Unlisted Farming Activity under the FLSA's Agricultural Exemption Explained: Sixth Circuit | Practical Law

Unlisted Farming Activity under the FLSA's Agricultural Exemption Explained: Sixth Circuit | Practical Law

In Barks v. Silver Bait, LLC, the US Court of Appeals for the Sixth Circuit held that the Fair Labor Standards Act's (FLSA) agricultural exemption applied to employees who worked on a worm farm, an unlisted farming activity. 

Unlisted Farming Activity under the FLSA's Agricultural Exemption Explained: Sixth Circuit

by Practical Law Labor & Employment
Published on 07 Oct 2015 • USA (National/Federal)
In Barks v. Silver Bait, LLC, the US Court of Appeals for the Sixth Circuit held that the Fair Labor Standards Act's (FLSA) agricultural exemption applied to employees who worked on a worm farm, an unlisted farming activity.
On October 2, 2015, in Barks v. Silver Bait, LLC, the US Court of Appeals for the Sixth Circuit held that the FLSA's agricultural exemption covers the growing and raising of bait worms on a worm farm, an activity not expressly listed in the FLSA's agriculture definition. The court found that worm farming fell within the FLSA's agriculture definition as including "farming in all its branches." The court affirmed a district court's declaratory judgment in favor of the worm farm owner. (No. 15-5175, (6th Cir. Oct. 2, 2015).)

Background

Silver Bait, LLC is engaged in housing, growing and packaging bait worms for sale directly to retailers. Silver Bait employees load worms onto empty trays and feed them about three times a week with corn-based feed grown on Silver Bait's property. The workers prepare the feed mixture by grinding the corn and adding other ingredients, like water, and then pour the feed over the worms. When the worms reach the appropriate size for bait, the employees harvest them using machines that sift the trays and sort the worms by size. The employees then package the worms in Silver Bait's custom packaging, label them and load them onto pallets for delivery directly to retailers.
Silver Bait classified the employees as exempt under the FLSA's agricultural exemption and did not pay them overtime compensation. In 2009, the US DOL opened an investigation and concluded that the exempt classification was appropriate because the employees:
  • Worked on a farm solely for the farmer.
  • Were employed as seasonal workers to cultivate, grow and harvest agricultural or horticultural commodities.
Thirteen of Silver Bait's employees sued for unpaid overtime pay. After a bench trial, the federal district court found that the agricultural exemption applied and issued a declaratory judgment in Silver Bait's favor. Silver Bait's employees appealed.

Outcome

The Sixth Circuit affirmed, holding that the FLSA's agricultural exemption covers the growing and raising of bait worms on a worm farm, even though that activity was not expressly listed in the statutory definition of agriculture.
The Sixth Circuit noted that:
  • Employees who are "employed in agriculture" are exempt under the FLSA (29 U.S.C. § 213(b)(12)).
  • The FLSA defines "agriculture" as involving "farming in all its branches" (understood as primary agriculture), including:
    • cultivation and tillage of the soil;
    • dairying;
    • production, cultivation, growing and harvesting of any agricultural or horticultural commodities; and
    • raising livestock, bees, fur-bearing animals or poultry.
    (29 U.S.C. § 203(f).)
  • The DOL's interpretive guidance on the FLSA's definition of agriculture was not presented as rulemaking and therefore is only treated by courts as persuasive (29 C.F.R. § 780.5; Atrium Med. Ctr. v. U.S. Dep’t of Health & Human Servs., 766 F.3d 560, 573 (6th Cir. 2014)).
  • Dictionary definitions of farming and agriculture are instructive but not conclusive in deciding whether the agricultural exemption covered worm farming.
The Sixth Circuit found that although worm farming did not fit within any of the statutory examples accompanying "farming in all its branches," worm farming still constituted "farming in all its branches" because:
  • The FLSA sought to include the entire field of farming within the meaning of agriculture.
  • The FLSA's definition of agriculture:
    • is not restricted to traditional farming;
    • encompasses a modern, evolving view of agriculture; and
    • is flexible enough to include animals that were not considered when the FLSA was enacted.
  • Silver Bait's operations resemble traditional farms and raising and growing bait worms is similar to traditional farming because both involve raising animals for sale as a commodity.
  • Bait worms have an "agricultural character" even though they are not used as food for human beings.
  • Bait worms are similar to working with other types of animals courts or DOL regulations have concluded are covered by the agricultural exemption, including:
    • race horses;
    • cattle raised to obtain serum or virus; and
    • animals raised on a farm used only for experimental purposes in connection with the employer's factory.
    (Marshall v. Thiele, No. 76-38, (M.D. Pa. Nov. 7, 1978); 29 C.F.R. § 780.106; 29 C.F.R. § 780.119.)

Practical Implications

The Sixth Circuit's analysis of unlisted farming activities under the FLSA's agricultural exemption may assist employers engaged in other non-traditional farming activities in understanding the exemption. In addition, the court's broad view of the scope of the agricultural exemption can provide those employers with a stronger basis for treating their employees as exempt.