LUIS MORALES-GARCIA, ET AL V. BETTER PRODUCE, INC., ET AL, No. 22-55119 (9th Cir. 2023)
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Appellants are agricultural workers hired by strawberry growers (“the Growers”) to pick the fruit that was then turned over to the Appellees Red Blossom Sales, Inc. and Better Produce, Inc. (“the Marketers”) for distribution. Appellants sought to hold the Marketers liable for their wages as “client employers.” The Marketers cooled and sold the berries principally to large retail grocery chains. The Marketers conducted their cooling and distribution operations on premises that were close to but separate from the farms. The Growers stopped paying Appellants and later filed for bankruptcy. Appellants sued the Growers and the Marketers as joint employers under California and federal law. Appellants also sued the Marketers as client employers under California Labor Code Section 2810.3. The district court ruled for the Marketers on all theories. Appellants appeal only with respect to the Marketers’ liability under Section 2810.3.
The Ninth Circuit affirmed. The panel held that Appellants were not performing labor within the Marketers’ “usual course of business” as defined by the statute. That term is defined as “the regular and customary work of a business, performed within or upon the premises or worksite of the client employer.” Given the particular facts of this case, the court concluded that Appellants’ work took place on the farms where the strawberries were grown, not on the premises or worksites of the Marketers. The Marketers are, therefore, not liable as client employers under California Labor Code Section 2810.3.
Court Description: California Labor Code The panel affirmed the district court’s ruling in favor of defendants Red Blossom Sales, Inc. and Better Produce, Inc., after a bench trial, in a case that concerns the application of a California labor law enacted to protect workers whose labor has been outsourced to a labor provider.
Under the statute, Cal. Labor Code § 2810.3(a)(1)-(3), (6), the outsourcing entity, known as a “client employer,” is liable for the laborers’ wages if the laborers’ work is within the outsourcers’ “usual course of business.” In this case, the plaintiffs are agricultural workers hired by strawberry growers (“the Growers”) to pick the fruit that was then turned over to Red Blossom and Better Produce (“the Marketers”) for distribution.
The plaintiffs sought to hold the Marketers liable for their wages as “client employers.” The Marketers cooled and sold the berries principally to large retail grocery chains. The Marketers conducted their cooling and distribution operations on premises that were close to but separate from the farms. In 2018, the Growers stopped paying the plaintiffs and later filed for bankruptcy. The plaintiffs sued the Growers and the Marketers as joint employers under California and federal law. The plaintiffs also sued the Marketers as client employers under California Labor Code § 2810.3. The district court ruled for the Marketers on all theories. The plaintiffs appealed only with respect to the Marketers’ liability under § 2810.3.
The panel held that the plaintiffs were not performing labor within the Marketers’ “usual course of business” as defined by the statute. That term is defined as “the regular and customary work of a business, performed within or upon the premises or worksite of the client employer.” The panel held that the district court correctly ruled that by requiring the work to take place on the premises of the client employer, the legislature required that a client employer exercise some element of control over the place where the laborers work. Given the particular facts of this case, the panel concluded that the plaintiffs’ work took place on the farms where the strawberries were grown, not on the premises or worksites of the Marketers, and that the Marketers are therefore not liable as client employers under § 2810.3.
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