Summary of a Recent
Judicial Development in
Cooperatives

A Cooperative Engaged in Agriculture Falls Within FLSA
Agriculture Exemption to Overtime Requirements

John Stacks
National AgLaw Center Research Associate

Summary of Decision

In Sariol v. Florida Crystals Corporation, 490 F. 3d 1277 (11th Cir. 2007), the United States Court of Appeals for the Eleventh Circuit affirmed the United States District Court for the Southern District of Florida's grant of summary judgment for the cooperative and related entities.

Background

Defendant Sugar Farms Co-op operated as an agricultural cooperative organized under Florida law and was owned by various entities that paid it to carry on farming operations. Id. at 1278. It engaged only in farming operations and did not engage in marketing, processing, or milling of its products. Id. Sugar Farms used independent contractors to supplement the work of its 220 to 300 employees. Id. Plaintiff Armando Sariol was an employee of Sugar Farms who delivered fuel for farm machinery and maintaining farm equipment to independent contractors working for Sugar Farms, and all of his duties were part of the operations at Sugar Farms. Id.

Sariol filed suit against Sugar Farms as well as Florida Crystals Corporation and Florida Crystals Food Corporation, who were allegedly joint employers of Sariol. Id. He claimed that the defendants violated the Fair Labor Standards Act (FLSA) by failing to pay overtime. Id. The defendants filed motions for summary judgment asserting that the agriculture exemption of the FLSA precluded payment for overtime. Id. The magistrate judge granted the defendants' motions for summary judgment, and Sariol appealed. Id.

Arguments

Sariol argued that "the portion of his time spent delivering fuel to independent contractors [was] related to the 'farming activities of others' and therefore not exempt" from the FLSA under the "secondary agriculture" exemption. Id. at 1280. He also argued that "Sugar Farms Co-op [could not] qualify as a 'farmer' under the exemption definition because it [was] a cooperative association." Id. at 1281.

Analysis and Holdings

Sariol's duties found clearly to be "secondary agriculture" because delivery of fuel to farm machinery and equipment was not only incidental to farming, but absolutely necessary. Id. at 1280. The "secondary agriculture" exception requires that "work must be performed either by a farmer or on a farm, and that it must be related to the operations of the very farm on which the employee works." Id. The court held that "the work of the [independent] contractors cannot be viewed as separate operations" and "the time Sariol spent delivering fuel to the contractors was covered by the exemption" because the independent contractors were controlled by Sugar Farms Co-op and because the Department of Labor's regulation explaining the agriculture exemption revealed that Congress intended independent contractors to be treated like other agricultural employees. Id. at 1281. The court also held that Sugar Farms Co-op qualified as a "farmer" under the exemption definition because one must look to the activities in which a cooperative is engaged; Sugar Farms Co-op was clearly engaged in agriculture so the exemption applied. Id. at 1282.

The case was decided on July 3, 2007.