Alfaro-Huitron v. Cervantes Agribusiness

Cervantes Agribusiness and Cervantes Enterprises, Inc. (collectively, Cervantes) (defendant) entered an outsourcing contract with WKI Outsourcing Solutions, LLC (WKI) (defendant), under which WKI agreed to provide Cervantes with temporary farm laborers. WKI promoted itself as a legal source of labor from Mexico through the United States’ H-2A work-visa program, which allows US employers to hire nonimmigrant foreign agricultural workers for temporary or seasonal work. To obtain H-2A certification from the United States Department of Labor, WKI promised that workers would be paid a wage higher than state or federal minimum wage and that qualified US workers would receive priority in hiring for open farm positions. When WKI posted the job openings, an unprecedented number of US workers expressed interest, and WKI filled all the open positions with US workers, including Esteban Alfaro-Huitron (collectively, the domestic workers) (plaintiffs). However, WKI subsequently allowed Cervantes to cancel its outsourcing contract based on WKI’s apparent belief that US employers would not want to pay the higher wage rate for US workers. Cervantes never provided work to the domestic workers. The domestic workers sued WKI, WKI’s president, and Cervantes, alleging breaches of their employment contracts based on Cervantes’s failure to employ them. The court granted summary judgment for Cervantes after finding that WKI was acting as an independent contractor, not Cervantes’s agent, when it recruited the domestic workers because Cervantes did not have the right to control WKI’s actions. The domestic workers appealed.