Business Law

Business Law News ISSUE 3, 2023

IT’S BERRY HARD TO BELIEVE, BUT GROWERS AND MARKETERS MAY NOT BE JOINTLY LIABLE FOR LABORERS’ WAGES, EVEN IN CALIFORNIA

Written by June Monroe*

On June 1, 2023, the Ninth Circuit Court of Appeals in Morales-Garcia v. Better Produce, Inc.01 affirmed the Central District of California’s ruling in favor of two strawberry marketers holding that the marketers were not "client employers" liable for laborers’ unpaid wages despite the fact that the farmworkers were working on the marketers’ farmlands, which were subleased to the growers.

FACTUAL BACKGROUND

Plaintiffs and appellants were farmworkers who harvested strawberries in 2016 and 2017 in Santa Barbara County, California. Appellants were hired by three farms that grew the strawberries: Higuera Farms, Inc., Big F Company, Inc., and La Cuesta Farming Company, Inc. (together, the "Growers"). The marketers of the strawberries, Better Produce, Inc. and Red Blossom Sales, Inc. (together, the "Marketers"), held master leases to the farmlands and subleased them to the Growers under yearly marketing and sublease agreements, which specified that the land would be used only to grow strawberries and that the Marketers retained the exclusive right to sell the strawberries to their retail customers. This sublease became one of the key issues in the court’s analysis.

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