Farms across the United States use seasonal foreign workers to harvest crops and often turn to recruiters—who are notorious for charging foreign workers extortionate fees to secure them jobs in this country. The Labor Department regulations governing the seasonal guest-worker program require employers to contractually forbid their recruiters from charging those fees.  But in the real world, recruiters continue to charge fees in foreign jurisdiction, and employers look the other way, leaving workers with few places to turn. Following the recent U.S. Court of Appeals for the Eleventh Circuit decision in Palma-Ulloa v. Fancy Farms, No. 18-10536 (11th Cir. 2019) farm worker advocates have a new tool in their tool kits to assist guest workers.

On Palma-Ulloa, the Eleventh Circuit ruled that the district court wrongfully dismissed breach of contract claims against the farm employer for fees charged to guest workers by the farm's recruiter. The lower court found that while the H2A application was a contract, and Fancy Farms, the employer breached that contract, that the workers had not presented evidence that their employer's breach—failing to contractually prohibit recruitment fees—actually caused any damage to the workers. In reversing the district court, not only did the Eleventh Circuit find that there was some evidence that Fancy Farm's owner, Carl Grooms, knew that his recruiter had a history of charging illegal fees but also that the district court needed to consider the intent of the regulatory framework of the guest worker program. That framework was designed to shift some of the burden for preventing illegal and abusive practices to the employer, and not just the recruiter. As a result, the Eleventh Circuit concluded that Fancy Farm's failure to comply with a regulation that requires them to ban recruitment fees from any recruiter the employer hires could naturally lead to the foreseeable payment of recruitment fees by the workers.

That means Fancy Farms and other similar companies can be held responsible when recruiters charge vulnerable workers exorbitant fees, if they have not contractually forbidden their recruiters from charging fees. That's significant, because foreign recruiters are notoriously difficult to find and hold to account and the court found that Fancy Farms did not perform the due diligence expected of them to protect their seasonal employees from predatory fees. The recruiter at issue in the Fancy Farms case, as one just example, fled the country and continue to elude authorities.

From California to Florida and Alaska to Texas, agricultural companies may be affected by this ruling—and held accountable if their vulnerable guest workers are exploited by foreign recruiters and the employers sponsoring the workers have done nothing to prevent it.

Jennifer Recine is a partner with Stroock & Stroock & Lavan in New York. She argued the Palma-Ulloa v. Fancy Farms case in the U.S. Court of Appeals for the Eleventh Circuit, representing the migrant workers pro bono.