Summary of a Recent
Judicial Development in
Labor

Temporary Alien Workers Entitled to Reimbursement for
Costs Incurred to Enter the United States

Walt McCarter
National AgLaw Center Research Associate

Summary of Decision

In De Leon-Granados v. Eller and Sons Trees, Inc., 581 F. Supp. 2d 1295 (N.D. Ga. 2008), the United States District Court for the Northern District of Georgia held that temporary alien, nonimmigrant employees were entitled to reimbursement for passport, travel, and Visa expenses incurred to gain entry to the United States, because the expenses were incurred for the primary benefit of the employer, were "an incident of and necessary to the employment," and were costs that the workers would not have otherwise incurred otherwise.

Background

Workers filed a class action suit under the Fair Labor Standards Act (FLSA) and the Migrant and Seasonal Agricultural Worker Protection Act (AWPA) against their employer Eller and Sons, a business that provided reforestation and forestry services, for reimbursement of several expenses including travel expenses to enter the country and costs related to obtaining their visas. Id. at 1300. Defendants obtained their employees through the H-2B visa program, which allows the legal, temporary or seasonal employment of alien, nonimmigrant employees. Id.

Arguments

Plaintiffs argued that they were entitled to reimbursement of transportation and visa expenses, because the expenses were incurred for the primary benefit or convenience of the defendants. Id. at 1308.

Defendants argued that: (1) the FLSA did not apply to alleged violations committed in foreign countries; (2) reimbursement of visa expenses and costs incurred for travel from the home country to the United States was not required for H-2B workers; (3) their reliance on Department of Labor regulations and written material provided an absolute defense to the FLSA claim; and (4) the action was barred by a two-year statute of limitations because they did not "willfully" violate the FLSA. Id. at 1307-08.

Analysis and Holdings

The court first determined that both Eller and Sons and its company president were joint "employers" for purposes of the FLSA and the AWPA. Id. at 1303-04. The court then explained that under the FLSA, "an employer may not deduct from employee wages costs incurred primarily for the employer's benefit if the deductions drive wages below the minimum wage." Id. at 1308. The Eleventh Circuit had previously held that, under the FLSA, transportation and visa expenses such as those incurred by the plaintiffs must be reimbursed by an employer, as they are "an incident of and necessary to the employment" and were not costs that they would have incurred otherwise in the course of ordinary life. Id. at 1308-09. The court found that precedent to be highly persuasive, and thus held that the defendants were liable for visa, passport, and travel costs. Id. at 1309-13. The court further agreed with the plaintiffs that the FLSA violations that gave rise to their claim occurred within the United States. Id. at 1310.

Regarding the statute of limitations issue, the court explained that the FLSA usually provides a two-year limitations period, but allows for a three-year period in case of a "willful" violation, meaning that the employer "either knew or showed reckless disregard for the matter of whether its conduct was prohibited by the FLSA." Id. at 1313-14. There was evidence that the defendants were on notice that they were likely violating the FLSA, so this action was not barred by the two-year limitations period. Id. at 1314. The court also examined a letter from the Department of Labor that the defendants claimed provided them an absolute defense against the FLSA claim, but the court determined that it did not indemnify the defendants, because it only notified them that the Department took a non-enforcement position on the issue and expressly warned against taking that position as proof of compliance. Id. at 1314-15. The court concluded that the defendants knew of the FLSA's reimbursement requirements and "plainly acted in knowing and reckless disregard of the provisions of the FLSA," and as a result the plaintiffs had suffered damages were entitled to summary judgment on their FLSA claim. Id. at 1315. The court also held that the plaintiffs were entitled to liquidated damages because the defendants were unable to show that they acted in good faith or with objective reasonableness. Id. at 1315-16. Lastly, the court concluded that the plaintiffs were entitled to summary judgment on their AWPA claim for the same reasons, stating that the defendants' failure to comply with the FLSA constituted both a failure to pay wages under 29 U.S.C. § 1822(a) and a violation of the working arrangement under 29 U.S.C. § 1822(c). Id. at 1320.

The case was decided on October 7, 2008.