Summary of a Recent
Judicial Development in
Labor

Poultry Producer-Company Not A "Farmer"
Under National Labor Relations Act

John D. Mead
National AgLaw Center Research Fellow

Sanderson Farms, Inc. (Production Division) ("Sanderson Production"), a wholly-owned subsidiary of Sanderson Farms, Inc., a company engaged in the production, processing, marketing, and distribution of poultry, sought judicial review of a decision by the National Labor Relations Board ("NLRB") in which the NLRB found that live-haul and pull-up drivers employed by Sanderson Production were not "agricultural labors" and therefore exempted from the scope and protection of the National Labor Relations Act, 29 U.S.C. §§ 151-169 ("NLRA"). Sanderson Farms, Inc. v. Nat'l Labor Relations Bd., 335 F.3d 445 (5th Cir. 2003). The United States Court of Appeals for the Fifth Circuit affirmed the NLRB's decision and granted the NLRB's motion for an enforcement order. See id. at 453.

Sanderson Production purchased day-old pullet chicks and delivered them to farmers who had entered into independent contracts with Sanderson Production. The farmers grew the chicks to a certain age, and Sanderson Production monitored the progress of the chicks during that time. See id. Once the chicks reached the requisite age, Sanderson Production transported the birds to hen farms to produce hatching eggs. See id. Sanderson Production would then move the eggs to its hatchery, where it hatched out broiler chicks. See id.

The day-old broiler chicks were transferred to different independent contract farms, where they were raised for approximately seven weeks. See id. While at those farms, the farmers were required to raise the chicks in accordance with Sanderson Production's "Broiler Production Agreement." See id. Sanderson Production retained title to the broiler chicks, and its supervisors visited the contract farms at least twice a week to verify that the birds received adequate feed and were raised in accordance with Sanderson Production's requirements. See id.

Once the broiler chickens reached a certain weight, "Sanderson Production supervisors . . . instructed their live-haul drivers to pick up the chickens . . . [and] bring them to the live-haul shed next to, and on the same property as, Sanderson Farms, Inc. (Processing Division). . . ." Id. When the drivers reported to the independent farms, other employees caught the chickens and loaded them onto the trucks. See id. Aside from occasionally cooling the birds down with water hoses during hot weather, the drivers had no involvement with catching or loading the birds onto the trucks. See id. Once the live-haul drivers returned to the live-haul shed, "the chickens .. . [were] held there until the pull-up drivers . . . [took] them to the processing facility for slaughter." Id. The live-haul and pull-up drivers received their paychecks from Sanderson Farms, Inc., the parent company. See id.

The United Food and Commercial Workers Union, Local 1529, ("Union") "sought an election to become the exclusive bargaining representative for all live-haul and pull-up drivers employed at . . . [Sanderson Production.]" See id. Sanderson Production asserted at the representation proceeding that the drivers were "agricultural laborers" under the NLRA and therefore did not have the right to bargain through a union. See id. The NLRB Regional Director ("Director") ordered an election after determining that Sanderson Production was not a "farmer," and that its drivers were not "agricultural laborers" under the NLRA. See id. at 447-48. The NLRB affirmed the Director's determination that Sanderson Production was not a "farmer." See id.

The live-haul and pick-up drivers elected the Union as their exclusive bargaining representative. See id. After Sanderson Production refused to bargain with the Union, the Union filed a complaint with the NLRB. See id. The NLRB ordered Sanderson Production to bargain with the Union, and Sanderson sought judicial review of the NLRB's order. See id. at 453.

The court recognized that "[i]t is the NLRB's 'special duty' to apply the [NLRA's] exemption for agricultural laborers to varying fact patterns" and that in doing so the NLRB "is charged with construing the [NLRA]- including its incorporation of the term 'agricultural laborer' as used in the Fair Labor Standards Act- liberally in favor of the workers for whose protection those laws were designed." Id. at 448. (quoting NLRB v. Cal-Maine Farms, Inc., 998 F.2d 1336, 1339 (5th Cir. 1993)). See 29 U.S.C. §§ 201-219 (Fair Labor Standards Act). Noting that the NLRB engaged in expert construction of the agricultural laborer exemption, the court stated that NLRB determinations were entitled to deference on review. See id. It added that to reverse a NLRB decision, it "must decide that the plain meaning of the statute unambiguously contradicts the Board's interpretation or that it is inconsistent with prior . . . [NLRB] holdings." Id. (citation omitted).

The court explained that "[t]he protections of the NLRA, including the right to bargain through a union, extend only to 'employees;'" and that "this term, as defined by the . . . [NLRA] excludes 'any individual employed as an agricultural laborer.'" Id. (quoting 29 U.S.C. § 152(3)). See id. at 449. It added that although the NLRA "contains no definition for 'agricultural laborer,'. . . Congress has long provided that the term derives its meaning from the definition of 'agriculture' supplied by § 3 of the Fair Labor Standards Act. . ." Id. See also id. at n.4. Specifically, the FLSA provides the following:

Agriculture includes farming in all its branches and among other things includes . . . the raising of livestock, bees, fur-bearing animals, or poultry, and any practices . . . performed by a farmer or on a farm as incident to or in conjunction with such farming operations, including preparation for market, delivery to storage or to market or to carriers for transportation to market.

Id. (quoting 29 U.S.C. § 203(f)).

The court explained that this definition "'includes farming in both a primary and secondary sense.'" Id. (quoting Bayside Enterprises, Inc. v. NLRB, 429 U.S. 298, 300(1977)). It also explained that "primary farming" includes the "'the cultivation, and tillage of the soil, dairying, the production, cultivation, growing, and harvesting of any agriculturall or horticultural commodities . . . [and] the raising of livestock, bees, fur-bearing animals, or poultry.'" Id. (quoting 29 U.S.C. § 203(f)). The court further explained that "secondary farming," "has a broader meaning, encompassing, . . . any practices . . . performed by a farmer or on a farm as an incident to or in conjunction with such farming operations, including preparation for market, delivery to storage or to market or to carriers for transportation to market." Id. (quoting Holly Farms Corp. v. NLRB, 517 U.S. 392, 397 (1996)).

The court recognized that although the raising of poultry fell within the definition of primary farming, the "'hauling [of] products to or from a farm is not primary farming'" and could only be considered secondary farming "'if it is work performed 'by a farmer or on a farm as an incident to or in conjunction with such farming operations. . . .''" Id. (citing Bayside, 429 U.S. at 300-01). The court also stated that in Bayside, the Court determined that a poultry producer's business "'may include both agricultural and nonagricultural activities.'" Id. (citing Bayside, 429 U.S. at 301). It concluded, therefore, that although an entity engaged in the business of raising poultry could fall within the definition of a farmer with respect to some of its operations, that status did not automatically apply to all of its operations. See id.

Sanderson Production argued that it was a farmer engaged in primary farming because it was engaged in the business of raising poultry. See id. It also asserted that "its drivers are employed to assist in the raising of poultry, and thus are engaged in secondary farming activities in conjunction with Sanderson Production's primary farming operations, including 'delivery to storage or to market.'" Id. at 449-50.

The court rejected Sanderson Production's assertion that it was engaged in primary farming, noting that the Supreme Court has affirmed the NLRB's consistent determination that '"when an employer contracts with independent growers for the care and feeding of an employer's chicks, the employer's status as a farmer engaged in raising poultry ends with respect to those chicks.'" Id. (quoting Bayside, 429 U.S. at 302) (quoting In re Imco Poultry, 202 N.L.R.B. 259, 260 (1973)). The court stated that the NLRB had characterized the activities of employees of poultry producers who handled and transported chicks on independent farms as engaged "'in nonfarming operations which are incident to, or in conjunction with, a separate and distinct business activity of the [poultry producer], i.e., shipping and marketing.'" Id. (quoting Imco Poultry, 202 N.L.R.B. at 260-61) (quoting In re Norton & McElroy, 133 N.L.R.B. 104, 107 (1961)).

The court explained that "Bayside concerned the status of drivers that transported poultry feed from the producer's feedmill to numerous independent contract farms" and that although the producer in Bayside controlled virtually every aspect of the raising of its chicks by the independent contract farmers, the Court held that the independent farmers' farming activity could not be attributed to the poultry producer. See id. (citing Bayside, 429 U.S. at 302). The court also explained that in Holly Farms, the Court held that "when live-haul drivers 'arrive on the independent farms to collect broilers for carriage to slaughter and processing, Holly Farms does not resume its status as 'farmer' with respect to those birds, the status Holly Farms had weeks before, when the birds were hatched in its hatcheries.'" Id. (quoting Holly Farms, 517 U.S. at 400).

The court concluded that

[c]onsistent with the [NLRB's] decisions affirmed by the Supreme Court, Sanderson Production is not a farmer when it sends its live-haul drivers to retrieve chickens from independent farms and take them to slaughter. The drivers also cannot derive their status from the work of the independent farms, because these farms do not employ the drivers. Sanderson Production does not appear to argue that the live-haul drivers and pull-up drivers work "on a farm" for purposes of the FLSA definition of agriculture. Therefore, the . . . [NLRB's] decision that the truck drivers are not agricultural laborers engaged in secondary farming is reasonable and is supported by substantial evidence.

Id. at 450-51 (citations omitted).

The court therefore denied Sanderson Production's motion for review of the NLRB's decision and granted the NLRB's motion for an enforcement order. See id.

The case was decided on July 3, 2003; this summary was posted Dec. 10, 2003