Académique Documents
Professionnel Documents
Culture Documents
2d 1166
25 Wage & Hour Cas. (BN 651, 94 Lab.Cas. P 34,195
Brothers, alleging that it had violated the FLSA by failing to pay overtime
wages to employees engaged in the process of preparing compost for growing
mushrooms and by failing to maintain records as required by the FLSA. Frezzo
contended that employees in its mushroom composting operation were exempt
from the FLSA's overtime pay requirements, pursuant to a statutory exemption
for employees employed in agriculture. 29 U.S.C. 213(b)(12) (Supp.1980).1
After a three day trial on January 19, 20 and 21, 1981, which included a tour of
Frezzo's operation, the parties reached a consent judgment regarding the
alleged record keeping violations. As to the overtime pay claim, the District
Court on June 12, 1981 concluded that the preparation of mushroom compost
was not agriculture within the meaning of the FLSA. The District Court based
this conclusion on its finding that preparation of mushroom compost is neither
cultivation or tillage of the soil; the production, cultivation, growing and
harvesting of an agricultural commodity; nor a practice incident to farming.
The District Court permanently enjoined Frezzo from violating the overtime
compensation provisions of the FLSA and directed it to pay $67,363.01 in back
wages and interest to its employees. On July 20, 1981 Frezzo appealed. We
affirm.
I.
3
greasiness, reduce the Ph level, retain nitrogen in the pile and to act as a
nutrient for the mushrooms. During the two weeks of the composting process,
the raw materials are biologically, physically and chemically changed into
Frezzo's product-mushroom compost. Frezzo sells ninety percent of the
compost it produces to other mushroom growers and retains ten percent for its
own use.
5
The sole issue before the court on this appeal is whether Frezzo's production of
mushroom compost constitutes agriculture within the meaning of the exemption
to the FLSA. If it does, then Frezzo's employees engaged in compost
production are not entitled to collect premium overtime pay.
II.
6
The FLSA broadly defines agriculture as including "farming in all its branches,"
which in turn includes the "cultivation and tillage of the soil, dairying, the
production, cultivation, growing and harvesting of any agricultural or
horticultural commodities ... and any practice performed by a farmer or on a
farm as an incident to or in conjunction with such farming operations...." 29
U.S.C. 203(f).2 This definition is divided into two parts: "primary"
agriculture, which includes all activities which are actually farming, and
"secondary" agriculture, which includes activities incident to or in conjunction
with the primary farming operation of a particular farmer. Farmers Reservoir &
Irrigation Co. v. McComb, 337 U.S. 755, 762-63, 766 n.15, 69 S.Ct. 1274,
1278, 1280, 93 L.Ed. 1672 (1949).
Frezzo contends that the District Court erred as a matter of law in concluding
that mushroom compost is neither soil nor an agricultural commodity and
therefore not primary agriculture.3 Attempting to draw an analogy between
traditional green crop farming and mushroom growing, Frezzo argues that
mushroom compost serves the same function as the earth in which crops are
grown, and just as plowing and preparing a seed bed is farming, so is the
preparation of mushroom compost. We reject this analogy and agree with the
District Court that, although mushroom growing is a type of farming, the
production of mushroom compost is a preliminary activity which manufactures
a product that is then used in farming.
A.
8
The District Court concluded that the proper inquiry in determining whether
preparation of mushroom compost fits within the statutory language of
"cultivation and tillage of the soil" is whether mushroom compost is itself soil.
10
We next consider Frezzo's claim that the district court erred in deciding that the
process of mushroom composting does not constitute the production,
cultivation, growing or harvesting of an agricultural commodity. There is no
dispute that the growing of mushrooms is the growing of an agricultural
commodity; what appellants challenge is the District Court's determination that
the term does not include mushroom compost.
12
13
14
15 bulking operation is a process which changes the natural state of the freshly
(T)he
cured tobacco as significantly as milling changes sugar cane. As indicated above,
the bulking process changes and improves the leaf in many ways and turns it into an
industrial product ... a process that results in such important changes is "more akin to
manufacturing than to agriculture."
16
17
Frezzo concedes that the only authority for its position that mushroom compost
is an agricultural commodity is two cases decided under different statutes. In
the first, Kaolin Mushroom Farms, Inc. v. United States, 1979-2 CCH Tax Cas.
P 9652 (E.D.Pa.1979), the District Court interpreted the agricultural exemption
in the Federal Insurance Contributions Act (FICA) of the Internal Revenue
Code. Under that exemption, employers are not required to withhold income
and social security taxes from employees working in agriculture. The definition
of agriculture requires that the work be on a farm and in connection with raising
any agricultural commodity. 26 U.S.C. 3121(g). The statutory definition of
farm includes "structures used primarily for the raising of agricultural
commodities." Id. The District Court in Kaolin Mushroom Farms decided that
mushroom composters could claim the exemption either because compost was
itself an agricultural commodity or because composting activity is carried out in
connection with the mushroom growing process. Frezzo also relies on a
decision by the Supreme Court of Pennsylvania, Gaspari v. Township of
Muhlenberg, 392 Pa. 7, 139 A.2d 544 (1958), which held that for purposes of a
local zoning ordinance, production of mushroom compost was not
manufacturing, but was "farming in all its branches." In that zoning ordinance,
"farming in all its branches" was defined as including the erection of accessory
farm buildings and marketing or processing of farm products where incidental
to raising those products. Composting was, under the definition, declared to be
a part of farming.4
18
20
21
Thus,
the question as to whether a particular type of activity is agricultural is not
determined by the necessity of the activity to agriculture nor by the physical
similarity of the activity to that done by farmers in other situations. The question is
whether the activity in the particular case is carried on as part of the agricultural
function or is separately organized as an independent productive activity.
22
Id. at 761, 69 S.Ct. at 1278. See also, Wirtz v. Ti Ti Peat Humus Co., 373 F.2d
209, 213 (4th Cir.), cert. denied, 389 U.S. 834, 88 S.Ct. 37, 19 L.Ed.2d 94
(1967); McComb v. Super-A Fertilizer Works, 165 F.2d 824, 828 (1st Cir.
1948). The Labor Department's regulations describe "farming in all its
branches" as including "all activities, whether listed in the definition or not,
which constitute farming or a branch thereof under the facts and
circumstances." 29 C.F.R. 780.107. The regulations further state that, in
making the determination whether an activity is farming.
29 C.F.R. 780.109. Frezzo does not argue that the Labor Department's
interpretation of the statute in its regulation is incorrect; rather, it urges that,
under the regulations, the "preparation of mushroom compost constitutes
agriculture under the facts and circumstances of mushroom farming as a unique
branch of farming." (Appellants Brief at 33). We disagree, and find that
The facts as found by the District Court and not disputed here reveal that there
is a clear and complete division between Frezzo's composting and growing
operations. At trial, Frezzo stipulated that none of the employees engaged in
preparation of compost worked inside the mushroom houses in any respect with
regard to the planting, growing or harvesting of mushrooms. 34a-35a. The
District Court found that the employees whose activities are at issue drive
trucks and operate heavy machinery for shoveling, mixing, watering and
aerating the compost and ultimately deliver 90% of it to other mushroom
growers in the same and other communities. 430a-431a. Frezzo also stipulated
that none of its employees who work inside the mushroom houses operated
front end loaders or other equipment involved in the composting operation. 36a.
Thus, Frezzo employs two distinct groups of employees who engage in
different activities. The fact that all these employees are employed by a single
corporation and that some activities of that corporation are exempt is irrelevant.
E.g., Maneja v. Waialua Agricultural Co., 349 U.S. 254, 75 S.Ct. 719, 99 L.Ed.
1040 (1955)5 ; Brennan v. Six Flags Over Georgia, Ltd., 474 F.2d 18 (5th Cir.),
cert. denied, 414 U.S. 827, 94 S.Ct. 47, 38 L.Ed.2d 61 (1973); Calaf v.
Gongalez, 127 F.2d 934, 937-38 (1st Cir. 1942).
26
27 exemption was meant to embrace the whole field of agriculture, and sponsors of
The
the legislation so stated, 81 Cong.Rec. 7648, 7658. This Court also has had occasion
to comment on its broad coverage. See Addison v. Holly Hill Co., 322 U.S. 607, 612
(64 S.Ct. 1215, 1218, 88 L.Ed. 1488) (1944). Nevertheless, no matter how broad the
exemption, it was meant to apply only to agriculture and we are left with the
problem of what is and what is not properly included within that term.
28
Maneja v. Waialua Agricultural Co., supra, 349 U.S. at 260, 75 S.Ct. at 723.
Under the FLSA, the employer bears the burden of demonstrating that an
exemption applies. Walling v. General Industries, Inc., 330 U.S. 545, 547-48,
67 S.Ct. 883, 883-84, 91 L.Ed. 1088 (1947); Usery v. Associated Drugs, Inc.,
538 F.2d 1191, 1194 (5th Cir. 1976). We find that Frezzo did not carry that
burden. Accordingly, the decision of the District Court will be affirmed.
EDWARD R. BECKER, Circuit Judge, dissenting:
29
30
31
32
(1) Compost is prepared solely from organic and agricultural products (horse
manure, hay, corncobs, chicken manure, and cocoa bean hulls).2
33
(2) These raw materials are converted into compost entirely by natural
microbiological forces. Adequate oxygen, moisture, and temperature levels in
the compost pile are controlled, not by gauges or other scientific paraphernalia,
but by the human eye, in a technique no more sophisticated than others used in
the art of traditional farming.
34
(3) Compost is and always has been the exclusive seed bed and growing
medium for commercial mushrooms. Because mushrooms do not manufacture
food and energy from photosynthesis, their growth depends wholly upon the
nutrients contained in compost. The cultivation and tillage of compost consists
of the same principal components (aeration and watering) as the tillage and
cultivation of soil for green crops. Compost, at least in the context of
mushroom farming, is thus the functional equivalent of soil itself.
35
(4) Mushroom composting takes place outdoors on what looks like a farm,
located in the midst of farming country.
36
37
38
39
39
40
In the alternative, the undisputed facts set forth above make it clear that the
preparation of mushroom compost is part of "farming in all its branches."
Indeed, given the unique features of mushroom cultivation, appellants'
composting is inextricably intertwined both temporally and geographically with
their mushroom growing, which the Secretary of Labor concedes is agricultural.
The majority acknowledges that mushroom composting is necessary to
appellants' mushroom farming yet removes the process from the sphere of
"farming in all its branches" because it is separately organized. With all respect,
reliance on this criterion is inapposite. The Supreme Court has used the concept
of a "separately organized and independent productive activity" to disallow the
agricultural exemption for operations claimed to be within the statutory
definition of a practice incident to farming.5 But appellants do not here assert
this secondary meaning of agriculture, and the organizational test should not be
invoked to defeat the uncontradicted factual evidence that mushroom
composting is agriculture within the primary definition of "farming in all its
branches."6 In sum, to conclude that composting is not part of farming because
it is separate from another farming operation of the same owners simply begs
the question.
41
43
Our construction of the Act should also be informed by the recognition that
Congress has exempted agricultural enterprises from numerous statutes7 to
blunt the potentially onerous impact of its regulatory power on what were
perceived in 1938 to be (and what today may well be) marginal enterprises
whose survival Congress understandably thought was important to American
life. While I sympathize with the urge to narrow the literal scope of this
exemption and expand FLSA coverage for the benefit of appellants' employees,
that motive ignores the tension between the Act's benefits and the desire of the
75th Congress not to burden any form of agriculture with this economic
legislation.
44
Appellants also rely on this court's decision in United States v. Frezzo Brothers,
Inc., 642 F.2d 59 (3d Cir. 1981), which reversed the denial of post-conviction
relief from Frezzo's conviction for discharging pollutants into navigable waters
In Maneja v. Waialua Agricultural Co., the Supreme Court decided that the
agricultural exemption did not apply to sugar cane processing. Frezzo attempts
to distinguish mushroom composting from sugar cane processing by pointing
out that composting is a "pre-harvest function" while cane processing occurs
"post-harvest." (Appellant's Brief at 47). The Maneja opinion does not discuss
the timing of the processing operation at issue there as a factor in its decision
that the agricultural exemption did not apply and we fail to see its relevance to
our decision in this case
I note that the district court did not go so far as to suggest the manufacturing
analogy, concluding only that compost is not an agricultural commodity
because it is not a product of soil. However, even this finding ignores the
broader definition of agricultural commodity quoted above. I agree with
appellants that this definition embraces more than "products of soil" because
mushrooms themselves, conceded to be agricultural commodities, are products
of compost, not soil
Holding that workers who carry sugar cane from the fields by railroad were
within the definition of agriculture, the Court reasoned that, if farm laborers
who carried the cane in wheelbarrows would be exempt, so, too, should these
In Farmers Reservoir & Irrigation Co. v. McComb, 337 U.S. 755, 69 S.Ct.
1274, 93 L.Ed. 1672 (1949), the Court denied the exemption on this basis to an
irrigation company divorced from the farming operation whose functions were
performed neither on a farm nor by a farmer. The same criterion precluded the
agricultural exemption in Maneja v. Waialua Agricultural Company, Ltd.,
supra, with respect to work performed in a sugar processing plant located on a
sugarcane farm, and in Mitchell v. Budd, 350 U.S. 473, 76 S.Ct. 527, 100 L.Ed.
565 (1956), with respect to the "bulking" of tobacco leaves after harvest