UNITED STATES COURT OF APPEALS FOR THE FIFTH … · and RODOLFO ANTONIO VALDEZ-BAEZ, ... Altagracia...

UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT

___________________________________________________________

No. 07-30942

__________________________________________________________

DANIEL CASTELLANOS-CONTRERAS, OSCAR RICARDO DEHEZA-ORTEGA, and RODOLFO ANTONIO VALDEZ-BAEZ, on behalf of themselves and all others

similarly situated, Plaintiffs-Appellees

v.

DECATUR HOTELS, LLC and F. PATRICK QUINN III, Defendant-Appellant

___________________________________________________________

APPELLEES’ EN BANC BRIEF ___________________________________________________________

On Interlocutory Appeal from the United States District Court

For the Eastern District of Louisiana Case No.: 06-4340

__________________________________________________________ Jennifer J. Rosenbaum Edward Tuddenham LSBA No. 31946 Texas Bar No. 2028300 New Orleans Workers’ Center 1339 Kalmia Rd. NW For Racial Justice Washington DC 20012 217 N. Prieur St. (202) 249-9499 New Orleans, LA 70112 [email protected] (504) 309-5165 [email protected] Mary Bauer Virginia Bar Number 31388 Southern Poverty Law Center 233 Peachtree Street Suite 2150 Atlanta, GA 30303 Tel (404) 521-6700 [email protected]

Certificate of Interested Persons

The undersigned counsel of record certifies that the following listed persons

and entities as described in the fourth sentence of rule 28.2.1 have an interest in the

outcome of this case. These representations are made in order that the judges of

this Court may evaluate possible disqualifications or recusal.

1. Appellees:

Adinolfi Gilbert Cornejo Cornejo Alberto Carlos Mondragon Rios Alejandro García de Aza Altagracia Hernández Maldonado Álvaro Rendon Mendoza Aneudy Rafael Pérez Cabrera Antonio Vargas Leyba Arturo Estrella Arturo Ismael Guardia Caja Arturo Mercado Arias César Augusto Acosta Estrella César Augusto Barrantes Tinoco César Julio Peña García Ciriaca Ovalles Luzon Cynthia Margarita Santana Ciprian de Mariñez Daniel Castellanos Contreras David Wilfredo Paucar Peña Dionel Méndez Eddy German Cruz Gil Edgar Osvaldo Marquina Luizaga Edward Dahua Nacimento Elizabeth Evangelina Rodríguez Jimenez Elizabeth Paco Kari Emilio Enrique Duran Hernández Fernando Javier Pariona Barboza Francis Javier Santos Castillo Francisco Agustin Sotelo Aparicio

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Francisco Ignacio García Aquino Genry Antonio Dilone Peña German Miguel Huaman Huatuco Gustav A. Mesen Jarquin Hector Dominguez Hector Tito Tito Helppi Ramon Frias Agramonte Heriberto Fernández Lorenzo Isaac Salinas Basaldua Isidra Brito Rodríguez Ivan Sukoy Mantilla Salcedo Ivan Vallejo Javier Nicanor Cordova Tucto Jesus Valencia de la Cruz Joel Rosario Then Jorge Antonio Aguilar Apaza Jorge Antonio Sarayasi Estrada Jorge Luis Muñoz Palacios Jorge Luis Urcia Garnique José Alicides Chavez Muñoz José Antonio Fhon Concepcion José Guarionex Urena Llanos José Iver Salazar Sotelo José Manuel Pasache Lomparte José Roman González Coronel José Sánchez Castillo Juan Pablo Cabrera Rodríguez Julia Marcela Magnani Ramos Larry Paul Arango Bleck Leonor Celina Arcani Sarzuri Lorenzo Cotrina Huaman Luís Alberto López Ortiz Luís Alberto Medina Pérez Luís Alejandro Cruz Salcedo Luís Sebastian Rivas Peña Marcial Augusto Paredes Cordova María Teresa Hurtado Jordan Maribel Luciano García Martin Silverio Almonte Miguel Ángel Trujillo Medina

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Misael Soria Vargas Narciso Hernan Astorima Cisneros Nelido Fernandez Fuentes Noelia Altagracia Jiménez Martínez Orestes Israel Ato Estrada Orlando Javier Chaca Valentin Oscar Bellido Gómez Oscar Guevara Davila Oscar Ricardo Deheza Ortega Oscar Rosendo Tapia Carpio Oswaldo Alipio Capacha Valdez Pablo Antenor Mesias Blas Pedro Damian Rivas Segovia Pedro Espinosa Pedro Fernando Cuadros Somocurcio Primitivo Marcial Rodríguez Carretero Raphael Ramirez Caballero Rodolfo Antonio Valdez Báez Rosarito Rosario Báez Ruben Augusto Lora Serrano Salomon Abraham Neyra Spiner Samuel Romero Najarro Segundo Artidoro Vilchez Díaz Serman Norberto Morales Lazarte Silvio Alejandro Requena Soto Teresa Maria Calderón Espinal Victor Hugo Paredes Campos Victor Manuel Becerra Huamani Victor Manuel Bonilla Dippiton Waldo Choque Avendano Wendy Lorenza Isaza Núñez Williams Rafael Moronta Ovalle Yamir Peralta Espinonza

2. Mary Bauer, Andrew Turner, and the Southern Poverty Law Center,

counsel for Appellees; 3. Jennifer J. Rosenbaum and the New Orleans Workers’ Center for Racial

Justice, counsel for Appellees;

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4. Edward Tuddenham, counsel for Apellees;

5. Tracie Washington and the Louisiana Justice Institute, counsel for Appellees;

6. Monica Guizar, former counsel for Appellees;

7. National Immigration Law Center, former counsel for Appellees;

8. Melissa Crow and the law firm of Brown, Goldstein & Levy, LLP,

former counsel for Apellees;

9. Appellants: Decatur Hotels LLC and F. Patrick Quinn, III;

10. Leslie Weill Ehret, Joseph Mole, Ellen Shirer Kovach, Suzanne Risey and the law firm of Frilot LLC , counsel for Appellants;

11. Michael L. Fantaci and the law firm of LeBlanc Butler, LLC, counsel for

Appellants;

12. James L. Stine and the law firm of Wimberly, Lawson, Steckel, & Schneider, P.C. counsel for amicus curiae for Express Forestry, Inc., Eller & Sons Trees, Inc., and Superior Forestry Service, Inc.

13. Ann Margaret Pointer, John E. Thompson, Keith M. Pyburn, Jr., Timothy

H. Scott, and the law firm of Fisher & Phillips LLP, attorneys for Amici Curiae Amelia Island Plantation, American Hotel & Lodging Association, the Basin Harbor Club, the Beaver Run Resort & Conference Center, The Broadmoor, the BW Grand Canyon Squire Inn, the Cheyenne Mountain Resort, the Florida Fruit & Vegetable Association, the Homestead Resort, Hyatt Hotels & Resorts, the Kiawah Island Golf Resort, the Mandoki Hospitality Group, the Maryland Nursery and Landscape Association, Mid-Atlantic Solutions, Inc., the National Council of Agricultural Employers, The Ocean Reef Club, The Sagamore, the Stein Erickson Lodge, and the Virginia Agricultural Employers Association, Inc.

14. All those identified in the parties’ certificate of interested parties and

corporate disclosure.

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15. Amelia Island Plantation, Amicus Curiae (there is no 26.1(a) corporation).

16. American Hotel & Lodging Association, Amicus Curiae (there is no

26.1(a) corporation).

17. Basin Harbor Club, Amicus Curiae (there is no 26.1(a) corporation).

18. Beaver Run Resort & Conference Center, Amicus Curiae (there is no 26.1(a) corporation).

19. The Broadmoor, Amicus Curiae (parent: The Oklahoma Publishing

Company; there is no 26.1(a) corporation).

20. Best Western Grand Canyon Squire Inn, Amicus Curiae (there is no 26.1(a) corporation).

21. Cheyenne Mountain Resort, Amicus Curiae (parent: Benchmark

Hospitality International; there is no 26.1(a) corporation).

22. Florida Fruit & Vegetable Association, Amicus Curiae (there is no 26.1(a) corporation).

23. Georgia Fruit & Vegetable Association, Amicus Curiae (there is no


24. Homestead Resort, Amicus Curiae (parent: Great Inns of the Rockies, Inc.; there is no 26.1(a) corporation).

25. Hyatt Hotels & Resorts, Amicus Curiae (there is no 26.1(a) corporation).

26. Kiawah Island Golf Resort, Amicus Curiae (CCA Industries, Inc.; there

is no 26.1(a) corporation).

27. Mandoki Hospitality Group, Amicus Curiae (there is no 26.1(a) corporation).

28. Maryland Nursery and Landscape Association, Amicus Curiae (there is

no 26.1(a) corporation).

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29. Mid-Atlantic Solutions, Inc., Amicus Curiae (there is no 26.1(a) corporation).

30. National Council of Agricultural Employers, Amicus Curiae (there is no


31. The Ocean Reef Club, Amicus Curiae (there is no 26.1(a) corporation).

32. The Sagamore, Amicus Curiae (parent: Green Island Associates; there is no 26.1(a) corporation).

33. Stein Erickson Lodge, Amicus Curiae (there is no 26.1(a) corporation).

34. Virginia Agricultural Employers Association, Inc., Amicus Curiae (there

is no 26.1(a) corporation).

Signed the 12th day of May 2010,

s/ Jennifer J. Rosenbaum__________________ Jennifer J. Rosenbaum Counsel for Appellees

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TABLE OF CONTENTS

Jurisdictional Statement………………………………………………………….1 Statement of the Issues……………………………………………………………1 Statement of the Case……………………………………………………………..1 Statement of Facts ………………………………………………………………..4 Summary of the Argument……………………………………………………….5 1. This Court Lacks Jurisdiction To Consider This Appeal…………………..5

2. The Guestworkers Have Stated a Cause of Action for Unpaid

Minimum Wages………………………………………………………………6

Standard of Review...……………………………………………………………..9 Argument…………………………………………………………………………10

I. THIS COURT LACKS JURISDICTION TO CONSIDER DECATUR HOTELS’ INTERLOCUTORY APPEAL………………………………………………………………..10

II. THE FLSA REQUIRES WORKERS TO BE REIMBURSED UP TO THE MINIMUM WAGE LEVEL FOR EMPLOYER REQUIRED EXPENSES THAT BRING THEIR WAGES BELOW THE FLSA MINIMUM………………...11

A. Employers May Not Reduce Wages Below The FLSA

Minimum By Taking Wage Deductions For Items That Primarily Benefit The Employer………………………………11

B. The FLSA Prohibits An Employer From Imposing De Facto Wage Deductions For Items That Primarily Benefit The Employer………………………………………………………..14

C. When Expenditures Are “Like Board and Lodging” and When

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They Are “Primarily for the Benefit or Convenience of the Employer.”………………………………………………………19

D. Obtaining a Job Is Not A “Benefit” For Purposes of § 203(m) Analysis………………………………………………………….23

III. THE GUESTWORKERS HAVE STATED A CLAIM FOR REIMBURSEMENT OF THE COSTS ASSOCIATED WITH DECATUR’S LONG DISTANCE RECRUITMENT PROGRAM..25

A. Transportation Expenses…………………………………………..27

1. The Guestworkers’ Transportation Expenses Were

Primarily For The Benefit of Decatur……………………..27

2. Decatur’s Hypothetical Examples Are Irrelevant………...30

3. Reimbursing Transportation Expenses Does Not Favor Foreign Workers…………………………………….32

B. Visa Expenses………………………………………………………….33

C. Recruitment Expenses………………………………………………..34

1. The Guestworkers Right To Be Reimbursed For Recruitment Fees Must Be Remanded For Trial……………36

IV. DECATUR HOTELS’ OTHER ARGUMENTS ARE WITHOUT

MERIT.……………………………………………………………..42

A. The INA Is Irrelevant To The Question Of Whether Transportation Costs Are Reimbursable…………………………42 1. The INA Does Not Repeal the FLSA…………………………..43

2. The INA Is Irrelevant To The Interpretation of Plaintiffs’

FLSA Rights…………………………………………………….44

3. Regulations Promulgated Under The INA Are Irrelevant To The Questions In this Case……………………………………..46

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a. H-2A Regulation…………………………………………46 b. H-1B Regulation…………………………………………47

c. 22 C.F.R. § 40.1(l)………………………………………..49

B. The Guestworkers’ Claims Do Not Involve Extraterritorial Application of the FLSA………………………………………..50

Conclusion………………………………………………………………………..52 Certificate of Service…………………………………………………………….53 Certificate of Compliance with Fed. R. App. P. 32(a)…………………………54

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Table of Authorities Cases Almendarez-Torres v. U.S., 523 U.S. 224 (1998)…………………………..9, 45-46 Anderson v. Mt. Clemons Pottery, 328 U.S. 680 (1946)………………………….21 Arriaga v. Florida Pacific Farms, 305 F.3d 1228 (11th Cir. 2002)………….passim Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009) ……………………………………...9, 10 Avila-Gonzalez v. Barajas, 2006 U.S. Dist. LEXIS 9272 (M. D. Fla. March 2, 2006)……………………………………………………………………………....36 Ayers v. 127 Restaurant Corp., 12 F. Supp. 2d 305 (S.D.N.Y. 1998)…….17, 18, 22 Bailey v. Pilots’ Assn., 406 F.Supp. 1302 (E.D. Pa. 1976)……………………….23 Bankers Life Ins. Co. of Neb. v. Scurlock Oil Co., 447 F.2d 997 (5th Cir. 1971)...42 Barcellona v. Tiffany English Pub, 597 F.2d 464 (5th Cir. 1979)………………...38 Barrentine v. Arkansas-Best Freight System, 450 U.S. 728 (1981)………11, 24, 25 Boim v. Quranic Literacy Institute, 291 F.3d 1000 (7th Cir. 2002)………………11 Bollinger v. Director Office of Worker Comp. Programs, __ F.3d ___ (5th Cir. April 22, 2010)……………………………………………………………………46 Boulos v. Morrison, 503 So. 2d 1 (La. 1987)……………………………………..40 Brennan v. Gross, 1974 WL 1279 (W.D.Tex. 1974)…………………………15, 33 Brennan v. Modern Chevrolet 363 F.Supp. 327(N.D. Tex. 1973) aff’d. 491 F.2d 1271 (5th Cir. 1974) ……………………………………………………………...23 Broadway v. All-Star Ins. Corp., 285 So. 2d 536 (La. 1973)……………………..41

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Brock v. Glassboro Service Assn. Inc., 1987 WL 25334 (D. N.J. 1987) aff’d. sub nom. McLaughlin v. Glassboro Service Assn., Inc., 841 F.2d 1119 (3d Cir.) cert den. 488 U.S. 821 (1988) …………………………………………………….passim Chevron USA v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984)…….………..13 Chao v. Decatur Hotels, C.A. No. 07-06104, U.S. Dist. Ct., E. D. La. (2008)…...26 Davis Bros., Inc. v. Donovan, 700 F.2d 1368 (11th Cir. 1983)……………….12, 18 De Leon-Granados v. Eller & Sons Trees, Inc., 581 F.Supp.2d 1295 (N.D. Ga. 2008)……………………………………………………………………7, 30, 47, 50 De Luna-Guerrero v. North Carolina Grower's Ass’n, 338 F. Supp. 2d 649 (E.D.N.C. 2004) ………………………………………………..7, 25, 30, 34, 38, 47 DOL v. Ceja, No. 2000-FLS-00004 (DOL ALJ 2001) …………………………...33 Donovan v. Captain Bill’s Inc., 749 F.2d 30 (4th Cir. 1984) affirming 1982 WL 2103 (E.D.N.C. 1982)…………………………………………………………16-17 Donovan v. Miller Properties 711 F.2d 49 (5th Cir. 1983)………………...…17, 18 Frank v. Delta Airlines, 314 F.3d 195 (5th Cir. 2002)……………………………..9 General American Oil Co. v. Meche, 442 So.2d 496 (La. App. 3d Cir. 1983).40, 41 Gleason v. Seaboard Air Line R. Co., 278 U.S. 349 (1929)………………………41 Gutierrez v. Ada, 528 U.S. 250 (2000)…………………………………………9, 46 Hoffman Plastic Compounds v. NLRB, 535 U.S. 138 (2002)……………………..46 Hoffman, Siegel, Seydel, Beinvenu & Centola, APLC v. Lee, 936 So.2d 853(La. App. 4th Cir. 2006)………………………………………………………………..41 In re Reyes, 814 F. 2d 168 (5th Cir. 1987)……………………………………….5-6 J.E.M. Ag Supply, Inc. v. Pioneer Hi-Bred Int’l. Inc., 534 U.S. 124 (2002)……...43

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La. Patients Oversight Board v. St. Paul’s Insurance, 411 F.3d 585 (5th Cir. 2005) …………………………………………………………………………………….10 Long Island Care at Home, Ltd. v. Coke, 551 U.S. 158 (2007)…………………..16 Malbrough v. Crown Equipment, 392 F.3d 135 (5th Cir. 2004)……………….4, 10 Marshall v. Al-Charles, Inc., 1986 WL 32743 (D. Conn. 1986) …………………17 Marshall v. Glassboro, 1979 WL 1949 (D.N.J. Oct. 19, 1979), aff’d. 639 F.2d 774 (3d Cir. 1980) cert. denied 450 U.S. 1040 (1981)………………………………..14 Marshall v. Krystal Co., 467 F. Supp 9 (E.D. Tenn. 1978)……………………….17 Marshall v. Root’s Restaurant, 667 F.2d 559 (6th Cir. 1982)………………..17, 18 Martinez-Bautista v. D&S Produce, 447 F.Supp.2d 954 (E.D. Ark. 2006) ……...30 McNeil v. Time Ins. Co., 205 F.3d 179 (5th Cir. 2000)…………………………….9 Montalvo v. Larchmont Farms, 2009 WL 4573279 (D.N.J. 2009) ………………17 Olvera-Morales v. Sterling Onions, Inc., 322 F. Supp. 2d 211 (N.D.N.Y. 2004) …………………………………………………………………………………50-51 Powell v. U.S. Cartridge Co., 339 U.S. 497 (1950)………………………………43 Recinos-Recinos v. Express Forestry, 2006 WL 197030 (E.D. La. 2006) ……….30 Reich v. Japan Enterprises, 91 F.3d 154 (9th Cir. 1994)…………………………16 Reich v. Priba Corp., 890 F. Supp. 586 (N.D. Tex. 1995)………………………..17 Reyes-Gaona v. North Carolina Growers Ass’n., Inc., 250 F.3d 861 (4th Cir. 2001) …………………………………………………………………………………….50 Rivera v. Brickman Group, 2008 WL 81570 (E.D. Pa. 2008) ………………passim Rosales v. Hispanic Employee Leasing Program, Inc., 2008 WL 363479 (W.D. Mich. 2008) ………………………………………………………………………17

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Shultz v. Hinojosa, 432 F.2d 259 (5th Cir. 1970) ……………………….....6, 12, 13 Soler v. G & U, Inc., 833 F.2d 1104 (2d Cir. 1987)…………………………..12, 21 Sure-Tan, Inc. v. NLRB, 467 U.S. 883 (1984) ……………………………………46 Tenn. Valley Auth. v. Hill, 437 U.S. 153 (1978) ………………………………….43 Torreblanca v. Naas Foods, 1980 WL 2100 (N.D. Ind. 1980)……………….30, 32 Traynor v. Turnage, 485 U.S. 535 (1988)………………………………………...45 True v. Robles, 571 F.3d 412 (5th Cir. 2009)……………………………………4, 9 Yu G. Ke v. Saigon Grill, 595 F. Supp. 2d 240 (S.D.N.Y 2008)…………………17 Vega v. Gaspar, 36 F.3d 417 (5th Cir. 1994) …………………………………….21 Williams v. Jacksonville Terminal Co., 315 U.S. 386 (1942)…………………….11 Wood v. U.S., 41 U.S. 342 (1842) ………………………………………………..43 Statutes 8 U.S.C. § 1101(a)(15) (H)(i)(b)………………………………………………….47 8 U.S.C. § 1101(a)(15) (H)(ii)(b)………………………………………………5, 27 8 U.S.C. § 1184…………………………………………………….5, 35, 42, 45, 48 28 U.S.C. § 1331…………………………………………………………………...1

28 U.S.C. § 1292(b)……………………………………………..1,3, 4, 6, 10, 11, 37 29 U.S.C. § 201…………………………………………………………………….1 29 U.S.C. § 202(a)…………………………………………………….11, 25, 26, 27 29 U.S.C. 203(m) …………………………………………………………….passim

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29 U.S.C. § 213(f)……………………………………………………………9, 51 Regulations 8 C.F.R. § 214(a)(3)(ii)……………………………………………………………28 8 C.F.R. § 214.2(h)(4)(ii)……………………………………………………...47-48 8 C.F.R. § 214.2(h)(6)(ii)(B)………………………………………………….27, 28 8 C.F.R. § 214.2(h)(16)…………………………………………………………...49 29 C.F.R. § 531.3…………………………………………...5, 13, 14, 19, 21, 24, 35 29 C.F.R. § 531.29………………………………………………………………...12 29 C.F.R. § 531.31………………………………………………………………...20 29 C.F.R. § 531.32…………………………………………….11, 12, 15, 16, 19, 20 29 C.F.R. § 531.35……………………………………………………...6, 15, 20, 21 20 C.F.R. § 531.36(b)……………………………………………………………..18 20 C.F.R. § 531.37………………………………………………………………...18 20 C.F.R. § 655.10(a)(3)………………………………………………………….26 20 C.F.R. § 655.122(h)(1) (2010)…………………………………………………47 20 C.F.R. § 655.731(c)(9)(iii)(C)……………………………………………..47, 48 22 C.F.R. § 40.1(l)(1)………………………………………………………….49,50 29 C.F.R. § 776.4………………………………………………………………….11

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Rules Fed. R. Civ. P. 12(b)(6)………………………………………………………1, 9-10 Fed. R. Civ. P. 56(c)………………………………………………………………10 Other Authorities La. C.C. Art. 2995………………………………………………………………...41 DOL Wage Hour Field Op. Handbook, 30c16 (http://www.dol.gov/whd/FOH/index.htm).................................................18, 19, 22 29 Fed. Reg. 19101 (Dec. 30, 1964)………………………………………………47 32 Fed. Reg. 222 (January 10, 1967)……………………………………………...13 32 Fed. Reg. 13575 (Sept. 8, 1967)……………………………………………….13 65 Fed. Reg. 80110, 80219 (Dec. 20, 2000)………………………………………48 65 Fed. Reg. 54413 (Sept. 8, 2000)……………………………………………….50 DOL Interpretive Bulletin No. 3 at 255-256 (Oct. 1940)…………………………12 DOL General Administration Letter (GAL) 1-95 “Procedures for H-2B Temporary Labor Certification in Nonagricultural Occupations”, 60 Fed. Reg. 7216, 7219 (Feb. 7, 1995)……………………………………………………………………...28 DOL Opinion Letter May 11, 1960……………………………………………….29 DOL Opinion Letter 937, Feb. 4, 1969…………………………………………...29 DOL Opinion Letter 1139 (Dec. 10, 1970)……………………………………….29 DOL Opinion Letter 1721 (June 27, 1990)……………………………………….29 Labor Certification in Nonagricultural Occupations”, 60 Fed. Reg. 7216, 7219 (Feb. 7, 1995)……………………………………………………………………...28

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Jurisdictional Statement

The district court had subject matter jurisdiction over the Guestworkers’

claims under the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. (“FLSA”),

pursuant to 28 U.S.C. § 1331.1

Statement of the Issues

Decatur has invoked this Court’s jurisdiction

pursuant to 28 U.S.C. § 1292(b). The Guestworkers dispute that the questions

raised by Decatur meet the requirements for Section 1292(b) jurisdiction.

In the event that this Court finds it has § 1292(b) jurisdiction, the

Guestworkers believe that the only controlling legal issue before the Court is the

one presented by Decatur’s Fed. R. Civ. P. 12(b)(6) motion to dismiss: Whether

the Guestworkers’ allegation that Decatur required them to pay visa,

transportation, and recruitment expenses as a condition of employment states a

cause of action under the FLSA for reimbursement of those expenses up to the

minimum wage level.

Statement of the Case

This action was filed by three foreign workers who were recruited by

Decatur in their home countries of Peru, Bolivia, and the Dominican Republic to

1 Appellants Decatur Hotels and F. Patrick Quinn, III are collectively referred to as “Decatur.” Plaintiffs Daniel Castellanos-Contreras, Rodolfo Valdez-Baez, and O. Ricardo Deheza-Ortega, as well as the 97 other similarly situated H-2B guestworkers formerly employed by Decatur who have filed notices of consent to participate in this litigation are collectively referred to as “Guestworkers.”

2

work in Decatur’s New Orleans hotel operations using H-2B temporary work

visas.2

2 The original complaint was filed on August 17, 2006, (Doc 1); an amended complaint was filed on August 25, 2007. (Doc. 16).

These plaintiffs sought to represent similarly situated H-2B guestworkers

imported by Decatur, ninety-seven of whom have filed notices of consent to

participate in the suit (collectively “the Guestworkers”). The Guestworkers allege

that Decatur violated the FLSA by shifting the costs of its foreign recruitment

program – including visa, transportation and recruitment costs – to the

Guestworkers to pay. The Guestworkers allege that these expenses, which were

primarily for the benefit and convenience of Decatur, operated as de facto

deductions from their wages and caused their wages to fall below the FLSA

minimum. The Guestworkers seek sufficient reimbursement of those costs to bring

their earnings up to the minimum wage level. See Arriaga v. Florida Pacific

Farms, 305 F.3d 1228 (11th Cir. 2002) (FLSA requires reimbursement of visa and

transportation costs incurred by H-2A guestworkers to the extent those costs

reduce a worker’s first week’s wages below the FLSA minimum); Rivera v.

Brickman Group, 2008 WL 81570 (E.D. Pa. 2008) (same for H-2B guestworkers);

Brock v. Glassboro Service Assn. Inc., 1987 WL 25334 (D. N.J. 1987) aff’d. sub

nom. McLaughlin v. Glassboro Service Assn., Inc., 841 F.2d 1119 (3d Cir.) cert

den. 488 U.S. 821 (1988) (same for transportation costs incurred by Puerto Rican

migrant workers).

3

After only three depositions and limited written discovery, Decatur filed a

“motion to dismiss and/or for summary judgment,” arguing that the Guestworkers

were not entitled to the protections of the FLSA, and that even if they were, the

FLSA did not require the visa, point-of-hire transportation, and recruitment

expenses incurred by the Guestworkers to be treated as de facto wage deductions.

(Doc. 51). In support of its motion, Decatur filed a statement of allegedly

undisputed facts. (Doc. 51-3). The Guestworkers submitted evidence to contest

Decatur’s facts (Docs. 67-1 & 81) and filed a cross motion for partial summary

judgment. (Doc. 71).

By Order dated May 15, 2007, the district court denied Decatur’s motion to

dismiss and/or for summary judgment and granted the Guestworkers’ motion only

insofar as it sought a ruling that H-2B guestworkers were covered by the FLSA.

(Doc. 94 at 12). The district court declined to decide whether the FLSA required

the visa, transportation, and recruitment expenses paid by the Guestworkers to be

treated as wage deductions because it found the facts necessary for determining

that question to be disputed. Id. at 2-3, 11.

Decatur moved for reconsideration of the court’s order, or in the alternative,

for an order certifying an interlocutory appeal pursuant to 28 U.S.C. § 1292(b).

(Doc. 95). The district court refused reconsideration, but certified for interlocutory

review the only controlling issue of law that it had decided-- whether H-2B

4

guestworkers are covered by the FLSA. (Doc. 108 at 3). In issuing its certification,

the district court reiterated that its refusal to determine whether the FLSA had been

violated “at this stage of litigation,” in advance of full discovery, was neither

manifestly erroneous nor unjust. Id. This Court granted Decatur leave to file an

interlocutory appeal pursuant to 28 U.S.C. § 1292(b), on October 5, 2007.

Statement of Facts The Guestworkers take issue with Decatur’s Statement of Facts because it is

based on summary judgment evidence that the district court found to be disputed.

(Doc. 94 at 2, 3, 11). The correctness of that ruling is not before this Court

because a district court’s finding that genuine issues of material fact preclude

summary judgment “is not a question of law within the meaning of Sec. 1292(b).”

Malbrough v. Crown Equipment, 392 F.3d 135, 136 (5th Cir. 2004).

In reviewing Decatur’s motion to dismiss, this Court must look to the facts

alleged in Plaintiffs’ first amended complaint and view them in the light most

favorable to the Plaintiffs. True v. Robles, 571 F.3d 412, 417 (5th Cir. 2009). That

complaint alleges as follows:

Following Hurricane Katrina, Decatur found itself faced with a labor

shortage and decided to seek foreign workers to fill its needs. (Doc. 16 ¶¶ 1.2, 5.2).

Decatur filed multiple applications with the U.S. government for temporary H-2B

5

work visas for housekeeping, maintenance, and desk clerks.3 Id. Upon approval of

these applications, Decatur recruited foreign workers in Peru, Bolivia, and the

Dominican Republic. Id. at ¶ 1.1. As a pre-condition of employment with

Decatur, the Guestworkers were required to pay between $3500 and $5000 for

visa, travel, and recruitment expenses. Id. at ¶¶ 1.4, 5.7. These sums were

expended for the primary benefit of Decatur, but were not reimbursed to the

Guestworkers. Id. at ¶ 5.6. As a result, the workers earned substantially less than

the minimum wage of $5.15/hour in their first week of work and found themselves

in virtual debt peonage, since they could not pay off their debt while working for

Decatur nor lawfully work for any other employer.4

Summary of the Argument

Id. at ¶ 1.4.

1. This Court Lacks Jurisdiction To Consider This Appeal.

This Court lacks jurisdiction to consider the question certified by the district

court -- whether H-2B guestworkers are generally entitled to the protections of the

FLSA-- because this Court has already decided the question. See In re Reyes, 814

3 Non-agricultural employers facing a temporary labor shortage may petition the Department of Homeland Security for permission to import foreign workers. 8 U.S.C. § 1184(c). The visas for such workers are referred to as H-2B visas as they are defined in 8 U.S.C. § 1101(a)(15) (H)(ii)(b). 4 The visa petitions filed by Decatur, which were attached to the summary judgment record, offer ten month jobs at the rate of $6.02 for housekeepers, $6.09 for hotel clerks, $7.79/hr. for maintenance workers. Doc. 71-6 (Ex. 4, 5, 6). At those rates it would take three to five months of wages working 40 hours a week to pay off the visa, transportation and recruitment expenses at issue.

6

F. 2d 168, 170 (5th Cir. 1987) (“It is well established that the protections of the

Fair Labor Standards Act are applicable to citizens and aliens alike and whether the

alien is documented or undocumented is irrelevant.”). This Court also lacks

jurisdiction to consider other issues raised by Decatur because they are mixed

questions of law and fact that were not decided by the district court. See 28 U.S.C.

§ 1292(b).

2. The Guestworkers Have Stated a Cause of Action for Unpaid Minimum Wages.

The district court properly denied Decatur’s motion to dismiss. The FLSA

prohibits an employer from reducing a worker’s wages below the FLSA minimum

by charging a worker for items that are primarily for the benefit and convenience

of the employer. See Shultz v. Hinojosa, 432 F.2d 259, 267 (5th Cir. 1970)

(requiring employer to reimburse deductions for work tools up to the minimum

wage). An employer may not evade this prohibition against charging for items that

primarily benefit the employer by requiring workers to purchase such items on

their own, either in advance of, or during the employment. 29 C.F.R. § 531.35

(prohibiting payments to others for the benefit of the employer to the extent such

payments bring a workers wage below the FLSA minimum). There is no legal

difference between deducting a cost directly from the worker’s wages and shifting

a cost . . . for the employee to bear”. Arriaga, 305 F.3d at 1236.

Every court that has considered the issue, including the Eleventh and Third

7

Circuits, has concluded that the expenses that necessarily arise from an employer’s

decision to fill temporary jobs through a targeted long-distance recruitment

program are primarily for the benefit and convenience of the employer and that

when an employer requires employees to bear such expenses in the first instance it

must reimburse those expenses to the extent they reduce workers’ wages below the

FLSA minimum. See, e.g., Arriaga, 305 F.3d at 1241-1244 (reimbursement of

transportation and visa expenses incurred by temporary H-2A visa workers);

Glassboro Service Assn. Inc., 1987 WL 25334 (reimbursement of transportation

expenses to New Jersey incurred by Puerto Rican farm workers); Rivera, 2008 WL

81570 (reimbursement of transportation, visa, and recruitment expenses incurred

by temporary H-2B visa workers); De Leon-Granados v. Eller & Sons Trees, Inc.,

581 F.Supp.2d 1295, 1307-1313 (N.D. Ga. 2008) (transportation and visa expenses

of H-2B forestry workers); De Luna-Guerrero v. North Carolina Grower's Ass’n,

338 F. Supp. 2d 649 (E.D.N.C. 2004) (transportation and visa expenses incurred by

H-2A temporary agricultural workers). It was irrelevant that the workers in these

cases “voluntarily” agreed to pay the recruitment program expenses at issue just as

it was irrelevant that they received the “benefit” of a job by paying for the

expenses. The purpose of the FLSA was to set a minimum wage floor that could

not be negotiated away as a result of unequal bargaining power between workers

and employers. Expenses that primarily benefit the employer may not legally cut

8

into that minimum wage protection even if workers, desperate for a job, agree to

pay such expenses.

Decatur’s argument that the Guestworkers’ reading of the FLSA will open

up a flood of litigation is without merit. In the fifty years since DOL first held that

the expenses incident to an employer’s long-distance recruitment effort primarily

benefit the employer and must be reimbursed up to the minimum wage level, the

right to reimbursement of such expenses has only been applied in relatively rare

situations where an employer actively recruits workers to travel long distances for

temporary jobs. This case does not present the question whether expenses arising

from permanent relocation for a job, recruitment pursuant to non-targeted

advertising, or other circumstances hypothesized by Decatur are reimbursable.

Contrary to Decatur’s argument, there is no conflict between the

Guestworkers’ FLSA claim and the Immigration and Nationality Act (“INA”). An

employer can easily comply with the requirements of both Acts. See Arriaga, 305

F.3d at 1235-35; Rivera, 2008 WL 81570 at *2-*6. The INA is also irrelevant to

the question of whether the expenses at issue here are primarily for the benefit of

the employer for purposes of the FLSA. The INA serves a different legislative

purpose from the FLSA; the INA does not seek to clarify the FLSA; and nothing in

the INA reflects a direct focus by Congress on the meaning of the FLSA provision

9

at issue. Accordingly, the INA has no relevance. Gutierrez v. Ada, 528 U.S. 250,

257-258 (2000); Almendarez-Torres v. U.S., 523 U.S. 224, 237 (1998).

Courts have consistently rejected Decatur’s argument that the Portal-to-

Portal Act definition of compensable work time should be used to determine when

an employment-related expense operates as a minimum wage deduction. See

Arriaga, 305 F.3d at 1240; Rivera, 2008 WL 81570 at *6. The Portal-to-Portal Act

deals with compensable work time and has no application to the issues presented

here. Decatur’s argument that the Guestworkers’ claims would impermissibly

require extraterritorial application of the FLSA should also be rejected because the

Guestworkers’ labor, and Decatur’s failure to pay the minimum wage for that

labor, occurred in the United States. 29 U.S.C. § 213(f).

Standard of Review

Controlling issues of law in a Sec. 1292(b) appeal are reviewed de novo.

McNeil v. Time Ins. Co., 205 F.3d 179, 189 (5th Cir. 2000). A denial of a motion

to dismiss for failure to state a claim is also reviewed de novo, “accepting all well-

pleaded facts as true and viewing those facts in the light most favorable to the

plaintiff.” True v. Robles, 571 F.3d 412, 417 (5th Cir. 2009); Frank v. Delta

Airlines, 314 F.3d 195, 197 (5th Cir. 2002). Although this case was decided prior

to Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009), to survive a Fed. R. Civ. P.

10

12(b)(6) motion to dismiss, a plaintiff must now plead enough facts “to state a

claim to relief that is plausible on its face.” Id. at 1949.

Argument

I. THIS COURT LACKS JURISDICTION TO CONSIDER DECATUR HOTELS’ INTERLOCUTORY APPEAL.

For the reasons set forth in their original appellate brief, the Guestworkers

believe that this Court lacks jurisdiction to review the certified order under §

1292(b). If this Court has § 1292(b) jurisdiction, it is limited to the question of

whether the district court properly denied Decatur’s motion to dismiss – i.e.

whether the Guestworkers have stated a cause of action under the FLSA. The

district court’s denial of Decatur’s summary judgment motion is not before this

Court because the question of whether the Guestworkers “presented sufficient

evidence to show a genuine issue . . . of material fact, and thus avoid summary

judgment under Fed. R. Civ. P. 56(c) is not a question of law within the meaning

of Section 1292(b).” Marlbrough v. Crown Equipment, 392 F.3d 135, 136 (5th

Cir. 2004) (exercising § 1292(b) jurisdiction to determine that the Louisiana

products liability statute did not require expert testimony but declining to decide

whether the plaintiff had come forward with sufficient non-expert testimony to

avoid summary judgment); La. Patients Oversight Board v. St. Paul’s Insurance,

411 F.3d 585, 588 (5th Cir. 2005) (exercising § 1292(b) jurisdiction to determine

whether plaintiff had a cause of action under Louisiana medical malpractice

11

statute, but declining to decide whether plaintiffs had submitted sufficient evidence

to withstand summary judgment on other claims). See also Boim v. Quranic

Literacy Institute, 291 F.3d 1000 (7th Cir. 2002) (exercising § 1292(b) review over

order denying motion to dismiss in order to determine elements of terrorism statute

claim, but declining to decide whether plaintiffs facts satisfied those elements).

II. THE FLSA REQUIRES WORKERS TO BE REIMBURSED UP TO THE MINIMUM WAGE LEVEL FOR EMPLOYER REQUIRED EXPENSES THAT BRING THEIR WAGES BELOW THE FLSA MINIMUM.

A. Employers May Not Reduce Wages Below The FLSA

Minimum By Taking Wage Deductions For Items That Primarily Benefit The Employer.

Congress' declared purpose in enacting the Fair Labor Standards Act was to

eliminate “labor conditions detrimental to the maintenance of the minimum

standard of living necessary for health, efficiency, and general well-being of

workers.” 29 U.S.C. § 202(a); Barrentine v. Arkansas-Best Freight System, 450

U.S. 728, 739-740 (1981). To achieve this goal, Congress established a minimum

wage which could not be which could not be waived, id. at 740, and which

generally must be paid in cash, “free and clear” of deductions. Williams v.

Jacksonville Terminal Co., 315 U.S. 386, 404 (1942) (“pay wages ordinarily

means for the employer to hand over money or orders convertible to money at

face”). See also, 29 C.F.R. §§ 531.35, 776.4.

The only exception to the “free and clear” requirement appears in Section

12

3(m) of the Act which defines wages to include the reasonable cost of providing

“board, lodging, or other facilities” if such items are customarily furnished by the

employer to his employees. 29 U.S.C. § 203(m). Pursuant to § 203(m), an

employer may claim the cost of providing meals, housing or similar facilities as a

credit towards its minimum wage obligation, see, e.g., Davis Bros., Inc. v.

Donovan, 700 F.2d 1368, 1371 (11th Cir. 1983) (wage credit for providing meals),

or it may deduct the cost of providing such facilities from wages that otherwise

meet the FLSA standard, Soler v. G & U, Inc., 833 F.2d 1104, 1108- 1109 (2d Cir.

1987) (wage deduction taken for cost of providing housing). See also 29 C.F.R.

§§ 531.29, 531.32(a).5

An employer’s right under § 203(m) to deduct for the reasonable cost of

providing “board, lodging, and other facilities” is strictly limited, however. As

this Court has recognized, “the words ‘other facilities’ are to be considered as

being in pari materia with the preceding words ‘board and lodging.’” Hinojosa,

432 F.2d at 267. Thus, only facilities that are “something like board or lodging”

are permitted to reduce a worker’s cash wages below the statutory minimum. 29

C.F.R. § 531.32(a). Moreover, “the cost of furnishing facilities which are

primarily for the benefit or convenience of the employer” will not be recognized as

5 See also DOL Interpretive Bulletin No. 3 at 255-256 (Oct. 1940) (Decatur Amici En Banc Brief Ex. 4 at 27-28) (explaining that §203(m) applies both to wage payments and wage deductions).

13

“reasonable” and cannot reduce a worker’s wage below the legal minimum, 29

C.F.R. § 531.3. For example, an employer may not deduct the cost of providing

necessary tools or mandatory uniforms if such deductions bring a worker’s wages

below the FLSA minimum because such items are considered to be “primarily for

the benefit or convenience of the employer.” Id. This Court has previously found

29 C.F.R. § 531.3 to be a valid regulation, Hinojosa, 432 F.2d at 267, and it is

entitled to controlling Chevron deference. 6

It should be emphasized, however, that the limits on deductions that

primarily benefit the employer apply only to the extent that such deductions bring

a worker’s wages below the FLSA minimum. The FLSA does not prohibit an

employer from deducting for expenses that primarily benefit the employer as long

the deductions are spread out over time and never cause a worker’s weekly wage to

all below the FLSA minimum. Decatur could have done that in this case, but did

not.

7

6 Section 531.3, along with most of the other regulations appearing in Part 531, was first published on October 24, 1938, prior to the enactment of the Administrative Procedure Act in 1946. See Decatur Amici En Banc Brief Ex. 5 at 33. The Part 531 regulations were re-published for pubic comment in 1967, 32 Fed. Reg. 222 (January 10, 1967), after which the current regulations were adopted. 32 Fed. Reg. 13575 (Sept. 8, 1967). Given this history, § 531.3 is entitled to controlling deference. Chevron USA v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 843-844 (1984) (agency interpretation of an ambiguous statute is entitled to controlling effect if it is reasonable, consistent with the statutory mandate, and issued pursuant to notice and comment procedures).

7 Decatur could have paid the travel, visa, and recruitment costs and then deducted those expenses from the Guestworkers over time as long as the deductions did not drop a workers’ wages below the minimum. This approach advances the fundamental purposes of the FLSA by

14

B. The FLSA Prohibits An Employer From Imposing De Facto Wage Deductions For Items That Primarily Benefit The Employer.

Decatur and its amici argue that the § 531.3 prohibition on deductions for

facilities that primarily benefit the employer applies only when the employer itself

deducts for a facility, and that it has no application when an employer requires its

employees to purchase facilities on their own. But allowing an employer to shift

business expenses to its employees to bear in the first instance would result in the

wholesale evasion of the minimum wage standard established by the Act. As the

Arriaga court noted, “there is no legal difference between deducting a cost directly

from the worker’s wages and shifting a cost, which they could not deduct, for the

employee to bear.” 8

ensuring that workers earn the minimum wage every week free and clear and by avoiding the indentured nature of the relationship that arises when a worker arrives laden with debt.

305 F.3d at 1236. Accordingly, DOL has interpreted §

203(m) to prohibit not only direct deductions made by an employer, but “de facto”

deductions resulting from an employer’s shifting business expenses to its workers

to pay in the first instance:

8 The two Glassboro Service Assn. cases illustrate this point. In the first action, DOL obtained an injunction against Glassboro to prohibit it from taking wage deductions for the cost of transporting workers from Puerto Rico to New Jersey. Marshall v. Glassboro, 1979 WL 1949 (D.N.J. Oct. 19, 1979), aff’d. 639 F.2d 774 (3d Cir. 1980) cert. denied 450 U.S. 1040 (1981). In response, Glassboro required workers to pay for their own transportation and DOL brought a contempt action. Glassboro, 1987 WL 25334 at * (D.N.J. 1987) aff’d. 841 F.2d 1119 (3d Cir.) cert. denied 488 U.S. 821 (1988). Glassboro argued it should not be held in contempt because making workers pay in the first instance did not involve deducting anything from the worker’s wages. The court rejected that argument finding that it “substitutes artificial distinctions for a practical view of the economic realities.” Id. at *6.

15

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 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 costs of such tools purchased by the employee cuts into the minimum or overtime wages required to be paid him under the Act. See also in this connection, § 531.32(c).

29 C.F.R. § 531.35 (emphasis added).9

9 An employer may require an employee to incur an expense explicitly, or indirectly by structuring its business in a way that payment of the expense is unavoidable, see, e.g., Rivera, 2008 WL 81570 at *13-*14 (recruitment expenses), or simply by engaging in a business that requires payment of the expense. See, e.g., Brennan v. Gross, 1974 WL 1279 at *1 (W.D.Tex. 1974) (required health certificates for restaurant workers).

The cross-reference at the end of the above-

quoted regulation is to § 531.32(c) which lists examples of items primarily for the

benefit of the employer that may not be directly deducted from wages. Including

that cross-reference in the anti-kickback regulation demonstrates that DOL views

direct deductions and de facto deductions as functionally equivalent and subject to

the same “primarily for the benefit or convenience of the employer” standard.

Tellingly, Decatur omits this cross-reference to § 531.32(c) when it quotes the anti-

kickback regulation, see Decatur Supp. En Banc Brief at 4 (as did the Panel

Opinion, Slip Op. at 8), which leads it to the erroneous conclusion that the

standards for direct deductions and de facto deductions are unrelated.

16

Both § 531.32 and § 531.35 represent reasonable interpretations of § 203(m)

issued pursuant to notice and comment rulemaking, see footnote 6, supra, and are,

as a result, entitled to controlling deference.10

Even Decatur and its amici recognize that limiting the expenses an employee

may be required to pay as a condition of employment is a necessary corollary of

Sec. 203(m),

Long Island Care at Home, Ltd. v.

Coke, 551 U.S. 158, 173-174 (2007) (holding that DOL interpretive regulations are

entitled to controlling deference); Rivera, 2008 WL 81570 at *8 fn 15 (noting that

the “primarily for the benefit of the employer” test in § 531.32(c) is entitled to

controlling deference).

11

10 Both § 531.32 and § 531.35 were amended as a result of the public comment period in 1967. See 32 Fed. Reg. 13575 (Sept. 8, 1967).

as have the 3rd, 4th, 6th, 9th, and11th Circuits. See, e.g., Arriaga,

305 F.3d at 1236 (requiring reimbursement of transportation and visa expenses

paid by employees); Reich v. Japan Enterprises, 91 F.3d 154 (9th Cir. 1994)

(reimbursement of costume cost paid by employees); Glassboro Service Assn. Inc.,

841 F.2d 1119 (3d Cir. 1988) affirming 1987 WL 25334 (reimbursement of

transportation costs paid by employees); Donovan v. Captain Bill’s Inc., 749 F.2d

11 Decatur admits that “[t]he plain meaning of 29 U.S.C. § 203(m) is that wages can be paid in “other facilities” and it follows logically that it is inconsistent with the purpose of the FLSA to cause a worker to incur expenses for the benefit of his employer, but that is not what happened in this case.” Decatur Supp. En Banc Brief at 21. This last comment indicates that Decatur’s only real argument is a factual one whether the expenses at issue were actually required by Decatur. See also Amici Brief in Support of Decatur at 9.

17

30 (4th Cir. 1984) affirming 1982 WL 2103 (E.D.N.C. 1982) (uniform costs paid

by employees); Marshall v. Root’s Restaurant, 667 F.2d 559, 560 (6th Cir. 1982)

(uniform costs paid by employees).12

Despite the above, the panel opinion cited Donovan v. Miller Properties for

the proposition that Section 203(m) does not regulate expenses paid by employees.

Opinion, July 21, 2009 at 12 (“…[O]ur Donovan precedent from 1983 informs us

that, under Fifth Circuit law, § 203(m) imposes no obligation on employers to bear

employee-incurred expenses.”). However, Miller Properties never addressed that

question. Miller Properties is a four-paragraph decision holding merely that §

203(m) allows an employer to claim minimum wage credit for providing meals,

even when the employee is not given the option of receiving cash wages instead.

711 F.2d 49, 50 (5th Cir. 1983). The issue of employee-paid expenses never came

12 Many district courts have also found that the FLSA prohibits de facto deductions resulting from items purchased by employees. See, e.g., Reich v. Priba Corp., 890 F. Supp. 586, 596-597 (N.D. Tex. 1995) (uniforms purchased by topless dancers); Montalvo v. Larchmont Farms, 2009 WL 4573279 (D.N.J. 2009) (transportation from Puerto Rico to New Jersey paid by farmworkers); Rivera v. Brickman, 2008 WL 81570 at *7 (as a corollary of 203(m), employers “may not pass along to employees expenses for . . . goods or services [which primarily benefit the employer]”); Yu G. Ke v. Saigon Grill, 595 F. Supp. 2d 240, 257-258 (S.D.N.Y 2008) (bicycles purchased by delivery employees); Rosales v. Hispanic Employee Leasing Program, Inc., 2008 WL 363479 (W.D. Mich. 2008) (transportation, visas and administrative costs paid by H-2B workers); Ayers v. 127 Restaurant Corp., 12 F. Supp. 2d 305, 310 (S.D.N.Y. 1998) (uniforms purchased by waiters) Marshall v. Al-Charles, Inc., 1986 WL 32743 (D. Conn. 1986) (same); Marshall v. Krystal Co., 467 F. Supp 9, 13 (E.D. Tenn. 1978) (same). The Guestworkers have found no cases that support Decatur’s argument that 203(m) only addresses wage deductions made directly by an employer and is not implicated by de facto wage deductions arising from expenses paid for by employees. Were this Court to accept Decatur’s argument it would place this Court in conflict with all of the above cited decisions.

18

up. Davis Bros v. Donovan, 700 F.2d 1368 (11th Cir. 1983), the principal case

relied upon by Miller Properties, also concerned direct deductions for employer

provided meals. The question of whether an employer could require its employees

to purchase items that primarily benefited the employer was not before the court.

It is clear, however, that the Eleventh Circuit does not view Davis Brothers as

limiting the application of § 203(m) to direct deductions made by an employer as is

evident from its subsequent opinion in Arriaga where it held that there was no

legal distinction between expenses deducted by the employer and expenses paid

for by the employee in the first instance. For all of these reasons, Miller

Properties is irrelevant to this case.

Because the FLSA operates on a workweek basis, unlawful deductions must

be reimbursed up to the minimum wage level in the workweek in which the

deduction is made. 20 C.F.R. §§ 531.36(b) & 531.37; DOL Wage Hour Field Op.

Handbook, 30c16 (http://www.dol.gov/whd/FOH/index.htm). When an employee

is required to make expenditures that are primarily for the benefit and convenience

of the employer prior to commencing work, reimbursement up to the minimum

wage level must be made in the first work week. Arriaga, 305 F.3d at 1237;

Root’s Restaurant,667 F.2d at 560; Ayres v. 127 Restaurant Corp., 12 F.Supp.2d

305, 310 (S.D.N.Y. 2998); Glassboro Service Assn. Inc., 1987 WL 25334.

19

C. When Expenditures Are “Like Board and Lodging” and When They Are “Primarily for the Benefit or Convenience of the Employer.”

DOL’s regulations provide considerable guidance in determining when

expenses are “like board and lodging” and when they are “primarily for the benefit

or convenience of the employer.” Examples of expenditures “like board and

lodging” include clothing, household goods and electricity, water and gas for

personal use, routine daily commuting from home to work, and child care

expenses. See 29 § C.F.R. 531.32(a); DOL Wage and Hour Field Op. Handbook, §

30c03(a).13

Examples of facilities that are “primarily for the benefit or convenience of

the employer” include “(i) tools of the trade and other materials and services

incidental to carrying on the employer’s business; (ii) the cost of any construction

by and for the employer; (iii) the cost of uniforms and of their laundering, where

the nature of the business requires the employee to wear a uniform,” 29 C.F.R. §

531.3(d)(2), as well as,

Safety caps, explosives and miners’ lamps . . . electric power (used for commercial production in the interest of the employer); company police and guard protection; taxes and insurance on the employer’s buildings which are not used for lodgings furnished to the employee; ‘dues’ to chambers of commerce and other organizations used, for example, to repay subsidies given to the employer to locate his factory in a particular community; transportation charges where such transportation is

13 Available at: http://www.dol.gov/esa/whd/FOH/FOH_Ch30.pdf

20

incident and necessary to the employment (as in the case of maintenance-of-way employees of a railroad); . . . medical services and hospitalization which an employer is bound to furnish under workmen’s compensation acts, or similar Federal, State, or local law.

29 C.F.R. § 531.32(c).

In light of these examples, Decatur’s argument that expenditures are

“primarily for the benefit and convenience of the employer” only when they relate

to a worker’s principal work activity is untenable. As the court in Rivera noted,

the examples in § 531.32(c), including police protection, taxes, and insurance,

“show it is possible for a cost to be ‘primarily for the benefit of the employer’ and

yet not bear a close nexus with an employee’s principal job activity.” 2008 WL

81570 at *8. That conclusion is further supported by Section 531.3(d) which

broadly prohibits deductions for “materials and services incidental to carrying on

the employer’s business.” 29 C.F.R. § 531.3(d). Nothing in that regulation

suggests that the service need be related to a worker’s primary work activity. The

anti-kickback regulation also bars payments “for the benefit of the employer”

without limiting how the employer is benefited by the payment. 29 C.F.R. §

531.35. Indeed, an expense can be completely unrelated to an employer’s business

and still be primarily for the benefit of the employer. For example, an employer

who requires prospective employees to contribute to his or her favorite charity as a

condition of being hired would surely be violating § 531.35 if the contribution

21

brought workers’ wages below the minimum even though a contribution to charity

has nothing at all to do with day-to-day business operations or the worker’s

primary work activity. 14

Taken as a whole, the examples in § 531.3 and § 531.35(a) and (c) establish

that the dividing line between employer imposed expenses that are “like board and

lodging” that may cut into minimum wage, and those that are “primarily for the

benefit or convenience of the employer” that may not, is whether the expense is a

normal living expense that an employee would likely incur even if it were not

imposed as a condition of employment. See Arriaga, 305 F.3d at 1243 (“the line is

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

would arise as a normal living expense”); Rivera, 2008 WL 81570 at *9 (same).

See also Soler., 833 F.2d. at 1108 (upholding deductions for housing because “[a]n

employee has to reside somewhere, and therefore rental payments for the employee

are usual and customary items of his or her living expenses.”).

This distinction-- between employer imposed costs that a worker would

likely incur in the course of daily life, and employer imposed costs that a worker

14 Decatur’s “principal work activity” theory comes from the Portal-to-Portal Act. However, that Act concerns the definition of compensable work time for which wages must be paid. It was adopted to correct what Congress viewed as an overly expansive definition of work time adopted by the Court in Anderson v. Mt. Clemons Pottery, 328 U.S. 680, 690-91 (1946) (time walking from time-clock to work station held compensable). The Portal-to-Portal Act, and cases interpreting it such as Vega v. Gaspar, 36 F.3d 417 (5th Cir. 1994), have nothing to say about permissible deductions from wages (which are governed by the Part 531 regulations) as courts have repeatedly held. See Arriaga, 305 F.3d at 1241 (rejecting Portal-to-Portal Act as basis for analyzing when expenses are reimbursable); Rivera, 2008 WL 81750 at *6 (same).

22

would not incur but for the job -- is clearly illustrated by DOL’s guidelines with

respect to uniforms. “If an employer merely prescribes a general type of ordinary

street clothing to be worn while working and permits variations in details of dress,

the garments chosen would not be considered uniforms”-- i.e., the employer need

not reimburse the cost even if the expense drops workers’ wages below the FLSA

minimum. DOL Wage Hour Field Op. Handbook § 30c12(f), quoted in Ayers, 12

F. Supp. 2d at 310. On the other hand, “where the employer does prescribe a

specific type and style of clothing to be worn at work, e.g., where a restaurant or

hotel requires a tuxedo or a skirt and blouse or jacket of a specific or distinctive

style, color, or quality, such clothing would be considered uniforms,” the cost

would have to be reimbursed to the employee to the extent that it drops a worker’s

wages below the FLSA minimum. Id.

Drawing the line between employer-imposed costs that may cut into a

worker’s minimum wage earnings and those that may not based on whether they

are customary living expenses makes sense in light of the underlying purpose of

the FLSA. As noted above, the Act was intended to ensure that workers receive a

wage sufficient to maintain a minimum standard of living. It only makes sense that

a worker should pay for ordinary living expenses out of that minimum wage. On

the other hand, the purposes of the Act would be defeated if an employer could

undermine the purposes of the Act by requiring a worker use his minimum wage

23

earnings to pay for business expenses unrelated to maintaining a minimum

standard of living.15

Thus, assuming the truth of the Guestworkers’ allegations that Decatur

required them to pay for the visa, transportation, and recruitment expenses that

arose from Decatur’s long-distance recruitment program, the question presented

comes down to whether those expenses should be viewed as ordinary living

expenses “like board and lodging” that the minimum wage was designed to enable

workers to afford, or whether those expenses are more properly viewed as

primarily for the benefit and convenience of the employer. If they fall in the latter

category, the Guestworkers have stated a cause of action for reimbursement up to

the minimum wage level.

D. Obtaining a Job Is Not A “Benefit” For Purposes of § 203(m) Analysis.

One final point must be addressed before turning to the analysis of the

expenses at issue in this case. Decatur and its amici argue that the fact that a

worker obtains a job by paying an expense should be considered in deciding who

primarily benefits from an expenditure. Securing a job is, no doubt, a substantial 15 Of course, even if an expense is likely to occur in daily life, an employer who imposes the expense primarily for its own benefit cannot deduct for the expense if it would cut into a worker’s minimum wage earnings. See, e.g., Bailey v. Pilots’ Assn., 406 F.Supp. 1302, 1309 (E.D. Pa. 1976) (lodging provided aboard ship cannot be counted as wages because primarily for the benefit of the employer); Brennan v. Modern Chevrolet Co., 363 F.Supp. 327, 333 (N.D. Tex. 1973) aff’d. 491 F.2d 1271 (5th Cir. 1974) (demonstrator cars provided to salesmen by car dealership were ‘primarily for the benefit of the employer’ and could not count toward minimum wage despite the fact that personal use of the car accounted for 90% of the mileage put on them).

24

benefit for a worker, but nothing in the regulations or in any reported case suggests

that such a consideration is relevant to the question of whether a required expense

may legally reduce a worker’s wage below the FLSA minimum – and for good

reason. If obtaining a job were a relevant consideration, any business expense

could be viewed as primarily for the benefit of the worker. Even workers who use

their minimum wage earnings to pay for uniforms and tools -- expenses clearly

prohibited under the regulations -- obtain jobs as a result of those purchases.

Nevertheless, by deeming such expenses to be primarily for the benefit of the

employer, 29 C.F.R. § 531.3(d) makes clear that the value of a job, as well as the

worker’s “voluntary” agreement to pay for an expense, is irrelevant. If the FLSA

is to have any meaning at all, an employer cannot exploit a worker’s need for a job

by asking him to pay for the item that benefits the employer as a condition of

obtaining that job, no matter how “willing” the worker may be to do so.

Decatur’s emphasis on the “voluntariness” of the Guestworkers’ payments,

and the resulting benefits of acquiring a job is simply a back door way of arguing

that workers should be allowed to waive their FLSA rights. In essence, Decatur is

arguing that the more desperate a worker is for a job the less protection he should

be afforded from improper deductions under § 203(m). Such an argument is

inconsistent with the prohibition on waiver of FLSA rights. See Barrentine, 450

U.S. at 740 (waiver of statutory wages by agreement would “nullify the purposes”

25

of the FLSA). See also De Luna, 338 F. Supp. 2d at 662 (“[T]he issue is not

whether working in the United States is better than working in Mexico or whether

‘on balance’ working in the United States is a ‘good deal’ for the workers. The

issue is whether failure to reimburse for transportation and visa costs during the

first workweek is a violation of the FLSA.”).

III. THE GUESTWORKERS HAVE STATED A CLAIM FOR REIMBURSEMENT OF THE COSTS ASSOCIATED WITH DECATUR’S LONG DISTANCE RECRUITMENT PROGRAM.

The Guestworkers allege that they were required to pay from $3500 to

$5000 in visa, transportation, and recruitment expenses as a condition of obtaining

employment with Decatur and that, as a result, they found themselves in a state of

debt peonage, unable to pay off their debts at the hourly rates paid by Decatur, and

legally prohibited from working for any other employer. (Doc. 16). Assuming

those facts to be true, the Guestworkers have clearly stated a claim for

reimbursement of those expenses up to the minimum wage level. The primary

purpose of the FLSA was to regulate the unequal bargaining power that employers

had over their employees which was producing labor conditions detrimental to “the

maintenance of the minimum standard of living necessary for health, efficiency,

and general well-being of workers.” 29 U.S.C. § 202(a). The FLSA sought to

eliminate those labor conditions by setting a minimum wage that could neither be

bargained down by employers nor waived by employees. Barrentine, 450 U.S. at

26

740. It is difficult to imagine a labor contract more detrimental to that goal than

Decatur’s imposition of $3500 to $5000 of debt on the Guestworkers as a condition

of employment -- debt that served no other purpose than to provide Decatur with

the assurance that its chosen workforce was properly screened, hired, and

transported to New Orleans, work permits in hand. 16

At the $6 to $7 per hour wage rates offered by Decatur, the Guestworkers

would have had to work a minimum of three to five months just to pay off their

debt even if they dedicated all of their earnings to that goal. In such circumstances,

the “maintenance of the minimum standard of living necessary for health,

efficiency, and general well-being” referenced in § 202(a) was impossible.

Decatur’s imposition of such overwhelming debt on workers as a consequence of

its chosen recruitment strategy is precisely the kind of labor agreement that the

16 There can be no doubt that Decatur’s decision to employee foreign workers rather than local workers was a choice. After Hurricane Katrina, local workers could command significantly increased wage rates. H-2B workers, on the other hand, only need be paid the prevailing wage published by DOL. 20 C.F.R. § 655.10(a)(3). Due to the time it takes to process wage survey data, those published rates are based on data collected several years before; employer provided surveys may be as much as two years old. http://www.foreignlaborcert.doleta.gov/pdf/NPWHC_Guidance_Revised_11_2009.pdf at 14. Thus, by recruiting foreign workers, Decatur was able to obtain a workforce at pre-Katrina wage levels, something that its competitors who relied on local labor could not do. Furthermore, while Decatur leans heavily on its purported compliance with rules governing the H-2 guestworker program, DOL has also challenged its compliance with the FLSA. In September 2007, approximately one year after Guestworkers filed this case, the Department of Labor also brought suit against Decatur for FLSA violations involving U.S. workers employed at Decatur seeking $ 98,907.58 in unpaid minimum wages and overtime for work performed from 2005- 2007. Chao v. Decatur Hotels, C.A. No. 07-06104, U.S. Dist. Ct., E. D. La. (2008).

27

FLSA sought to eliminate. For that reason alone the district court properly denied

Decatur’s motion to dismiss. As set forth below, an analysis of each of the

individual expenses at issue, leads to the same result.

A. Transportation Expenses.

1. The Guestworkers’ Transportation Expenses Were Primarily For The Benefit of Decatur.

The costs of transporting the Guestworkers from their home countries to

New Orleans clearly benefited Decatur by ensuring that its chosen foreign work

force arrived at the workplace when needed. Once an employer has made the

business decision to hire foreign workers, the cost of transporting them from their

homes to the United States is an inescapable part of that business decision. Without

such transportation, the employer’s entire effort to fill its positions with foreign

workers would be for naught.

Conversely, the one-time travel expense necessary to get an H-2B visa

worker to the place of temporary employment cannot be viewed as an ordinary

living expense. That is particularly true given the fact that H-2B workers must

maintain their foreign residences, 8 U.S.C. § 1101(a)(15)(H)(ii)(b), and only travel

to the U.S. work site temporarily.17

17 H-2B visas are generally limited to one year or less. 8 C.F.R. § 214.2(h)(6)(ii)(B).

In addition, H-2B visas prohibit workers from

28

working with anyone other than the petitioning employer. 18 Upon the expiration

of the work or the visa, whichever occurs first, the worker must return to his

overseas residence.19

That the one-time transportation expense for getting to New Orleans was for

the benefit of Decatur is confirmed by DOL’s illustrative regulations. Those

regulations indicate that daily commuting is viewed as an ordinary living expense

that workers can be expected to pay out of their minimum wage earnings, 20

C.F.R. § 531.32(a), while transportation that is “an incident of and necessary to the

employment” is considered to be primarily for the benefit and convenience of the

employer and cannot be deducted from minimum wage earnings. 20 C.F.R. §

Just as paying for a specialty tool or a unique uniform serves

no purpose other than to allow a worker to perform a particular job, so too paying

the one-time costs of traveling to New Orleans served no purpose for the

Guestworkers other than to allow them to perform Decatur’s job. In such

circumstances, the transportation expense must be seen as primarily for the benefit

of the employer.

18 See 8 C.F.R. §214.2(h)(1)(i) (2006) (“Under section 101(a)(15)(H) of the Act, an alien may be authorized to come to the United States temporarily to perform services or labor for . . . an employer, if petitioned for by that employer.”); DOL General Administration Letter (GAL) 1-95 “Procedures for H-2B Temporary Labor Certification in Nonagricultural Occupations”, 60 Fed. Reg. 7216, 7219 (Feb. 7, 1995) (“A temporary labor certification is limited to one employer’s specific job opportunity; it may not be transferred from one employer to another.”). The procedures in GAL 1-95 were the ones in place at the time Decatur was granted H-2B visas. 19 See 8 C.F.R. § 214.1(a)(3)(ii) (alien must agree to depart the U.S. upon expiration of his authorized period of stay).

29

531.32(c). The one-time travel expenses required to get H-2B visa workers from

their permanent homes to the temporary work site in the United States are clearly

more like the latter than the former. Such travel expenses arise only because of

Decatur’s decision to hire workers overseas, rather than locally, and are undeniably

necessary to the employment inasmuch as workers recruited in their overseas

homes must travel if they are to get to the place of employment.20

DOL has consistently held that transportation expenses incident to an

employer’s long-distance recruiting effort are primarily for the benefit of the

employer,

21

Transportation charges are an inevitable and inescapable consequence of having foreign H-2A workers employed in the United States. These are costs which arise out of the employment of H-2A workers. When [an employer] seeks employees and hires from its locale, transportation costs that go beyond basic commuting are not necessarily going to arise from the employment relationship. Employers resort to the H-2A program because they are

as has every court that has considered the question. For example, in

Arriaga, the court concluded that the costs of transporting Mexican H-2A

strawberry pickers to Florida were primarily for the benefit of the employer:

20 By contrast, a worker can control his daily commuting expenses, at least to some extent, by where he chooses to live. 21 DOL first expressed this view in an opinion letter dated May 11, 1960. It reiterated that position in DOL Opinion Letter 937, Feb. 4, 1969 (round trip travel costs between the point of hire and Kwajalein Atoll, Marshall Islands incidental to employer’s recruitment program); again in 1970, DOL Opinion Letter 1139 (Dec. 10, 1970), and again in 1990, DOL Opinion Letter 1721 (June 27, 1990) (transportation of temporary visa workers). All of these opinion letters are attached as Addendum B to DOL’s Brief In Support of En Banc Rehearing.

30

unable to employ local workers who would not require such transportation costs; transportation will be needed, and not of the daily commuting type, whenever employing H-2A workers.

Arriaga, 305 F. 3d at 1242.22

2. Decatur’s Hypothetical Examples Are Irrelevant.

For all of these reasons, the Guestworkers have

clearly stated a cause of action for reimbursement of their travel costs to the extent

those costs cut into their minimum wage earnings.

Decatur Hotels and its amici resort to hyperbolic claims about the “danger”

of treating transportation expenses as primarily for the benefit of the employer,

arguing that there is no principled way to limit the reasoning of Arriaga. (Decatur

Opening Br. at 37 n. 14) (Amicus Br. at 16-20).

There are clear distinctions, however, between Decatur’s hypotheticals and

this case. First, as required by their visas and job offers, the work at issue here was

temporary, lasting ten months or less. Decatur’s hypotheticals, instead, involve

permanent relocation for work. Permanent relocation, with all of the opportunities 22 See also, Glassboro Serv. Assn., 1979 WL 1989 (cost of transporting farmworkers from point of recruitment in Puerto Rico to New Jersey primarily benefits the employer); Ortiz v. Paramo, 2009 WL 4575618 at *2-4 (D.N.J. 2009) (transportation of Puerto Rico farmworkers to New Jersey); Rivera, 2008 WL 81570 (E.D. Pa. 2008) (transportation of Mexican and Guatemalan workers to the U.S. to work temporarily as H-2B landscapers); DeLeon-Granados, 581 F.Supp.2d 1295, 1308-1313 (transportation costs of Mexican, Guatemalan, and Honduran forestry workers); Martinez-Bautista v. D&S Produce, 447 F.Supp.2d 954, 963-964 (E.D. Ark. 2006) (transportation of Mexican H-2A farmworkers to U.S.); Recinos-Recinos v. Express Forestry, 2006 WL 197030 at *14 (E.D. La. 2006) (transportation of H-2B forestry workers to U.S.); DeLuna v. North Carolina Growers Assn., 338 F.Supp.2d 649, 662 (E.D.N.C. 2004) (transportation of Mexican H-2A farmworkers to U.S.); Torreblanca v. Naas Foods, 1980 WL 2100 (N.D. Ind. 1980) (transportation of migrant farmworkers from Texas to Indiana).

31

it opens up, may change the calculation of who primarily benefits from

transportation expenses. As the court in Rivera noted when confronted with

similar hypotheticals, “[i]t is possible that the cost of long-term relocation is akin

to an ordinary living expense.”23

Second, Decatur recruited and hired the Guestworkers in their home

countries. Decatur’s hypotheticals, on the other hand, do not involve targeted long

distance recruitment efforts. Rather they involve advertising of positions in

national newspapers or on the internet for jobs that are accepted by applying at the

worksite. The transportation expenses of such workers are less clearly for the

benefit of the employer than the travel expenses at issue here. Even the court in

Glassboro Services, noted that the transportation expenses of Puerto Rican

farmworkers who simply showed up at the employers’ farms in New Jersey were

not reimbursable.

2008 WL 81570 at *12.

24

Perhaps the strongest proof that Decatur’s slippery slope argument is

baseless is the fact that, in the fifty years since DOL’s 1960 opinion letter first held

Glassboro Services Assn., 1987 WL 25334 at *6.

23 Even though many jobs in the United States involve “at will” employment, workers who permanently relocate for such jobs presumably do not do so in the expectation that they will be terminated. If they are, unlike H-2B workers, they remain free to look for other jobs in the area to which they have relocated. See Rivera, 2008 WL 81570 at *12. 24 Decatur’s Amici make much of federal jobs that do not offer “relocation expenses.” As noted above, this case is not about a right to relocation expenses. The issue in this case is simply whether, under the circumstances of this case, travel expenses for a temporary job may cut into a worker’s minimum wage earnings. As noted above, it could have recouped all of the costs associated with its recruitment effort by deducting those costs from the workers wages over time as long as it did not bring their wages below the FLSA minimum in any work week.

32

that transportation costs associated with an employer’s long distance recruitment

program had to be reimbursed up to the minimum wage level, and the more than

thirty years since the Third Circuit upheld that principle in Glassboro Services

Assn., no reported case has ever sought to expand that right to reimbursement of

travel expenses beyond the very narrow confines of targeted recruitment for

temporary jobs. In the unlikely event that someone should seek to expand that

principle in the future, there will time enough to apply the law to the specific facts

of that case. As the Eleventh Circuit noted, some categories of expenses are quite

“nuanced” and “are primarily for the benefit of the employer or employee

depending on the specific facts.” Arriaga, 305 F.3d at 1243.

3. Reimbursing Transportation Expenses Does Not Favor Foreign Workers.

Decatur’s argument that reimbursing the Guestworkers’ transportation costs

up to the minimum wage level would result in foreign workers being treated better

than U.S. workers is simply false. As the Glassboro Services, 1987 WL 25334,

and Torreblanca, 1980 WL 2100, make clear, the principle that transportation

expenses associated with long distance recruitment should not cut into a worker’s

minimum wage applies to U.S. workers in exactly the same way as it does for

foreign workers.

33

B. Visa Expenses.

Like the transportation expenses, the fees charged by the U.S. government

for issuing visas are primarily for the benefit of the employer. No H-2B worker

hired overseas by a petitioning employer can legally enter the country, let alone

work, without obtaining a visa. Thus, once an employer makes business decision to

hire foreign workers, a visa is vital. It is as necessary for performing the job as

specialized tools would be. Arriaga, 305 F.3d at 1244. Other kinds of government

issued licenses or permits that employees must have to perform a job are viewed as

being primarily for the benefit of the employer. See Brennan v. James Gross, 1974

WL 1279 at * 1 (W.D. Tex. 1974) (health certificates and food handling permits

for restaurant workers for primary benefit of employer); Administrator Wage Hour

Div., DOL v. Ceja, No. 2000-FLS-00004 (DOL ALJ 2001) (cost of required

weapons certification classes and gun permits for security guards were primarily

for the benefit of the employer). The Guestworkers’ visa expenses are

indistinguishable from the permits in these cases.

Conversely, the cost of obtaining a work visa is not an ordinary living

expense that H-2B workers would ever incur apart from the specific job that the

visa allows them to perform. Like specialized uniforms or tools of the trade, H-2B

visas, and the costs associated with obtaining them, are only of use for the specific

job for which they are issued and nothing else. For this reason, courts that have

34

addressed the issue have uniformly concluded that mandatory visa expenses are

primarily for the benefit of the employer and may not reduce a worker’s wages

below the FLSA minimum. See Arriaga, 305 F.3d at 1244 (H-2A visas); Rivera,

2008 WL 81570 at *12 (H-2B visas); De Leon Granados, 581 F. Supp. 2d at

1309-1313 (H-2B visas); DeLuna, 338 F.Supp.2d at 662 (H-2A visas).

C. Recruitment Expenses.

Recruiting expenses incident to an employer’s long-distance recruiting

program are also for the benefit and convenience of the employer. Advertising for

job applicants, evaluating their qualifications, and hiring them are core employer

functions. The more effort an employer puts into selecting and hiring its

workforce, the better qualified and more stable its workforce will be. Employers

of sufficient size establish human resources departments to secure the benefits of

properly made recruitment and hiring decisions. Conversely, no benefits inure to

workers from screening and hiring workers for a particular job other than the

benefit of the job itself, which, as noted above, is not a relevant consideration in

determining whether an expense may cut into a worker’s minimum wage earnings.

The expenses associated with helping an employer secure a qualified workforce are

simply not ‘daily living expenses’ that a worker would be likely to incur apart from

the job being offered by the employer.

The fact that an employer chooses to hire a foreign workforce, instead of a

35

local workforce, may make screening and selecting workers more important,25

Courts that have addressed this issue have unanimously concluded that

recruitment expenses imposed on workers as a result of an employer’s long-

distance recruitment program are primarily for the benefit and convenience of the

employer. For example, in Rivera, 2008 WL 81570 at *13-14, a U.S. landscaping

company, Brickman, contacted companies that “specialized in bringing together

large cohorts of able-bodied workers and representing them in finding suitable

foreign employment.” Id. at *13. Brickman designated one such firm in Mexico

and one in Guatemala. Id. These ‘worker representatives’ charged each worker a

fee, yet the court concluded that that fee was primary for the benefit of the

employer:

but

it does not make the costs associated with those efforts any less of a business

expense that primarily benefits the employer. Whether done locally or overseas,

selecting and hiring a workforce is a “service incidental to carrying on [an]

employer’s business” that cannot be allowed to reduce a worker’s wage below the

FLSA minimum. 29 C.F.R. § 531.3(d).

[I]f Brickman has structured the process in such a way that a prospective employee cannot but pay a recruiting fee in order to work for Brickman, the cost of the recruiting fee is primarily for Brickman’s benefit as a

25 Foreign workers must not only be screened for their qualifications to perform the job, but also for their ability to qualify for a visa, which involves overcoming the presumption that they are immigrants. 8 U.S.C. § 1184(b).

36

cost associated with Brickman’s business decision to utilize an exclusive worker’s representative. . . . Whether Brickman's decision to use, in each country in which it sought workers, a single workers' representative and to filter all prospective employees through that representative was motivated by the convenience of having the workers' paperwork handled by professionals or by the strictures of the H-2B program (or, very likely, by some combination of the two) is immaterial. If the former, then the decision was to reduce difficulties associated with the H-2B process, and, thus, for Brickman's benefit and convenience. If the latter, then it was a direct result of Brickman's business decision to participate in the H-2B program. Either way, it does not qualify as an “other facility” for FLSA purposes because the workers' representatives' fees were not ordinary living expenses in any sense of the term.

Id. at 14. See also Avila-Gonzalez v. Barajas, 2006 U.S. Dist. LEXIS 9272, at *7

(M. D. Fla. March 2, 2006) (ordering employer of guestworkers to reimburse fees

paid “in order to be selected for the job”).26

1. The Guestworkers Right To Be Reimbursed For Recruitment Fees Must Be Remanded For Trial.

The panel opinion went beyond the allegations of the complaint and held 26 Arriaga, 305 F.3d at 1244-1245, is not to the contrary. In that case, the employer, recognized that recruitment and hiring costs were primarily for its benefit and paid its Mexican recruiter, Cervantes, a per worker fee for hiring and processing workers. It also specifically directed Cervantes not to charge workers for those services. Most workers contacted Cervantes directly and paid no recruitment fees, but some workers, who were unaware of where to apply for jobs, paid local “village recruiters,” to refer them to Cervantes. Because the employer had done nothing to make payment of these referral fees a pre-condition of obtaining the job or to suggest that such charges were authorized, the Eleventh Circuit concluded that the fee paid for these referrals was not a condition of employment imposed by the employer, making it unnecessary to reach the question of whether the recruitment fees were personal living expenses or primarily for the benefit of the employer. Id. at 1245. Here, by contrast, the Guestworkers allege that recruitment fees were a pre-condition of obtaining the job, just as they were in Rivera.

37

that

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.

Slip Op. at 15. On the basis of this factual finding the panel concluded that Rivera

was distinguishable and that the Guestworkers were not entitled to reimbursement

of the mandatory recruitment fees they paid. The Guestworkers do not believe that

this Court has jurisdiction under Sec. 1292(b) to review the district court’s finding

that the relevant facts were disputed, let alone make its own findings of undisputed

facts, particularly inasmuch as discovery was still in its early stages at the time the

order under review was entered. Nevertheless, in the event that the Court

determines that it can review the summary judgment record, the panel’s conclusion

should be rejected for several reasons.

First, nothing in Rivera suggests that an employer must have actual

knowledge of recruitment charges for those charges to be reimbursable. Indeed,

the opinion does not indicate one way or another whether Brickman was aware of

the recruitment charges it imposed. The Rivera court found Brickman liable for

the worker’s recruitment fees simply because it structured its long-distance

recruitment program in such a way that workers could not avoid payment of the

recruitment fee. That an employer need not have specific knowledge of an

expense imposed by its recruitment scheme is apparent from the way courts handle

38

the issue of visa fees. None of the cases that find visa fees reimbursable discuss

whether the employer was aware that the government charged such fees.27

Second, even if knowledge were relevant, the Panel’s factual finding that

Decatur was unaware of the foreign recruiters or their charges is not established by

the record. The district court made no findings on that point one way or the other

and the summary judgment record before the trial court was anything but

conclusive. Decatur was clearly aware of the existence of foreign recruiters. In its

Nevertheless, the visa fee was found to be reimbursable in each of those cases

because it was an inescapable consequence of the employer’s foreign recruiting

effort. Recruitment fees are no different. What matters is whether an employer

structures its foreign recruitment program in such a way as to make payment of an

expense mandatory. If it does, then those required expenses cannot be allowed to

bring a worker’s wage below the statutory minimum. An employer’s ignorance of,

or indifference to, the costs imposed by its recruitment program is simply not a

defense to an FLSA violation. See Barcellona v. Tiffany English Pub, 597 F.2d

464, 468-469 (5th Cir. 1979) (“We do not believe an employer may rely on

ignorance alone as reasonable grounds for believing that its actions were not in

violation of the Act.”)

27 See, e.g., Arriaga, 305 F.3d at 1244; Rivera, 2008 WL 81570 at *12; DeLuna, 338 F.Supp.2d at 662.

39

30(b)(6) deposition, it admitted that, in their very first meeting, Accent Group

provided Decatur with a document outlining the services that Accent would

provide. (Doc. 71-3 at 25) (Doc. 71-6, Ex. 2). That document states that Personnel

Recruiters LLC (another Pickering company) “connects with Recruiters in Mexico

and/or Latin America,” id. Ex. 2 at 3, and that Personnel Recruiters job was to

“oversee” those recruitment services. Id. Ex. 2 at 1.

As for knowledge of the recruitment fees themselves, Pickering, Accent’s

owner, testified that she did not discuss recruitment costs or any other costs when

she dealt with Decatur’s CEO Patrick Quinn, (Doc 71-8 at 100-101), although she

did state that her decision to hire foreign recruiters was the same procedure she

followed with all of her clients, id. at 104-105, and that none of her clients ever

paid for transportation or recruitment (“agency”) costs. Id. at 119-120. The

Guestworkers have not yet deposed Quinn or other Decatur staff who dealt with

Pickering to determine whether the absence of discussion regarding recruitment

charges reflected Quinn’s knowledge of Pickering’s standard operating procedure

or lack of interest in the details of how workers would be recruited.28

28 Decatur’s knowledge and acceptance of Pickering’s use of foreign recruiting agencies that charged workers for their services is further evidenced by the fact that workers arrived in groups over a two month period. Decatur testified that the workers discussed the expenses they incurred with Decatur staff (Decatur 30(b)(6), Doc. 71-4 at pp. 85-86) yet Decatur apparently never complained to Pickering about the charges. To the contrary, Decatur affirmed and extended its 2005 contract with Pickering.. (Decatur 30(b)(6), Doc. 71-6 at p. 10).

40

Third, even if Decatur did not know that the foreign recruiters were charging

workers fees, the Accent Group, Decatur’s agent was aware of that fact and its

knowledge can be imputed to Decatur pursuant to Louisiana mandate (agency)

law. A basic tenant of that law is that “the knowledge of an agent, mandatory, is

imputed to the principal. Such knowledge ‘is imputed to the principal even if the

agent neglected to specifically convey those facts to the principal.’” General

American Oil Co. v. Meche, 442 So.2d 496, 499 (La. App. 3d Cir. 1983) quoting

Bank of Louisiana v. Argonaut Ins. Co., 248 So.2d 349 (La. App. 4th Cir. 1971).

As set forth in their written contract, Accent Group was clearly acting as Decatur’s

“authorized agent” for “recruiting qualified foreign workers from Mexico and/or

from other Latin American countries, arrang[ing] their interviews at the American

Consulate in their home country, and have [sic] the workers reporting to the city on

the expected date.” (Doc 71-6, Ex. 22) (identified in Decatur Deposition, Doc 71-5

at 12). Moreover, Decatur never placed any limitations on what Accent Group did

to obtain workers; all of those decisions were left up to Ms. Pickering. (Doc 71-5

at 39-40). Thus, Accent Group was acting within the scope of its actual authority

when it contracted with foreign entities to recruit and hire H-2B workers for

Decatur.29

29 “An agent's power or authority is composed of his actual authority, express or implied, together with the apparent authority which the principal has vested in him by his conduct.” Boulos v. Morrison, 503 So. 2d 1, 3 (La. 1987). Actual authority may be express or implied.

(Doc 71-9, Ex. 9, 25, 26) (contracts with foreign recruiters) (identified

41

in Deposition of V. Pickering, Doc 71-7 at 59-60 and Doc 71-8 at 110-111). As

those contracts make clear, Pickering did not pay the foreign recruiters for their

services but instead charged them $900 for each position they filled, thereby

ensuring that the recruiters would have to charge each H-2B worker something

more than $900 for their services. Inasmuch as Pickering was acting within the

scope of her authority in setting up this recruitment procedure, her knowledge of

that procedure, including her knowledge that the foreign recruiting entities would

have to charge the workers, is imputed to Decatur. General American Oil Co., 442

So.2d at 499. Decatur remains liable for the knowledge and actions of Pickering,

even if Pickering’s actions in selling the jobs to the foreign recruiters is viewed as

self-dealing that did not benefit Decatur. Hoffman, Siegel, Seydel, Beinvenu &

Centola, APLC v. Lee, 936 So.2d 853, 859-61 (La. App. 4th Cir. 2006) (in suit by

third party, principal was bound by contract entered into by its agent as part of the

agent’s authorized duties, even though the agent entered into the contract solely in

order to further his scheme to defraud the principal). See also Gleason v. Seaboard

Air Line R. Co., 278 U.S. 349, 356 (1929) (despite railroad’s ignorance of its

Express authority can be in the form of written authorization or other verbal communication. Bank of Greensberg v. Forrest, 520 So. 2d 728, 732 (La. 1988). Implied authority is “actual authority, which, while not expressed in the agency agreement, is inferred from the circumstances, purposes, and nature of the agency itself. An agent is vested with the implied authority to do all of those things necessary or incidental to the agency assignment.” Broadway v. All-Star Ins. Corp., 285 So. 2d 536, 538 (La. 1973). See also La. C.C. Art. 2995 (a “mandatory may perform all acts that are incidental to or necessary for the performance of the mandate.”).

42

agent’s scheme to defraud third party, railroad liable to third party because agent

was acting within scope of his authority). This agency principal of imputation is

supported by sound public policy designed “to protect innocent third parties or . . .

to prevent principals from benefiting at the expense of innocent third parties.”

Bankers Life Ins. Co. of Neb. v. Scurlock Oil Co., 447 F.2d 997, 1005 (5th Cir.

1971).

As noted above, it is premature for this Court to rule on the merits of the

Guestworkers’ claim for reimbursement of recruitment fees. They have stated a

cause of action for such reimbursement which is all that this Court need find to

affirm the trial court’s denial of the motion to dismiss. If, however, this Court

considers the merits of Decatur’s motion for summary judgment, for all the reasons

stated above sufficient disputed facts exist to allow the Guestworkers to go to trial

on that claim.

IV. DECATUR HOTELS’ OTHER ARGUMENTS ARE WITHOUT MERIT.

A. The INA Is Irrelevant To The Question Of Whether

Transportation Costs Are Reimbursable.

Section 1184(c)(5) of the INA provides that if an employer terminates an H-

1B, H-2B, O, or P visa worker before the end of his visa term, the employer must

pay the reasonable costs of the worker’s return transportation to his home country.

8 U.S.C. § 1184(c)(5). Based on this one provision (and the absence of other

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provisions regarding transportation costs in the INA), Decatur argues that the INA

should control the Guestworkers’ right to reimbursement of transportation costs.

Decatur’s arguments take two related forms: First it argues that this INA repeals,

by implication, any requirements the FLSA may impose on transportation

expenses. Second it argues that, even if the INA does not repeal the relevant

FLSA provisions, it should guide the interpretation of those provisions. Neither of

these arguments has merit.

1. The INA Does Not Repeal the FLSA.

Repeals by implication are not favored and can only arise when two statutes

cannot reasonably be harmonized. J.E.M. Ag Supply, Inc. v. Pioneer Hi-Bred Int’l.

Inc., 534 U.S. 124, 143-144 (2002); Tenn. Valley Auth. v. Hill, 437 U.S. 153, 189-

90 (1978); Wood v. U.S., 41 U.S. 342, 363 (1842) (holding a statute only repealed

by implication if there is a “positive repugnancy” between it and the new statute)

(Story, J.). If an employer can comply with two overlapping statutes, it must do

so, because in the absence of express repeal statutes are presumed to be mutually

supplementary. Powell v. U.S. Cartridge Co., 339 U.S. 497, 518 (1950) (despite

nearly complete overlap between FLSA and Walsh Healey Act as applied to

workers in question, the Acts were found to be mutually supplementary and

employer was required to comply with both Acts).

Here, there is no question that an employer can comply with both the INA

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and the FLSA. Nothing in the requirement that an employer pay the return

transportation costs of terminated workers in any way precludes reimbursing

workers for in-bound transportation costs that bring wages below the minimum

wage level. Accordingly, there is no basis for finding that the INA repeals the

FLSA by implication. See Arriaga 305 F.3d at 1235-1236 (rejecting the argument

that the INA repeals application of FLSA to foreign workers); Rivera, 2008 WL

81570 at *2-*4 (same).

2. The INA Is Irrelevant To The Interpretation of Plaintiffs’ FLSA Rights.

Decatur’s argument that the INA and regulations issued pursuant to it should

be considered in determining whether transportation costs are primarily for the

benefit of the employer is equally flawed. The INA and the FLSA serve two very

different purposes. The former sets the conditions under which aliens may enter

the United States while the latter is a statute of general applicability regulating the

wages and hours of workers, whether citizen or alien. It would be strange indeed

to suggest that Congress would use the INA as a vehicle to express its opinion on

the proper interpretation of a statute designed to regulate wages and hours of

employees, most of whom are citizens. Second, nothing in the INA speaks to the

issues raised by the FLSA provision in question. In requiring employers to pay

return transportation for terminated visa workers, the INA is focused on ensuring

that alien workers leave the country regardless of their earnings level; it is not

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concerned with who benefits from the transportation expenses and says nothing

about the kinds of expenses that employees should or should not have to pay out of

their statutorily mandated minimum wage earnings.

Third, 8 U.S.C. § 1184(c)(5), was first enacted in 1990. See Pub. L. No.

101-649 (Nov. 29, 1990). That was more than thirty years after DOL first

expressed its opinion that the FLSA required workers to be reimbursed up to the

minimum wage for travel expenses arising from an employer’s long distance

recruitment efforts. It must be presumed that Congress was aware of that long-

standing DOL policy at the time it adopted 8 U.S.C. § 1184(c)(5). See Traynor v.

Turnage, 485 U.S. 535, 546 (1988) (noting that courts generally assume that

Congress is aware of how an agency interprets the statutes it has responsibility for

implementing). As the Rivera court explained at length, the most logical

conclusion to be drawn from the INA’s silence with respect to pre-employment

travel expenses is that Congress accepted DOL’s long-standing interpretation of

the FLSA and saw no reason to change it. Rivera, 2008 WL 81570 at *4-*6. In

passing 8 U.S.C. § 1184(c)(5) Congress merely supplemented the FLSA by

requiring that return transportation expenses be paid in full regardless of earnings

when certain visa workers are terminated early.

In any event, later enacted laws like the INA that “do not declare the

meaning of an earlier law, . . . . do not seek to clarify an earlier enacted general

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term . . . . do not depend for their effectiveness upon clarification or a change in the

meaning of an earlier statute, . . . . [or that] do not reflect any direct focus by

Congress on the meaning of the earlier enacted provisions” are “beside the point”

in interpreting the earlier enactment. Alemendarez-Torres v. United States, 523

U.S. 224, 237 (1998) (citations omitted); Gutierrez v. Ada, 528 U.S. 250, 257-258

(2000). This is decidedly not a case like Sure-Tan, Inc. v. NLRB, 467 U.S. 883

(1984), or Hoffman Plastic Compounds v. NLRB, 535 U.S. 138 (2002), where there

was a direct conflict between the INA and the NLRB’s reinstatement and

backwage remedies at issue. Here there are no conflicts between INA and the

Guestworkers’ reading of the FLSA. And in the absence of a conflict, or clear

language in the INA addressing the FLSA issue, the INA is irrelevant to the issues

in this case. Cf. Bollinger v. Director Office of Worker Comp. Programs, __ F.3d

___ (5th Cir. April 22, 2010) (finding IRCA to be irrelevant to worker’s right to

receive compensation).

3. Regulations Promulgated Under The INA Are Irrelevant To The Questions In this Case.

Decatur also argues that regulations promulgated under the INA should be

considered in interpreting the FLSA. None of those regulations offer any more

insight into the meaning of the FLSA than the INA itself.

a. H-2A Regulation.

Since 1964, DOL has, by regulation, required employers importing

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temporary foreign agricultural workers to reimburse the full cost of in-bound

transportation after the expiration of 50% of the contract period. See 29 Fed. Reg.

19101 (Dec. 30, 1964); 20 C.F.R. 655.122(h)(1) (2010). The fact that DOL, by

regulation, has accorded agricultural workers the additional right to full

reimbursement of their transportation expenses after completion of 50% of their

contract, but not other kinds of foreign workers, in no way contradicts or

diminishes DOL’s view that no worker of any kind should not have to pay for

transportation expenses arising from long distance recruitment out of their

minimum wage earnings. DeLeon-Granados, 581 F.Supp.2d at 1309-1310

(employer’s obligations under the FLSA exist independent of the visa regulations).

DOL has made that point clear by the number of times after 1964 that it has

reiterated its view that point-of-hire transportation expenses of all workers are for

the primary benefit of the employer and by its consistent statements to H-2A

employers that they much comply with both statutes. See USDOL Notice

Accepting Clearance Orders, quoted in De Luna, 370 F. Supp. 2d at 388.

b. H-1B Regulation.

Decatur’s arguments with respect to DOL’s H-1B regulation at 20 C.F.R. §

655.731(c)(9)(iii)(C) are similarly unavailing. H-1B visas are granted to aliens

coming to work in highly skilled “specialty occupations,”8 U.S.C. § 1101(a)(15)

(H)(i)(b), such as architecture, engineering, mathematics, medicine and law. 8

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C.F.R. § 214.2(h)(4)(ii). DOL regulations require that H-1B workers be paid an

“approved wage” that is generally well above the minimum wage given the

professional qualifications required for the visa.30

a recoupment of the employer’s business expense (e.g. tools and equipment; transportation costs where such transportation is an incident of and necessary to the employment; living expenses when the employee is traveling on the employer’s business) (for purposes of this section, initial transportation from and end-of-employment travel to the worker’s home country shall not be considered a business expense).

The regulation cited by Decatur

was adopted in 2000 and allows an employer to take deductions from an H-1B

workers’ “approved wage” as long as those deductions do not represent:

20 C.F.R. § 655.731(c)(9)(iii)(C) (emphasis added); 65 Fed. Reg. 80110, 80219

(Dec. 20, 2000). The phrase “for purposes of this section only” was clearly added

by DOL to limit this provision to high paid H-1B workers and to prevent

employers like Decatur from arguing that the regulation should somehow be

applied to other kinds of workers. See Rivera, 2008 WL 81570 at *3 (noting that

the fact that the regulation is expressly self limited could imply that the opposite is

the norm). More fundamentally, the regulation:

30 H-1B workers must be paid the higher of the prevailing wage for persons in their occupation or the actual wage that the employer pays to persons with the alien’s qualifications. 20 C.F.R. § 655.731. Since H-1B workers are employed in occupations that “require[] theoretical and practical application of a body of highly specialized knowledge” and have “a bachelor’s or higher degree in the specific specialty (or its equivalent),” 8 U.S.C. § 1184(i)(1), this wage is generally well above the FLSA minimum wage. See 20 C.F.R. § 655.737 (describing regulations applicable to H-1B workers earning $60,000 a year or more).

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creates no conflict with the FLSA. It stipulates that the employer may take deductions from the higher H1-B wage rate for providing point-of-hire transportation, while the FLSA (under plaintiff's argument) would hold that the employer may not take such deductions from its lower wage rate. Such a result is not only harmonious, it may well be a good compromise for ensuring that point-of-hire transportation costs do not knock real wages down too far without forcing employers to reimburse them in toto.

Rivera, 2008 WL 81570 at *3.31

c. 22 C.F.R. § 40.1(l).

Here again, while this regulation was published

pursuant to the INA, it is a DOL regulation. DOL plainly does not view its

regulation as in any way contrary to its position that no worker should not have to

pay point-of-hire transportation costs out of his or her FLSA minimum wages. As

the agency responsible for drafting and implementing both the H-1B regulation and

the relevant FLSA regulations, its view that they are consistent should be accorded

deference.

Finally Decatur relies on a State Department regulation adopted in 2000

defining the phrase “make or file an application for a visa” to mean

For a nonimmigrant visa applicant, submitting for formal adjudication by a consular officer of a completed Form DS–156, with any required supporting documents and the requisite processing fee or evidence of the prior payment

31 There are other relevant differences between H-1B and H-2B workers that might explain the difference in treatment. Workers entering the U.S. under an H-1B visa do not need to maintain a permanent residence abroad and may petition for permanent residency in the U.S. while working on an H-1B visa, a benefit unavailable to H-2B workers. Id. at § 214.2(h)(16). Thus their transportation to the U.S. may be more like permanent relocation than temporary travel.

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of the processing fee when such documents are received and accepted for adjudication by the consular officer.

65 Fed. Reg. 54413 (Sept. 8, 2000) codified at 22 C.F.R. § 40.1(l)(1). The fact that

the definition of filing a visa application includes paying the requisite fee says

nothing whatsoever about whether an employer engaged in foreign recruitment

must treat the fee payment as a wage deduction for purposes of complying with the

FLSA – which is hardly surprising given the State Department’s lack of expertise

to opine on the proper interpretation of the FLSA.

B. The Guestworkers’ Claims Do Not Involve Extraterritorial Application of the FLSA.

Decatur Hotels relies on Reyes-Gaona v. North Carolina Growers Ass’n.,

Inc., 250 F.3d 861 (4th Cir. 2001), to argue that the Guestworkers are seeking to

apply the FLSA extraterritorially. In Reyes-Gaona the Fourth Circuit rejected the

Age Discrimination in Employment Act (ADEA) claim of a Mexican national who

applied for work in Mexico with an employer participating in the H-2A

guestworker program and who was rejected during the hiring process in Mexico

because of his age. Reyes-Gaona has no application to this case because the work

at issue and the failure to pay minimum wage for that work both occurred within

the United States. See De Leon-Granados, 581 F. Supp. 2d at 1310 (rejecting

application of Reyes-Gaona to H-2B worker claims for unreimbursed travel, visa

and recruitment expenses); Olvera-Morales v. Sterling Onions, Inc., 322 F. Supp.

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2d 211, 221 (N.D.N.Y. 2004) (distinguishing Reyes-Gaona in Title VII context).

Indeed, the concurrence in Reyes-Gaona specifically noted that “[h]ad Reyes-

Gaona been hired by the NGCA, once he began work in this country, the ADEA

would have protected him from unlawful employment discrimination.” 250 F.3d at

867 (Motz, J., concurring).

Decatur Hotels also argues that the Guestworkers fall within the exemptions

of 29 U.S.C. § 213(f), which states that certain FLSA protections, including

minimum wage and overtime provisions, “shall not apply with respect to any

employee whose services during the workweek are performed in a workplace

within a foreign country . . .” Because the work at issue here was performed in

New Orleans, § 213(f) has no relevance to this case. DeLeon-Granados, 581

F.Supp.2d at 1310 (rejecting § 213(f) defense to claim for reimbursement of visa

expenses). The fact that the Guestworkers incurred the expenses which operated

as de facto deductions while they were physically abroad does not alter the analysis

any more than if employees of a restaurant in Brownsville crossed the international

bridge to purchase their uniforms in Matamoros.

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Conclusion

For all of the foregoing reasons, this Court should affirm the district court’s

certified order in all respects.

Respectfully submitted this 12th day of May 2010

s/ Jennifer J. Rosenbaum_______________ Jennifer J. Rosenbaum LSBA No. 31946 New Orleans Workers’ Center for Racial Justice 217 N. Prieur St. New Orleans, LA 70112 (504) 309-5165 [email protected] Admitted to the Fifth Circuit

Edward Tuddenham Texas Bar No. 2028300 1339 Kalmia Rd. NW Washington, DC 20012 (202) 249-9499 [email protected] Admitted to the Fifth Circuit Mary Bauer Virginia Bar Number 31388 Immigrant Justice Project Southern Poverty Law Center 233 Peachtree Street Suite 2150 Atlanta, GA 30303 Tel (404) 521-6700 [email protected] Admitted to the Fifth Circuit

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CERTIFICATE OF SERVICE

I hereby certify that, On May 12, 2010, the attached EN BANC BRIEF OF APPELLEES, was filed with the Clerk of Court using the CM/ ECF system which will automatically serve via CM/ ECT all registered attorneys of record and was served up on the following counsel via email pursuant to confirmed authorization to accept email service: Leslie Ehret Joseph Mole Suzanne Risey Frilot L.L.C. 1100 Poydras Street, Suite 3700 New Orleans, LA 70163 Ann Margaret Pointer Counsel for Amici Curiae Fisher & Phillips, LLP 1500 Resurgens Plaza 945 East Paces Ferry Road Atlanta, GA 30326 Diane A. Heim U.S. Department of Labor Office fo the Solicitor Room N-2716 200 Constitution Avenue, N.W. Washington D.C. 20210 Catherine Ruckelshaus Counsel for Amici Curiae National Employment Law Project 75 Maiden Lane, 6th Floor New York, NY 10038

s/ Jennifer J. Rosenbaum_____________ Jennifer J. Rosenbaum Counsel for Appellees

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CERTIFICATE OF COMPLIANCE WITH FED. R. APP. P. 32(a) I HEREBY CERTIFY the following on this 12th day of May 2010:

1. This brief complies with the type-volume limitation of Fed. R. App. P. 32(a)(7)(B) because this motion contains __13870______words, excluding the parts of the motion exempted by Fed. R. App. P. 32(a)(7)(B)(iii).

2. This motion complies with the typeface requirements of Fed. R. App. P.

32(a)(5) and the type style requirements of Fed. R. App. P. 32(a)(6) because this brief has been prepared in a proportionally spaced typeface using Microsoft Word 2003 in Times New Roman, 14 point font.

s/ Jennifer J. Rosenbaum________________ Jennifer J. Rosenbaum Attorney for Appellees

UNITED STATES COURT OF APPEALS FOR THE FIFTH … · and RODOLFO ANTONIO VALDEZ-BAEZ, ... Altagracia...

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