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Farm Worker on Temporary Visa Need Not Arbitrate Wage Claims (1)

Oct. 30, 2019, 7:27 PMUpdated: Oct. 30, 2019, 8:12 PM

A Mexican farm worker on a temporary work visa can’t be made to arbitrate his wage and hour claims because the arbitration agreement he signed was done so under duress, a federal judge in California ruled.

Dario Martinez-Gonzalez alleges that he was underpaid, not provided adequate meal or rest breaks, and given food that was unsafe to eat while working for farm labor contractor Elkhorn Packing Co. and grower D’Arrigo Bros. Co. during the 2016 and 2017 lettuce seasons. Elkhorn argued that he needed to arbitrate those claims, based on an arbitration agreement he signed in both years.

But the evidence presented at a bench trial showed that Martinez-Gonzalez was one of hundreds of Elkhorn employees who were asked to sign the agreement—along with other paperwork—while standing in a hotel parking lot after working all day in the fields, Judge Edward M. Chen of the U.S. District Court for the Northern District of California said in an Oct. 29 decision.

The agreement wasn’t presented ahead of time for review, and Martinez-Gonzalez only was asked to sign after he had started working and was told that he must follow his employer’s rules or risk getting sent back to Mexico, Chen said.

“With significant financial obligations animating his thinking, no reasonable worker in Mr. Martinez Gonzalez’s shoes—without alternative employment prospects, an alternative place to live should he lose his job, and no practical way to return to Mexico—could have refused to sign the Arbitration Agreements that were presented to him without any representation by Elkhorn that signing the Arbitration Agreement was optional,” he wrote.

New California Law Coming

The ruling comes shortly after California Gov. Gavin Newsom (D) signed a new state law that bans employers from requiring job applicants and employees to sign a mandatory arbitration agreement as a condition of employment. The law goes into effect Jan. 1.

A study from the left-leaning Economic Policy Institute found that around two-thirds of employers in California rely on mandatory arbitration agreements, compared with 54% nationwide.

Chen’s decision also departs from a line of U.S. Supreme Court cases that have interpreted the Federal Arbitration Act broadly to allow enforcement of arbitration agreements, even where state law might otherwise invalidate them.

But foreign nationals on H-2A agricultural guestworker visas can be in a particularly vulnerable position because the visa requires that they work only for the company that sponsored them. Employers participating in the visa program also must provide housing and transportation for the visa workers.

Primary Breadwinner

In Martinez-Gonzalez’s case, that meant he reasonably believed that if he didn’t sign the arbitration agreement, he would be left without a job, nowhere to live in the U.S., and no way to get back to his native Mexico, the court said. Martinez-Gonzalez also was his family’s primary breadwinner and was earning as much as five times in the U.S. what he could earn for similar work in Mexico.

Those considerations were compounded by the conditions under which he and his co-workers were asked to sign the agreements, the court said.

As such, the agreement was both the product of economic duress and undue influence, and couldn’t be enforced, it said.

“Where hundreds of workers are lined up in a parking lot and told by their supervisors to sign documents they have no opportunity to read, a contract is not being formed in any real sense of the word,” said Karla Gilbride, an attorney with Public Justice in Washington, who represented Martinez-Gonzalez. “We’re gratified that the court recognized the legal significance of this coercive power imbalance,” she said in a statement.

Representatives for Elkhorn and D’Arrigo Bros. didn’t immediately respond to requests for comment.

California Rural Legal Assistance also represented Martinez-Gonzalez. Tyson & Mendes represented Elkhorn. The Law Offices of Geoffrey F. Gega represented D’Arrigo Bros.

The case is Martinez-Gonzalez v. Elkhorn Packing Co., 2019 BL 415054, N.D. Cal., No. 3:18-cv-05226, 10/29/19.

To contact the reporter on this story: Laura D. Francis in Washington at lfrancis@bloomberglaw.com

To contact the editors responsible for this story: Martha Mueller Neff at mmuellerneff@bloomberglaw.com; Terence Hyland at thyland@bloomberglaw.com