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JENKINS v. S & A CHAISSAN & SONS

March 15, 1978

MARVIN JENKINS, LOVETTE BELCHER, and WILLIE C. BROWN, Plaintiffs,
v.
S & A CHAISSAN & SONS, INC., VALLEY GROWERS CO-OP, INC., ASHTON HART, Secretary of VALLEY GROWERS CO-OP, INC., and ALDO V. CHAISSAN, SILVIO CHAISSAN, LELAND BEHNKE, officers, owners, agents and stockholders of S & A CHAISSAN & SONS, INC., Defendants. JOHN McDONALD, ANGIN McNATT, CLARENCE CALLOWAY, and DONNIE JACKSON, Plaintiffs, v. MICHAEL NARDONE, JOHN J. CURRIE, MICHAEL NARDONE d/b/a MICHAEL NARDONE COLD STORAGE, JOHN F. CURRIE, JR., MID-HUDSON GROWERS CO-OPERATIVE, INC. and CHARLES ANDOLA, Defendants. JAMES LUELLEN, WILLIE J. JOHNSON, WALTER MYLES, LEROY JOHNSON, and THEODORE YOUNG, Plaintiffs, v. STANLEY ORCHARDS, INC., VALLEY GROWERS CO-OP, INC., ASHTON HART, Secretary of VALLEY GROWERS CO-OP, INC., LESTER COHN, President of STANLEY ORCHARDS, INC., and STANLEY COHN, owners, agents, and stockholders of STANLEY ORCHARDS, INC., Defendants



The opinion of the court was delivered by: WERKER

HENRY F. WERKER, D.J.

 I

 The migrant farmworker plaintiffs in these consolidated actions seek to vindicate certain statutory and common law rights which they allege were infringed by the defendants, apple growers and associations of apple growers in the Hudson Valley and certain of their officers and shareholders. Plaintiffs assert that they are entitled to declaratory and equitable relief as well as money damages for the defendants' denial of their rights under the Wagner-Peyser Act of 1933, 29 U.S.C. § 49 et seq. (hereinafter "the Wagner-Peyser Act") and its regulations and common law breach of contract. Plaintiffs further assert that they are entitled to an award of actual damages or a statutory minimum of $500 for each of defendants' violations of the Farm Labor Contractor Registration Act of 1963, as amended, 7 U.S.C. § 2041 et seq. (hereinafter "FLCRA"). The matter comes before the Court pursuant to defendants' motions to dismiss the first amended complaints (hereinafter "the complaints") for failure to state claims upon which relief can be granted and lack of subject matter jurisdiction. Rules 12(b)(1), (6), Federal Rules of Civil Procedure. To facilitate discussion of these motions the Court will focus its attention on the complaint in Jenkins v. S & A Chaissan & Sons, Inc. (77 Civ. 816), which parallels the allegations made in the other two consolidated actions. *fn1"

 II. BACKGROUND

 The complaint alleges that both defendant S & A Chaissan & Sons, Inc. (hereinafter "SAC"), which is said to be in the business of growing apples, and defendant Valley Growers Co-op, Inc. (hereinafter "Valley Growers"), which is said to be an association of apple growers, through their officers, agents and employees, "recruited, solicited, furnished and hired plaintiffs." It goes on to recite that Ashton Hart is the secretary of Valley Growers; that Leland Behnke is an officer of SAC and responsible for its day-to-day operations; that defendants Aldo and Silvio Chaissan are the officers, owners, agents and stockholders of SAC; and that the plaintiffs were hired by the defendants to work the 1975 apple harvest in Ulster County, New York after having been recruited from other states for this task through the United States Employment and Training Service system (hereinafter "the USTES system") of the Department of Labor (hereinafter "the Department").

 Established pursuant to the Wagner-Peyser Act, the USTES system operates through a network of federally-funded state employment services and provides a mechanism by which employers located in sections of the country where there are too few workers of a given kind can obtain government assistance in obtaining qualified workers from other areas. This assistance is provided without cost to either the employer or the employee. 20 C.F.R. § 602.2(a)(1977). Generally, before a request for workers, commonly known as a "job" or "clearance" order, can be sent through the interstate facilities of the USTES system, the employer and the state agency within the employer's state must each attempt to secure sufficient workers locally. *fn2" In addition, for agricultural job orders to be placed into the USTES system, certain further requirements must be fulfilled, among them: that the housing facilities for the agricultural employees comport with specified minimum standards, 20 C.F.R. §§ 620.1, 653.108(d)(2) (1977); that the employer sign an assurance that the job order accurately describes all of the material terms and conditions of the job, id. § 653.108(c)(3); and that the wages and working conditions offered the workers equal those of similarly employed persons in the intended area of employment, id. § (c)(4). Once these prerequisites have been met, suitable workers can be sought from other localities through a series of concentric searches through the USTES system, beginning with the immediate region and later directed to areas of the country where the supply of workers of the desired type exceeds the demand. In order to police the operation of the system, the Wagner-Peyser Act provides for the withdrawal of federal funding from state agencies found not to be in compliance with the regulatory scheme, 29 U.S.C. § 49d(b), and the state agencies themselves are authorized to refuse job orders from employers who have violated the published procedures. 20 C.F.R. §§ 658.500-658.502 (1977).

 Plaintiffs assert that defendants violated the Wagner-Peyser Act and its regulatory counterparts by failing to live up to the terms of their job orders. In particular, plaintiffs allege that defendants deducted excessive amounts from plaintiff wages; failed to provide employment for the "guaranteed minimum period," failed to keep adequate payroll records; failed to provide required written earnings statements; and paid wages which were both inadequate and discrimnatory. *fn3"

 Plaintiffs also assert claims against defendants under FLCRA, which was enacted to control abuses of migrant farmworkers by farm labor contractors, more commonly termed "crew leaders" or "crew chiefs." Such persons "are the middlemen in making work arrangements between farmworkers and growers and in this capacity often recruit, transport, supervise, handle pay arrangements, and otherwise act as an intermediary between the migrant worker and the farmer." Senate Report on FLCRA, S. Rep. No. 202, 88th Cong., 2d Sess. 1, reprinted in [1964] U.S. Code Cong. & Ad. News 3690, 3691 (hereinafter "Senate Report").

 Under FLCRA, a farm labor contractor must register and disclose to each worker the terms and conditions of his employment. 7 U.S.C. §§ 2043, 2045. Moreover, before an employer can engage the services of a farm labor contractor he must first determine that the contractor selected has a valid certificate of registration. 7 U.S.C. § 2043(c). For failure to comply with FLCRA, farm labor contractors, and presumably others, can be sued by migrant farmworkers, who are entitled to recover damages in an amount "equal to the amount of actual damages of $500 for each [FLCRA] violation." *fn4"

 Plaintiffs have asserted six separate FLCRA claims against defendants. The first, second, third and fourth claims for relief are evidently brought against all of the defendants and allege that they did not properly post or disclose the terms and conditions of plaintiffs' employment and occupancy of housing facilities. *fn5" Also alleged are knowing misrepresentations by the defendants regarding the terms, conditions and existence of employment. *fn6" The fifth claim for relief alleges that Valley Growers and Ashton Hart violated FLCRA by failing to disclose the terms and conditions of employment to the plaintiffs at the time they were recruited and by failing to comply with the terms of the working arrangements entered into with them. *fn7" The eighth claim for relief alleges, in the alternative, that if SAC, Aldo and Silvio Chaissan and Leland Behnke are not farm labor contractors, they nevertheless violated FLCRA by engaging the services of Valley Growers and Ashton Hart without first determining that they possessed valid registration certificates from the Secretary of Labor (hereinafter the "Secretary"). *fn8"

 Finally, plaintiffs have asserted in the seventh, allegedly pendent claim for relief that defendants breached the contract of employment with them by making excessive deductions from their pay; overcharging them for meals; providing substandard housing; failing to comply with FLCRA standards; and failing to provide: (1) the guaranteed minimum period of employment at the guaranteed hourly minimum wage, (2) transportation and subsistence expenses to and from the place of recruitment, and (3) the materials necessary for performance of plaintiffs' job duties.

 Defendants argue that the Wagner-Peyser Act claim must be dismissed because no private cause of action for damages was expressly or impliedly created by that statute. Defendants further contend that the FLCRA claims must be dismissed since each of the defendants either falls outside the definition of a farm labor contractor or is expressly exempt from coverage under that enactment. Finally, defendants maintain that in the absence of a legally sufficient federal cause of action, the breach of contract claim must also be dismissed for want of either diversity or pendent jurisdiction.

 The FLCRA and Wagner-Peyser Act contentions raise several interesting issues which are addressed in this memorandum. In view of the manner in which those claims are resolved, the jurisdictional arguments raised by the defendants need not be considered.

 III. The Wagner-Peyser Act Claim

 Although the Wagner-Peyser Act does not by its terms create a private cause of action to recover damages, both the Fifth Circuit in Gomez v. Florida State Employment Service, 417 F.2d 569 (5th Cir. 1969), and several district courts which have followed that decision, see Cantu v. Owatonna Canning Co., No. 76-374, slip op. at 3-6 (D. Minn. Jan. 6, 1977); Abraham v. Beatrice Foods Co., 418 F. Supp. 1384, 1388 (E.D. Wis. 1976); Vazquez v. Ferre, 404 F. Supp. 815 (D.N.J. 1975); Galindo v. Del Monte Corp., 382 F. Supp. 464 (N.D. Ill. 1974), have considered it appropriate to imply such a remedy after examining both the act and the regulations that accompany it. Defendants maintain that these cases are no longer dispositive in view of (1) the Secretary's recent promulgation of an administrative complaint procedure for the USTES system and (2) the decision of the Supreme Court in Cort v. Ash, 422 U.S. 66, 45 L. Ed. 2d 26, 95 S. Ct. 2080 (1975), which deals with the propriety of implied remedies. I disagree.

 In Gomez, the Fifth Circuit observed as a preliminary matter that Congressional failure to provide an express private remedy was not determinative of whether a cause of action for damages could be stated, since implied remedies were frequently made available by the judiciary in order to further the apparent purpose of Congress. Gomez v. Florida State Employment Service, 417 F.2d at 575-76. The court went on to note that it was desirable to imply a right of action under the Wagner-Peyser Act in view of the unavailability of any other effective remedy for wrongs to migrant workers and the increasing trend toward reliance upon private suits as the means by which the public gained enforcement of important congressional policies. Id. at 576. The opinion in Cort v. Ash makes clear, however, that an implied remedy cannot be made available, as it was in Gomez, merely because there is a need for such relief. See University of Chicago v. McDaniel, 423 U.S. 810, 46 L. Ed. 2d 30, 96 S. Ct. 20 (1975), rev'g mem. 512 F.2d 583 (7th Cir.). Rather, in arriving at its determination a court must examine several factors, as follows:

 
"First, is the plaintiff 'one of the class for whose especial benefit the statute was enacted,' -- that is, does the statute create a federal right in favor of the plaintiff? Second, is there any indication of legislative intent, explicit or implicit, either to create such a remedy or to deny one? Third, is it consistent with the underlying purposes of the legislative scheme to imply such a remedy for the plaintiff? And finally, is the cause of action one traditionally relegated to state law, in an area basically the concern of the States, so that it would be inappropriate to infer a cause of action based solely on federal law?"

 Cort v. Ash, 422 U.S. at 78 (citations omitted). It is my belief that, contrary to the defendants' assertions, each of the factors identified in Cort militates in favor of implying a private civil remedy ...


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