it reached that issue, the court did not decide the plaintiffs’ other arguments challenging the agreement’s validity.

Collective-action certification

The court granted the plaintiffs’ motion for preliminary certification under the FLSA. At this early stage, the court applied a lenient standard and required plausible allegations that the alleged violations were experienced by other workers. The court found that the plaintiffs’ declarations supported allegations of a common practice of not compensating H-2A workers for visa expenses, meal periods, and travel time.

The court also found that the proposed workers were similarly situated. Although the workers performed harvesting work under different job orders, at different locations, for different growers, and at somewhat different times, they worked for Rancho Nuevo in the same general job capacity and under common employment circumstances. The court found that the alleged common policy or practice—not the particular harvesting location—was material to the FLSA claims.

Notice and other orders

Because preliminary certification was granted, the court authorized notice to potential collective members. Notice was to be sent by a third-party administrator, with the parties splitting the cost. The parties were directed to consider direct mail and other methods, including text messages, WhatsApp, and social media. The court stated that passport numbers did not need to be produced at that time.

The notice was to use a three-year limitations period at that stage, while preserving the defendants’ ability to argue for a two-year period. Potential members were given four months to opt in. The notice was to be provided in English and Spanish, include contact information for counsel on both sides, identify the relevant claims and workers, and explain that participants had obligations in the case. Plaintiffs were entitled to names and contact information for H-2A workers employed by Rancho Nuevo in 2018.

The court also granted both parties’ requests for judicial notice of public-record matters. It terminated Docket 15 because it was duplicative of Docket 14. In its conclusion, the court stated that the defendants’ motion to compel arbitration was denied and the plaintiffs’ motion for collective-action certification was granted.