Alfaro-Huitron v. WKI Outsourcing Solutions ( 2020 )

FILED
United States Court of Appeals
PUBLISH Tenth Circuit
UNITED STATES COURT OF APPEALS December 11, 2020
Christopher M. Wolpert
FOR THE TENTH CIRCUIT Clerk of Court
_________________________________
ESTEBAN ALFARO-HUITRON;
ELEAZAR GARCIA-MATA; JOSE
ANTONIO GARCIA-MATA; JUAN
GUZMAN; RAUL JASSO-CERDA;
ENRIQUE ROJAS-TORRES; LAZARO
ROJAS-TORRES; TRINIDAD
SANTOYO-GARCIA; PEDRO TAMEZ, No. 19-2091
Plaintiffs - Appellants,
v.
CERVANTES AGRIBUSINESS;
CERVANTES ENTERPRISES, INC.,
Defendants - Appellees.
_________________________________
Appeal from the United States District Court
for the District of New Mexico
(D.C. No. 2:15-CV-00210-GJF-JHR)
_________________________________
Jerome Wesevich, Texas RioGrande Legal Aid, El Paso, Texas (Chris Benoit, Texas
RioGrande Legal Aid, El Paso, Texas, on the briefs) for Plaintiffs-Appellants.
Joseph Cervantes, Las Cruces, New Mexico (L. Helen Bennett, P.C., Albuquerque, New
Mexico on the briefs) for Defendants-Appellees.
_________________________________
Before TYMKOVICH, Chief Judge, EBEL, and HARTZ, Circuit Judges.
_________________________________
HARTZ, Circuit Judge.
_________________________________
Plaintiffs–Appellants are United States citizens or lawful permanent residents who
work as farm laborers. Defendants–Appellees Cervantes Agribusiness and Cervantes
Enterprises, Inc. (collectively, Cervantes) are agricultural businesses owned and managed
by members of the Cervantes family in southern New Mexico. Plaintiffs brought claims
against Cervantes for breach of contract, civil conspiracy, and violations of the Migrant
and Seasonal Agricultural Worker Protection Act (AWPA), 29 U.S.C. §§ 1801–72, based
on Cervantes’s failure to employ them after a labor contractor, allegedly acting on
Cervantes’s behalf, recruited them under the H-2A work-visa program of the United
States Department of Labor (DOL). The district court granted summary judgment in
favor of Cervantes on all claims. Exercising jurisdiction under 28 U.S.C. § 1291, we
reverse the district court’s ruling on the breach-of-contract and AWPA claims because
the evidence taken in the light most favorable to Plaintiffs is sufficient to support a
finding that the contractor was acting as Cervantes’s agent when it recruited them. But
we affirm the summary judgment in favor of Cervantes on the conspiracy claim because
of the lack of evidence of an agreement between Cervantes and the contractor to engage
in unlawful acts.
I. BACKGROUND
A. Dealings Between the Parties
In September 2011 Dino Cervantes, managing vice president of Cervantes
Enterprises and general manager of Cervantes Agribusiness, signed a one-page
“Agreement of Outsourcing Support” with labor contractor WKI Outsourcing Solutions,
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LLC (WKI). Aplt. App., Vol. 1 at 67.1 The Agreement stated that it was “for services as a
work force provider. The work force consists of skilled farm labor workers; U.S. Citizens,
legal residents, or foreign workers with temporary working visas (H-2A).” Id. The
Agreement was to be “effective from [November 10, 2011] and ending [March 9, 2012],
for the following crops: Processing & Packing: Dry Red Chile & Other Spices”; and WKI
agreed to “provide 15 farm workers on a daily basis for the length of this agreement.” Id.Also in September, WKI entered into materially identical agreements with representatives
of three other farm operators and packing companies in southern New Mexico.
The president of WKI, Jaime Campos, had promoted his company to Cervantes
and other agricultural businesses as a legal source of foreign labor through the H-2A
work-visa program. He believed that farmers were suffering from a lack of reliable labor
in the United States and that the H-2A visa program could solve that problem by bringing
workers into the country from Mexico. One of the farmers who entered into an
agreement with WKI, Ronnie Franzoy, testified at his deposition that he wanted all his
labor to come from Mexico partly because he thought Mexican laborers were the most
1
The Agreement named Cervantes Agribusiness as the contractual party but provided
the address of Cervantes Enterprises. The district court “d[id] not decide whether both
Cervantes Defendants are parties to the agreement.” Alfaro-Huitron v. WKI Outsourcing
Solutions, LLC, No. CV 15-210 JCH/JHR, 2018 WL 522312, at *6 n.2 (D.N.M. Jan. 22,
2018). Instead it “consider[ed] this a fact over which there is a genuine dispute.” Id.The court thus stated that, for purposes of deciding the motion for summary judgment, it
would “view[] the evidence in the light most favorable to the Plaintiffs[] and . . . treat the
Agreement as including both Cervantes Defendants.” Id. We likewise treat the
Agreement as including both Cervantes Defendants. See Mata v. Saiz, 427 F.3d 745, 749
(10th Cir. 2005) (“We construe the factual record and the reasonable inferences
therefrom in the light most favorable to the nonmoving party.”).
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dependable. Mr. Cervantes was also interested in obtaining foreign workers: He testified
at his deposition that there would be no reason for him to use WKI’s services if WKI
were not bringing in foreign workers.
The H-2A visa program established by the Immigration and Nationality Act of
1952, as amended by the Immigration Reform and Control Act of 1986, allows domestic
employers to hire nonimmigrant foreign workers for agricultural labor on a temporary or
seasonal basis. See Mendoza v. Perez, 754 F.3d 1002, 1007 (D.C. Cir. 2014). To obtain
permission to hire workers under the program, an employer must establish that it faces a
shortage of qualified United States workers and that the employment of foreign labor will
not adversely affect the wages and working conditions of similarly employed United
States agricultural workers. See 8 U.S.C. §§ 1101(a)(15)(H)(ii)(a), 1188(a)(1). The
program is administered by the DOL, which has promulgated regulations for that
purpose. See 20 C.F.R. § 655.0; see also Mendoza, 754 F.3d at 1008 (summarizing
various DOL regulations). As we explained in Llacua v. Western Range Association, 930
F.3d 1161, 1169 (10th Cir. 2019), “The H-2A program allows for issuance of visas to
foreign workers to fill agricultural positions employers cannot fill through the domestic
labor market.” Because the DOL has a “statutory duty to protect American workers,” its
regulations require employers to “first offer the job to workers in the United States.” Id.(citing 20 C.F.R. § 655.121). “Furthermore, the employer must offer domestic workers
‘no less than the same benefits, wages, and working conditions that the employer is
offering, intends to offer, or will provide to H-2A workers.’” Id. at 1169–70 (quoting 20
C.F.R. § 655.122(a)). The DOL requires employers to offer at least the highest of the
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federal or state minimum wage, the prevailing hourly or piece rate, or the adverse-effect
wage rate (AEWR) that the DOL sets on a state-by-state basis. See 20 C.F.R. §§
655.120(a), 655.122(l); see also id. § 655.103(b) (defining AEWR). The AEWR is
calculated under a formula that is intended to ensure that foreign agricultural workers do
not undercut domestic wages or adversely affect working conditions of similarly situated
domestic employees. See N.C. Growers’ Ass’n, Inc. v. United Farm Workers, 702 F.3d
755, 759 (4th Cir. 2012).
When a labor contractor such as WKI seeks to bring foreign laborers into the
country through the H-2A visa program, it must submit, among other required
documents, “[c]opies of the fully-executed work contracts with each fixed-site
agricultural business” to which the contractor expects to provide H-2A workers. 20
C.F.R. § 655.132(b)(4). Dino Cervantes testified that he knew when he executed the
Agreement that WKI would use the Agreement as part of the H-2A application process
and that Cervantes would need to pay the AEWR to H-2A workers.
WKI applied for H-2A certification from the DOL in September 2011. As part of
this process Mr. Campos submitted under penalty of perjury an Application for
Temporary Employment Certification, see 20 C.F.R. § 655.130, which stated, among
other things, that to the best of his knowledge: (a) “[a]t this time, there are not sufficient
workers who are able, willing, or available at the time and place needed to perform the
farm labor and services required by . . . farmers [of certain seasonal crops],” Aplt. App.,
Vol. 3 at 477; (b) workers would be paid the AEWR wage of $9.71 per hour (more than
both New Mexico’s minimum hourly wage ($7.50) and the federal minimum hourly
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wage ($7.25) at the time); and (c) qualified United States workers would have priority in
hiring, in compliance with federal regulations on the subject, see, e.g., 20 C.F.R.
§§ 655.122(a), 655.135(c), 655.156(a). As attachments to the Application form, WKI
submitted a list of the anticipated worksites for the H-2A workers, as required by 20
C.F.R. § 655.132(b)(1), and the one-page Agreements of Outsourcing Support that it
entered into with growers such as Cervantes, as required by 20 C.F.R. § 655.132(b)(4).
WKI also submitted the required job order (commonly referred to as a “clearance order,”
see Arriaga v. Fla. Pac. Farms, L.L.C., 305 F.3d 1228, 1233 n.5 (11th Cir. 2002)), which
contained necessary information on the number of workers required, the anticipated work
to be performed, the worksites, and the terms of employment. See 20 C.F.R. §§ 655.121,
655.122(c); see also id. §§ 653.501(c)(1)(iv), (c)(3)(viii).
On November 4, after WKI had corrected a number of deficiencies in its H-2A
application, the DOL accepted WKI’s application for processing. Because WKI was
required to make employment available to United States workers first, see Llacua, 930
F.3d at 1169, it began working with the relevant state workforce agencies, including the
Texas Workforce Commission (TWC), to recruit United States workers for the available
positions described in the clearance order. On November 11, WKI wrote to the DOL to
update the agency on its recruitment efforts and to ask for immediate processing of its
application because of “the emergency situation and the upcoming agricultural season.”
Aplt. App., Vol. 3 at 516. On November 14 the DOL notified WKI that its application
had been partially certified.
During the recruitment period numerous United States workers expressed interest
6
in WKI’s job listings; a person who had worked for TWC for some 40 years testified that
she could not remember ever seeing another H-2A application that resulted in so many
referrals of qualified United States workers. WKI hired Plaintiffs, all of whom were
“United States workers” under the H-2A regulations. See 20 C.F.R. § 655.103(b).
Because WKI did not draw up separate written work contracts for each Plaintiff, “the
required terms of the [clearance] order and the certified Application for Temporary
Employment Certification” became their work contracts. 20 C.F.R. § 655.122(q).
At some point in November 2011, however, Mr. Campos called Cervantes and
“talked to somebody on the farm,” leaving a message for Dino Cervantes that the other
farms were terminating their work agreements and that WKI “wouldn’t do anything against
him” if he likewise “had to terminate” the Agreement. Aplt. App., Vol. 2 at 392. In the
same vein, on November 22 WKI sent an “EMERGENCY REQUEST” to the DOL
seeking to postpone the start date by four months, changing the period of employment for
which WKI had been approved to employ farmworkers to March 1 through June 30, 2012.
In its letter to the DOL, WKI stated that “the agricultural producers that WKI has
contracted with . . . have informed WKI that due to severe drought conditions . . . , there is
no work to be performed at this time.” Aplt. App., Vol. 3 at 522. On December 1 the
DOL granted WKI’s request to cancel its H-2A application because of contract
impossibility.
According to Mr. Franzoy, who had also entered into an agreement with WKI, its
assertion to the DOL that the contracts were canceled due to weather conditions was “a
bunch of kahooey.” Aplt. App., Vol. 2 at 427. “The reason that [Mr. Campos canceled
7
the H-2A application was] because he wasn’t able to get the people from Mexico in our
agreement.” Id. Mr. Franzoy still “had chile to pick that year,” and he “could have used
the help and the labor.” Id. Presumably, Mr. Campos believed that the farmers with
whom he had contracted would not be happy about paying AEWR wage rates for
domestic workers.
For the Agreement’s effective dates of November 2011 through March 2012,
Cervantes met its seasonal labor needs through its longtime labor contractor, Jesus
Maldonado, whose workers were paid the state minimum wage for picking chile and other
tasks. Neither Cervantes nor WKI provided work to Plaintiffs during the time period for
which Plaintiffs were hired under the terms of the H-2A contract.
B. Court Proceedings
Plaintiffs filed suit in the United States District Court for the Western District of
Texas against Mr. Campos, WKI, Cervantes, and other agricultural employers with whom
WKI had contracted. The case was later transferred to the District of New Mexico.
Plaintiffs alleged four causes of action: breach of their employment contracts, violations of
the AWPA under 29 U.S.C. §§ 1811, 1821, and 1822,2 common-law fraud, and civil
conspiracy. They sought declaratory relief and statutory or actual damages for the alleged
violations of their AWPA rights; actual, incidental, and consequential damages resulting
2
All nine Plaintiffs claimed that Cervantes violated the AWPA’s provisions relating to
false information, see 29 U.S.C. § 1821(f), and working arrangements, see 29 U.S.C.
§ 1822(c). Six Plaintiffs asserted that Cervantes violated the AWPA’s certificate-of-
registration requirement. See 29 U.S.C. § 1811. And one Plaintiff claimed that
Cervantes violated 29 U.S.C. § 1821(a) and (g) by failing to disclose to him various
required information in writing and in a language he could understand.
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from the alleged breach of contract, conspiracy, and fraud; and punitive damages. All
defendants except Cervantes have either settled or defaulted, or they were otherwise
dismissed.
Cervantes moved for summary judgment on all claims. In January 2018 the district
court granted the motion on Plaintiffs’ claims for breach of contract, fraud, conspiracy, and
AWPA violations under 29 U.S.C. §§ 1811 and 1821; and in September 2018 it granted
summary judgment on Plaintiffs’ § 1822(c) AWPA claim.
On appeal Plaintiffs argue that the district court erred in granting summary
judgment in favor of Defendants on their claims for breach of contract, violation of 29
U.S.C. § 1822(c) in the AWPA, and civil conspiracy. They do not challenge the district
court’s entry of judgment in favor of Cervantes on their claims for fraud and for violations
of 29 U.S.C. §§ 1811 and 1821 in the AWPA.
II. ANALYSIS
We review de novo the district court’s grant of summary judgment, applying the
same legal standards that govern the district court. See Morden v. XL Specialty Ins., 903
F.3d 1145, 1151 (10th Cir. 2018). Summary judgment is appropriate if “there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a matter
of law.” Fed. R. Civ. P. 56(a). “A dispute is genuine if there is sufficient evidence on
each side so that a rational trier of fact could resolve the issue either way, and it is
material if under the substantive law it is essential to the proper disposition of the claim.”
Dahl v. Charles F. Dahl, M.D., P.C. Defined Ben. Pension Tr., 744 F.3d 623, 628 (10th
Cir. 2014) (internal quotation marks omitted). “We construe the factual record and the
9
reasonable inferences therefrom in the light most favorable to the nonmoving party.”
Mata, 427 F.3d at 749. But “to defeat a motion for summary judgment, evidence,
including testimony, must be based on more than mere speculation, conjecture, or
surmise.” Hasan v. AIG Prop. Cas. Co., 935 F.3d 1092, 1098 (10th Cir. 2019) (brackets
and internal quotation marks omitted). “[W]e have discretion to affirm a summary
judgment on any ground adequately supported by the record, so long as the parties have
had a fair opportunity to address that ground.” Id. at 1099 (brackets and internal
quotation marks omitted). “[A] federal district court’s state-law determinations are
entitled to no deference and are reviewed de novo.” Roberts v. Printup, 422 F.3d 1211,
1215 (10th Cir. 2005) (brackets and internal quotation marks omitted).
A. Breach of contract
Plaintiffs allege that Cervantes breached Plaintiffs’ employment contracts (that is,
the clearance order) because it “fail[ed] to provide any of the promised work” to
Plaintiffs during the November 2011 to March 2012 season. Aplt. App., Vol. 1 at 56.
Although it was Mr. Campos, not Cervantes, who filed the clearance order with the DOL
and had direct contact with Plaintiffs, Plaintiffs argue that Cervantes is nonetheless liable
because it authorized WKI to act as its agent in recruiting Plaintiffs and therefore can be
held responsible by them for any contractual breach. In response, Cervantes contends that
the district court correctly concluded that it lacked sufficient control over WKI to create an
agency relationship.
We hold that the district court erred in granting Cervantes summary judgment on
this ground. As will be explained in more depth below, the “control” test applied by the
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district court is the test used to distinguish employees from independent contractors, who
may or may not be agents. The distinction is important in tort law because employers may
be liable for the conduct of tortfeasors who are their employees when they would not be
liable if the tortfeasors were not employees but mere independent contractors. But this is a
contract claim, not a tort claim. Cervantes may be liable under a contract entered into by
Mr. Campos as its agent even though Mr. Campos was not an employee of Cervantes. And
although the agency relationship requires some measure of control by the principal, the
requisite control is much less intrusive than the control necessary for an employer-
employee relationship. In our view, the evidence presented to the district court could
support a determination that Mr. Campos was acting as the agent of Cervantes in entering
into contracts with Plaintiffs. Therefore, the summary judgment on the contract claim
cannot stand.
We assume, as do the parties, that the agency issue should be resolved under New
Mexico law. We observe, however, that there appears to be nothing unique about New
Mexico law in this area, so we look to the usual common-law authorities, including
treatises and case law. In particular, New Mexico courts have treated the Restatement
(Second) of Agency (1958) and, more recently, the Restatement (Third) of Agency
(2006), as authoritative on various aspects of agency law. See, e.g., Korba v. Atl.
Circulation, Inc., 231 P.3d 118, 120 (N.M. Ct. App. 2010) (adopting the test set forth in
the Restatement (Second) § 220 for distinguishing between an employee and an
independent contractor); Maes v. Audubon Indem. Ins. Grp., 164 P.3d 934, 939–41 (N.M.
2007) (relying on Restatement (Third) § 1.01). And in any event, as shown below, the
11
Restatements and New Mexico case law are aligned on fundamental agency questions
such as the formation of an agency relationship.
1. Background agency principles
To resolve this appeal, we need not examine all the intricacies of agency law. We
will briefly review some of the fundamental concepts and principles. Then we can focus
on the meaning and implications of the principal’s authority to control the agent.
We begin with the definition: “Agency is the fiduciary relationship that arises
when one person (a ‘principal’) manifests assent to another person (an ‘agent’) that the
agent shall act on the principal’s behalf and subject to the principal’s control, and the
agent manifests assent or otherwise consents so to act.” Restatement (Third) of Agency
§ 1.01; see Hansler v. Bass, 743 P.2d 1031, 1036 (N.M. Ct. App. 1987) (“An agent is one
authorized by another to act on his behalf and under his control.”); Restatement (Second)
of Agency § 1(1) (“Agency is the fiduciary relation which results from the manifestation
of consent by one person to another that the other shall act on his behalf and subject to his
control, and consent by the other so to act.”).
An agent is not simply someone who acts to benefit another person. Anyone who
provides services or goods is expected to benefit us. Central to the notion of agency is
that the agent acts “on behalf of” the principal. The agent is acting in the principal’s
stead, as the principal’s representative. As stated by the Reporter for the Restatement
(Third) of Agency, “[A]gency doctrine defines the legal consequences of choosing to act
through another person in lieu of oneself.” Deborah A. Demott, A Revised Prospectus for
a Third Restatement of Agency, 31 U.C. Davis L. Rev 1035, 1039 (1998). “It has been
12
said that a relationship of agency always contemplates three parties—the principal, the
agent, and the third party with whom the agent is to deal.” Restatement (Third) of
Agency § 1.01 cmt. c (internal quotation marks omitted).
The portion of agency law relevant to this appeal is that which governs when the
principal is liable to a third party for the actions of its agent. As a general rule, liability
turns on whether the agent was acting with actual or apparent authority. Both types of
authority depend on the acts of and communications by the principal. Actual authority
turns on the reasonable belief of the agent based on such acts and communications. “An
agent acts with actual authority when, at the time of taking action that has legal
consequences for the principal, the agent reasonably believes, in accordance with the
principal’s manifestations to the agent, that the principal wishes the agent so to act.”
Restatement (Third) of Agency § 2.01. “An agent who has actual authority holds power
as a result of a voluntary conferral by the principal and is privileged, in relation to the
principal, to exercise that power.” Id. § 1.01 cmt. c. Apparent authority, in contrast,
turns on the reasonable belief of a third party based on the principal’s acts and
communications. “Apparent authority is the power held by an agent or other actor to
affect a principal’s legal relations with third parties when a third party reasonably
believes the actor has authority to act on behalf of the principal and that belief is traceable
to the principal’s manifestations.” Id. § 2.03.
An agent acting under actual or apparent authority can bind the principal to a
contract with a third party. See id. § 6.01 (“When an agent acting with actual or apparent
authority makes a contract on behalf of a disclosed principal, . . . the principal and the
13
third party are parties to the contract.”). The third party need not know the identity of the
principal. See id. § 6.02 cmt. a (The principal is a party to a contract made by its
authorized agent if the other party to the contract “has notice that the agent acts on behalf
of a principal but does not have notice of the principal’s identity.”). And even if the
agent does not disclose the existence of a principal, the principal will be a party to a
contract made on its behalf by an agent acting with actual authority unless the contract
specifically provides otherwise. See id. § 6.03. As the Restatement (Third) explains, “If
an agent acts with actual authority in making a contract on an undisclosed principal’s
behalf, the basis for treating the principal as a party to the contract is that the agent acted
reasonably on the basis of the principal’s manifestation of assent to the agent. The
principal’s liability on the contract is thus consistent with the agent’s reasonable
understanding of the principal’s wishes.” Id. § 6.03 cmt. b (citations omitted); see also
San Juan Agr. Water Users Ass’n v. KNME-TV, 257 P.3d 884, 889 (N.M. 2011) (“An
undisclosed principal can sue and be sued on a contract made in the agent’s name
because the common law of agency regards the agent’s actions as the principal’s own,” as
the agent’s actions are “[u]nquestionably . . . in legal contemplation the acts of the
principal” so long as they are within the agent’s authority. (internal quotation marks
omitted)).
The law governing the principal’s liability for tort is a bit different, although there
is overlap. As with liability on a contract, a principal is liable for tortious conduct of an
agent when the conduct was within the scope of the agent’s actual authority. See
Restatement (Third) of Agency § 7.04(1). Thus, when an agent engages in tortious
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conduct that “the agent reasonably believes, on the basis of a manifestation of the
principal,” is in accordance with the principal’s wishes, this conduct falls within the
agent’s actual authority and exposes the principal to liability in tort. Id. § 7.04 cmt. b.
But even when the agent’s tortious act was not within the scope of the agent’s
actual authority, the principal may be liable under the doctrine of respondeat superior if
the principal is the employer of the agent-employee and the tortious conduct was
committed by the employee acting within the scope of employment. Id. § 7.07(1).3 For
this purpose, we define employee as “an agent whose principal controls or has the right to
control the manner and means of the agent’s performance of work.” Id. § 7.07(3)(a). (In
the past an employee has also been referred to as a servant, and the principal has then
been referred to as the master rather than the employer. See Restatement (Second) of
Agency § 2 & cmt. a).
What is very important, but often overlooked, is that not every agent is an
employee. An agent who is not an employee is called an independent contractor,
although some independent contractors (perhaps most) are not even agents. See
Restatement (Third) of Agency § 1.01 cmt. c (“[T]he common term ‘independent
contractor’ is equivocal in meaning and confusing in usage because some termed
independent contractors are agents while others are nonagent service providers.”);
Restatement (Second) of Agency §§ 2 & cmt. a, 14N & cmt. a (distinguishing between
3
A principal may incur liability arising from its agent’s tortious conduct on other grounds
as well, such as for “negligence in selecting, training, retaining, supervising, or otherwise
controlling the agent.” Restatement (Third) of Agency § 7.05(1).
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independent contractors and servants); Korba, 231 P.3d at 120 (distinguishing between
“employer-employee” and “independent-contractor” agency relationships).
The nature and extent of the principal’s right to control the agent determines
whether the agent is an employee or merely an independent contractor. To be sure, all
agents are subject to the control of the principal; control is an essential element of the
relationship. See Restatement (Third) of Agency § 1.01 cmt. f(1) (“An essential element
of agency is the principal’s right to control the agent’s actions.”); Restatement (Second)
of Agency § 1 cmt. b (“Agency is a legal concept which depends upon the existence of
required factual elements: the manifestation by the principal that the agent shall act for
him, the agent’s acceptance of the undertaking and the understanding of the parties that
the principal is to be in control of the undertaking.”); N.M. Military Inst. v. NMMI
Alumni Assoc., 458 P.3d 434, 440 (N.M. Ct. App. 2018) (“In determining whether an
agency relationship exists, the ‘principal consideration’ is ‘the control, or right to
control,’ the agent’s conduct.” (quoting Shaver v. Bell, 397 P.2d 723, 727 (N.M. 1964))).
The control that the principal may exercise over the agent is one of the fundamental
attributes of the agency relationship that distinguishes it from other fiduciary
relationships, such as that between a trustee and a trust beneficiary. See Warren Seavey,
The Rationale of Agency, 29 Yale L.J. 859, 868 n.29 (1919–20) (acknowledgment by
Prof. Seavey that his use of the term control in the agency context “may be analytically
improper as not falling within recognized categories,” but explaining that he uses the
term “to indicate the legal coercion capable of being exercised by the principal through
his power of revoking, diminishing, or enlarging the powers granted the agent, the agent
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being under the correlative legal liability of having this power exercised, which
distinguishes the relation of agency from that of trustee and cestui and of contractors”);
Demott, A Revised Prospectus, supra, at 1037–38 (inclusion of the right of control in the
definition of agency “excludes trustees and the directors of corporations because, as the
law structures the trust and the corporation, the beneficiaries of these relationships do not
have a right of control over the fiduciary actor”); Restatement (Third) of Agency § 1.01
cmt. g (“[A] trustee is not an agent of the settlor or beneficiaries unless the terms of the
trust subject the trustee to the control of either the settlor or the beneficiaries.”).
The right to control need not be exercised for an agency relationship to exist. It is
the right of control, and not the actual exercise of control, that is an essential element of
an agency relationship. “A principal’s failure to exercise the right of control does not
eliminate it . . . .” Restatement (Third) of Agency § 1.01 cmt. c. In Gallegos v. Citizens
Insurance Agency the New Mexico Supreme Court upheld a jury verdict against an
insurance company based on its alleged agent’s actions, holding that the jury could
reasonably find an agency relationship based on evidence that the defendant “allowed
[the alleged agent] to solicit insurance business” and “had the power to control his
actions,” “even though the right of control may not have been exercised.” 779 P.2d 99,
106 (N.M. 1989) (internal quotation marks omitted).
The principal’s control may concern only the overall mission, not operational
details. For instance, the principal may exercise control simply by giving initial
instructions to the agent on what actions to take. “If the principal requests another to act
on the principal’s behalf, indicating that the action should be taken without further
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communication and the other consents so to act, an agency relationship exists.”
Restatement (Third) of Agency § 1.01 cmt. c; see also id. § 1.01 cmt. f(1) (“[W]ithin any
relationship of agency the principal initially states what the agent shall and shall not do, in
specific or general terms.”); Restatement (Second) of Agency § 14 cmt. a (“The right of
control by the principal may be exercised by prescribing what the agent shall or shall not
do before the agent acts, or at the time when he acts, or at both times.”); Deborah A.
DeMott, The Fiduciary Character of Agency and the Interpretation of Instructions at 2 &
n.1, in PHILOSOPHICAL FOUNDATIONS OF FIDUCIARY LAW (Andrew S. Gold &
Paul B. Miller eds., 2014) (“The principal’s fundamental mechanism of control, which
may be supplemented by others, is the provision of instructions to the agent, either
initially when stating the actions the agent has authority to take on the principal’s behalf
or thereafter throughout the duration of their relationship.”).
To be sure, as already suggested, “the principal retains the capacity throughout the
relationship to assess the agent’s performance, provide instructions to the agent, and
terminate the agency relationship by revoking the agent’s authority.” Restatement
(Third) of Agency § 1.01 cmt. f(1); see id. § 1.01 cmt. c (“The requirement that an agent
be subject to the principal’s control assumes that the principal is capable of providing
instructions to the agent and of terminating the agent’s authority.”); id. cmt. f(1) (“The
power to give interim instructions distinguishes principals in agency relationships from
those who contract to receive services provided by persons who are not agents.”); id.
§ 8.09 cmt. c (“Within a relationship of agency, a principal always has power to provide
an agent with interim instructions concerning action to be taken on the principal’s behalf.
18
The power to give interim instructions is an integral part of a principal’s control over an
agent and a defining element in a relationship of common-law agency.”); Restatement
(Second) of Agency § 14 cmt. a (“The principal’s right to control is continuous and
continues as long as the agency relation exists, even though the principal agreed that he
would not exercise it. Thus, the agent is subject to a duty not to act contrary to the
principal’s directions, although the principal has agreed not to give such directions.”); id.
(“[T]he principal has power to revoke the agent’s authority, although this would
constitute a breach of his contract with him.”).
But the critical point for our purposes is that, as the Restatement (Second) of
Agency explains, the principal’s “exercise [of control] may be very attenuated and, as
where the principal is physically absent, may be ineffective.” § 14 cmt. a; see also
United States v. Ackerman, 831 F.3d 1292, 1301 (10th Cir. 2016) (Gorsuch, J.) (“[A]
principal may delegate general authority to his or her agent to act in the ordinary course,
without constant supervision or awareness of every discrete act.”). New Mexico law is in
accord with this approach. The State’s courts “ha[ve] not required a particularly invasive
level of control to support a finding that a principal-agent relationship exists.” N.M.
Military Inst., 458 P.3d at 440. They have concluded that “‘a person may be an agent
although the principal lacks the right to control the full range of the agent’s activities,
how the agent uses time, or the agent’s exercise of professional judgment.’” Id. (quoting
Restatement (Third) of Agency § 1.01 cmt. c).
This minimal level of control required to establish an agency relationship stands in
contrast to the much more significant and intrusive right of control that makes an agent
19
an employee. Recall how the Restatement (Third) defines employee for the purpose of
applying respondeat superior: “an agent whose principal controls or has the right to
control the manner and means of the agent’s performance of work.” § 7.07(3)(a); see
§ 7.07(1) (vicarious liability of employer for torts of employee). Implicit in this
definition is that one can be an agent of a principal even if the principal does not control
or have the right to control the “manner and means of the agent’s performance of work.”
Otherwise, there would be no need for the definition in § 7.07(3)(a), as one could say
simply that a principal is responsible for the tortious conduct of an agent committed while
acting within the scope of the agency. In other words, although one requirement of an
agency relationship is the principal’s control or right of control over the agent, such
control need not be control over the manner and means of the agent’s performance of
work; that higher level of control is necessary only to establish an employee relationship.
The Restatement (Third) does not explore in depth the meaning of “manner and
means.” But to determine whether to apply the doctrine of respondeat superior (that is,
whether the principal is liable in tort), the New Mexico courts, following the guidance of
the Restatement (Second), have frequently distinguished an employee from an
independent contractor based on the power to control. They have said that “[a]n
independent contractor is defined as ‘a person who contracts with another to do
something for him but who is not controlled by the other nor subject to the other’s right
to control with respect to his physical conduct in the performance of the undertaking.’”
Talbott v. Roswell Hosp. Corp., 118 P.3d 194, 197 (N.M. Ct. App. 2005) (quoting
Restatement (Second) of Agency § 2(3)) (emphasis omitted); see Jaramillo v. Thomas,
20
409 P.2d 131, 132 (N.M. 1965) (“A right to control the physical details as to the manner
and method of performance of the contract usually but not always establishes a master
and servant relationship, but control only of the ultimate results to be obtained usually
results in an independent contractor relationship.”); cf. Quigley v. Rosenthal, 327 F.3d
1044, 1064 n.10 (10th Cir. 2003) (“attorneys are independent contractors as well as
agents,” as they “exercise exclusive control of the manner of performing their legal work,
being responsible to the client only for the result” (ellipsis, brackets, and internal
quotation marks omitted)). Under the Restatement (Second) the right to control “physical
acts” is accorded primary significance. See Restatement (Second) of Agency § 14 cmt. a
(“The extent of the right to control the physical acts of the agent is an important factor in
determining whether or not a master-servant relation between them exists.”); § 220 (the
determinative factor is often “the extent of control which, by the agreement, the master
may exercise over the details of the work”). But it must be recognized that the control of
physical acts is not the exclusive consideration. New Mexico has “adopted the approach
taken in the Restatement (Second) of Agency § 220, which incorporates many factors
into the calculus of employee versus independent contractor.” Celaya v. Hall, 85 P.3d
239, 243 (N.M. 2004); see id. at 244 (“Applying all the factors in the Restatement to
Defendant’s job, and in light of the totality of the circumstances, we conclude that at the
time of the incident Defendant undoubtedly was an employee of the Department.
Considered in context, the Department exercised sufficient control over Defendant’s
21
activities in a manner consistent with the status of employee.”).4 But cf. Loya v.
Gutierrez, 350 P.3d 1155, 1169 (N.M. 2015) (“When th[e] right to control is . . .
fundamentally a part of the relationship [such as the relationship between the sheriff and
a sworn sheriff’s deputy engaged in enforcing the law], we find it unnecessary to analyze
the relationship under the additional factors announced in Celaya.”).
In short, where an agent does not need to be an employee to create liability for the
principal—as when an agent with actual or apparent authority enters into a contract on
the principal’s behalf, see Restatement (Third) of Agency § 6.01—a minimal level of
control may suffice. In particular, there is no requirement that the principal have the right
to control the manner and means of the agent’s performance of work. See N.M. Military
Inst., 458 P.3d at 440; cf. Barron v. Evangelical Lutheran Good Samaritan Soc., 265 P.3d
720, 722, 725–26 (N.M. Ct. App. 2011) (holding, without discussion of the right to
control, that a nursing-home resident created an agency relationship with her
granddaughter when she authorized her granddaughter to complete her admission
paperwork, binding her to an arbitration agreement entered into by the granddaughter).
The Second Circuit has succinctly stated the proposition: “Control is not a crucial
question where the issue is liability for a contract . . . . If the agent had authority to enter
4
“Other considerations include: 1) the type of occupation and whether it is usually
performed without supervision; 2) the skill required for the occupation; 3) whether the
employer supplies the instrumentalities or tools for the person doing the work; 4) the
length of time the person is employed; 5) the method of payment, whether by time or job;
6) whether the work is part of the regular business of the employer; 7) whether the parties
intended to create an employment relationship; and 8) whether the principal is engaged in
business.” Celaya, 85 P.3d at 243 (citing Restatement (Second) of Agency § 220(2)(a)–
(j)).
22
into the contract, the principal will be bound.” Commercial Union Insurance Co. v.
Alitalia Airlines, 347 F.3d 448, 462 (2d Cir. 2003); see Stripling v. Jordan Production,
234 F.3d 863, 870–71, 871 n.11 (5th Cir. 2000) (similar).
2. Application
In concluding that Cervantes did not have the requisite right to control WKI’s
actions, the district court reasoned that WKI was an independent contractor because
Cervantes “direct[ed] only the result to be accomplished, but not the manner in which it
must be accomplished.” Alfaro-Huitron, 2018 WL 522312, at *8 (applying New Mexico
UJI 13-404, which defines independent contractor for purposes of respondeat superior).
But this is the control test for the employer-employee relationship, not the lesser control
necessary for an agency relationship. As the previous discussion explains, an
independent contractor may be an agent even if it is not an employee, and a principal may
be found responsible for an agent-independent contractor’s contractual engagements even
if it would not be liable for the contractor’s torts. In Quigley this court affirmed the
district court’s rejection of a proposed jury instruction that stated: “To determine
whether a person is an agent, the most important factor to consider is whether the
principal had the right to control the manner of work performed by the agent.” 327 F.3d
at 1064 (internal quotation marks omitted). We explained:
Although control is certainly relevant to the existence of an agency
relationship, the tendered instruction did not state that principle. Instead,
the tendered instruction referred to a principal controlling “the manner of
work performed” by the agent, a requirement necessary only if an agent is
alleged to be an employee as opposed to an independent contractor.
Id. (citation omitted). The same proposition holds here.
23
Applying the correct legal framework, we conclude that there is a genuine dispute
of material fact about whether WKI acted as Cervantes’s actual or apparent agent in
recruiting Plaintiffs. Construing the factual record and the reasonable inferences to be
drawn therefrom in the light most favorable to Plaintiffs, see Mata, 427 F.3d at 749, we
conclude that a jury could find that WKI and Plaintiffs had reasonable beliefs (traceable
to manifestations by Cervantes) that Cervantes had authorized WKI to hire farmworkers
for Cervantes. The reasonable belief by WKI establishes actual authority. See
Restatement (Third) of Agency § 2.01. The reasonable belief by Plaintiffs establishes
apparent authority. See id. § 2.03.
If Cervantes authorized WKI to hire workers for Cervantes through the H-2A
program, it exercised all the control necessary to establish an agency relationship. “If the
principal requests another to act on the principal’s behalf, indicating that the action
should be taken without further communication and the other consents so to act, an
agency relationship exists.” Id. § 1.01 cmt. c; Restatement (Second) of Agency § 14 cmt.
a (“The right of control by the principal may be exercised by prescribing what the agent
shall or shall not do before the agent acts, or at the time when he acts, or at both times.”);
DeMott, The Fiduciary Character of Agency, supra, at 2 & n.1 (“The principal’s
fundamental mechanism of control, which may be supplemented by others, is the
provision of instructions to the agent, either initially when stating the actions the agent
has authority to take on the principal’s behalf or thereafter throughout the duration of
their relationship.”). “Control is not a crucial question where the issue is liability for a
contract . . . . If the agent had authority to enter into the contract, the principal will be
24
bound.” Commercial Union, 347 F.3d at 462; see Barron, 265 P.3d at 725–26 (nursing-
home resident created an agency relationship with granddaughter when she authorized
granddaughter to complete her admission paperwork).
The Agreement executed by Dino Cervantes set forth the categories of workers
(“skilled farm labor workers; U.S. Citizens, legal residents, or foreign workers with
temporary working visas (H-2A)”) as well as the type of work they would be performing,
the number of workers, and the dates on which they would be working. Aplt. App., Vol. 3
at 474. WKI was required to submit the Agreement and other work contracts to the
government to show that it had jobs available for the H-2A workers it sought, see 20
C.F.R. § 655.132(b)(4), and those contracts would have been meaningless if they did not
create binding obligations on both the contractor and the farmer—particularly if they
allowed a farmer to reject the contractor’s recruitment of domestic workers at the wage
rates required by the program. See N.C. Growers’ Ass’n, Inc., 702 F.3d at 759 (DOL
regulations are designed “to effectuate Congress’ intent that domestic agricultural workers
(U.S. workers) be given preference over foreign agricultural workers (H-2A workers), and
that the employment of H-2A workers would not adversely affect the wages or working
conditions of U.S. workers”); cf. Everglades Harvesting & Hauling, Inc. v. Scalia, 427 F.
Supp. 3d 101, 116 (D.D.C. 2019) (agricultural labor contractors have a reliance interest in
DOL approval of H-2A applications because contractors “must sign contracts committing
to provide a certain amount of labor in order to apply for H-2A [temporary labor
certifications] in the first place” and have thus “b[ound] themselves to provide labor under
the H-2A program”). Dino Cervantes testified that he knew WKI was submitting the
25
Agreement to the DOL as a necessary part of its H-2A application and that H-2A workers
would need to be paid the adverse-effect wage rate. A jury could find that it would have
been reasonable for Mr. Campos to infer that he was authorized to hire workers for
Cervantes, and that it would have been reasonable for those offered jobs by Mr. Campos
(namely, Plaintiffs) to believe that WKI had that authority.
Although not essential to the conclusion that WKI was Cervantes’s agent, we also
note that the record supports the inference that Cervantes had the right to issue interim
instructions to WKI: Mr. Campos testified that he would have followed any instructions
that an agricultural business gave him regarding where he should recruit labor and that he
would have had to replace any workers that a business did not want working on its farm.
And Mr. Campos’s conversations with the farm operators about the termination of their
work agreements—including the message he left for Dino Cervantes on this topic—reflect
his understanding that Cervantes and the other agricultural businesses had the power to
revoke WKI’s authority to recruit workers on their behalf, likewise demonstrating their
right of control. See Restatement (Third) of Agency § 1.01 cmts. c and f(1); Restatement
(Second) of Agency § 14 cmt. a.
Even if the level of control supported by the evidence was not “particularly
invasive,” N.M. Military Inst., 458 P.3d at 440, it was sufficient under New Mexico law
to expose Cervantes to liability for WKI’s alleged contractual breach.5 Cf. San Juan, 257
5
This conclusion finds support in other cases that have touched on this issue. For
instance, in Rodriguez v. SGLC, Inc., a district court concluded that a labor contractor
who hired Mexican workers under the H-2A program for an agricultural business was the
business’s agent. See 2012 WL 5704403, at *14–15 (E.D. Cal. Nov 15, 2012). And
26
P.3d at 889 (“Unquestionably, insofar as an agent’s acts are within [the agent’s] authority
they are in legal contemplation the acts of the principal.”). We accordingly reverse the
district court’s grant of summary judgment in favor of Cervantes on Plaintiff’s breach-of-
contract claim and remand this claim for further proceedings.
To conclude this discussion, however, we must add a cautionary note. Although
the evidence here supports an inference that WKI acted as the agent of Cervantes in
hiring Plaintiffs, that inference is based on the specifics of this case. We have no reason
to think that labor contractors or temporary-employment agencies in general are agents of
those businesses that use them. The contractor may merely have a pool of workers from
whom the employer can select. That arrangement is readily distinguishable from one in
which the employer authorizes the contractor to act on behalf of the employer in hiring
the employer’s employees.
B. The AWPA
Plaintiffs allege that Cervantes violated the AWPA’s requirement that “[n]o farm
labor contractor, agricultural employer, or agricultural association shall, without
justification, violate the terms of any working arrangement made by that contractor,
employer, or association with any migrant agricultural worker.” 29 U.S.C. § 1822(c).
The AWPA defines agricultural employer as “any person who owns or operates a
other courts have held that a labor contractor was the agent of an agricultural business in
hiring domestic migrant workers. See Ochoa v. JB Martin & Sons, 287 F.3d 1182, 1189–
92 (9th Cir. 2002) (Arizona district court had personal jurisdiction over agricultural
business because labor contractor was acting as its agent in Arizona); Castillo v. Case
Farms of Ohio, Inc., 96 F. Supp. 2d 578, 593–95 (W.D. Tex. 1999); Cardenas v. Benter
Farms, 2000 WL 1372848, at *8–9 (S.D. Ind. Sept. 19, 2000).
27
farm, ranch, processing establishment, cannery, gin, packing shed or nursery, or who
produces or conditions seed, and who either recruits, solicits, hires, employs, furnishes, or
transports any migrant or seasonal agricultural worker.” 29 U.S.C. § 1802(2). The term
employs in this statute adopts the definition in the Fair Labor Standards Act (FLSA), see
id. § 1802(5) (citing id. § 203(g)), which states that employ “includes to suffer or permit
to work,” id. § 203(g). “An entity suffers or permits an individual to work if, as a matter
of economic reality, the individual is dependent on the entity.” Gonzalez-Sanchez v. Int’l
Paper Co., 346 F.3d 1017, 1020 (11th Cir. 2003) (internal quotation marks omitted).
The regulations implementing the AWPA state that the term employ “includes the
joint employment principles applicable under the [FLSA].” 29 C.F.R. § 500.20(h)(5).
Under these principles, “[t]he term joint employment means a condition in which a single
individual stands in the relation of an employee to two or more persons at the same time.
A determination of whether the employment is to be considered joint employment
depends upon all the facts in the particular case.” Id.Plaintiffs contend that Cervantes is liable under the AWPA because Cervantes
failed to provide them with work, in violation of the working arrangement created when
Plaintiffs accepted WKI’s offer of employment under its clearance order. Cervantes does
not dispute the district court’s conclusion that both Cervantes Agribusiness and Cervantes
Enterprises are agricultural employers but argues that they cannot be held liable because
neither directly entered into a working arrangement with Plaintiffs or acted as their joint
employer.
In the district-court proceedings Plaintiffs argued various theories under which
28
Cervantes could be found liable under the AWPA, including that (1) “Mr. Campos’s and
WKI’s alleged maltreatment of Plaintiffs occurred in an agency capacity attributable to the
Cervantes Defendants” and (2) “the Cervantes Defendants and WKI ‘jointly employed’ the
Plaintiffs, thereby making them responsible for WKI’s alleged violations of the Act.”
Alfaro-Huitron, 2018 WL 522312, at *11. The district court rejected Plaintiffs’ agency
theory of AWPA liability for the same reasons discussed (and reversed) above. And it also
rejected Plaintiffs’ joint-employment theory.
The parties’ briefing focuses on the district court’s rejection of Plaintiffs’ joint-
employment theory of liability. But we conclude that the district court erred as an initial
matter by rejecting Plaintiffs’ agency theory of liability, and we thus reverse on this basis.
Agency is a “threshold issue” for determining whether an agricultural business may be held
liable under the AWPA for a labor contractor’s actions. Renteria-Marin v. Ag-Mart
Produce, Inc., 537 F.3d 1321, 1323, 1325–26 (11th Cir. 2008) (labor contractors, or
“crew leaders,” acted as agents of an agricultural business in obtaining housing for
workers and thereby exposed the business to liability for the workers’ claims based on the
AWPA’s housing-related provisions). As one court has explained:
The fact that Congress has created a statutory framework of protections for
migrant workers in no way exempts agricultural employers, recruiters, and
overseers from common law agency principles. Rather, the protections
afforded by the AWPA are designed to supplement traditional common law
principles. Thus, one theory under which the plaintiffs could prove that [the
agricultural business] itself committed the alleged violations would be to
demonstrate that the [labor contractor’s] misdeeds were committed by [the
contractor] within the scope of its role as an agent of [the agricultural
employer].
Castillo v. Case Farms of Ohio, Inc., 96 F. Supp. 2d 578, 593 (W.D. Tex. 1999) (citations
29
omitted); see also id. at 595 (“[The labor contractor’s] interactions with the . . . plaintiffs
may be attributed to [the agricultural employer] for the purpose of assessing compliance
with AWPA.”). By not honoring the contract entered into by its agent, WKI, with
Plaintiffs, Cervantes would have “violate[d] the terms of a[] working arrangement made . .
. with . . . migrant agricultural worker[s].” 29 U.S.C. § 1822(c).6
On the other hand, we agree with the district court that absent an agency
relationship with WKI, Cervantes was not liable as a joint employer for not hiring
Plaintiffs. To be a joint employer, a farmer must, of course, be an employer. “In
determining if the farm labor contractor or worker is an employee or an independent
contractor, the ultimate question is the economic reality of the relationship—whether
there is economic dependence upon the agricultural employer/association or farm labor
contractor, as appropriate.” 29 C.F.R. § 500.20(h)(4). The DOL has promulgated a
regulation setting forth seven factors that are to be considered in determining whether a
person is a joint employer: (1) “[w]hether the agricultural employer/association has the
6
We should note that the agency analysis for this federal statutory claim, unlike the
breach-of-contract-claim, appears to be governed by federal law, not New Mexico law.
See Cmty. for Creative Non-Violence v. Reid, 490 U.S. 730, 740–41 (1989) (when agency
principles are applied to federal statutes, courts should “rel[y] on the general common
law of agency, rather than on the law of any particular State”). But because New Mexico
follows the same “general common law of agency,” id., that applies to this federal claim,
the above discussion of agency principles—particularly as it refers to the Restatements—
applies with equal force here. See Salyers v. Metro. Life Ins. Co., 871 F.3d 934, 939 n.3
(9th Cir. 2017) (“The federal common law of agency has frequently been derived from
the Restatement[s] of Agency.”); Castillo, 96 F. Supp. 2d at 594 (referring to
Restatement (Second) in considering whether farm was liable under the AWPA based on
actions of its agent). Thus, the same facts that could support a finding that WKI was
Cervantes’s agent for purposes of the breach-of-contract claim would also support a
finding that WKI was Cervantes’s agent for purposes of this federal claim.
30
power, either alone or through control of the farm labor contractor to direct, control, or
supervise the worker(s) or the work performed”; (2) “[w]hether the agricultural
employer/association has the power, either alone or in addition to another employer,
directly or indirectly, to hire or fire, modify the employment conditions, or determine the
pay rates or the methods of wage payment for the worker(s)”; (3) “[t]he degree of
permanency and duration of the relationship of the parties, in the context of the
agricultural activity at issue”; (4) “[t]he extent to which the services rendered by the
worker(s) are repetitive, rote tasks requiring skills which are acquired with relatively little
training”; (5) “[w]hether the activities performed by the worker(s) are an integral part of
the overall business operation of the agricultural employer/association”; (6) “[w]hether
the work is performed on the agricultural employer/association’s premises”; and (7)
“[w]hether the agricultural employer/association undertakes responsibilities in relation to
the worker(s) which are commonly performed by employers, such as preparing and/or
making payroll records, preparing and/or issuing pay checks, paying FICA taxes,
providing workers’ compensation insurance, providing field sanitation facilities, housing
or transportation, or providing tools and equipment or materials required for the job
(taking into account the amount of the investment).” Id. § 500.20(h)(5)(iv). Here,
Plaintiffs contend that they were employees of both WKI and Cervantes, who were their
joint employers. They argue that regardless of whether there was an agency relationship
between WKI and Cervantes, this joint-employment relationship makes Cervantes liable
for their not being hired. We are not persuaded.
Plaintiffs’ analysis of the joint-employer factors focuses on how Cervantes
31
ordinarily treats workers who are provided by labor contractors. But such treatment is
irrelevant for those like Plaintiffs who are never employed by Cervantes. The “ultimate
question” that the seven joint-employment factors are intended to help answer—“whether
there is economic dependence upon the agricultural employer/association or farm labor
contractor,” 29 C.F.R. § 500.20(h)(4)—surely could not be answered by concluding that
a contractor’s workers were economically dependent on a farmer who had no existing
relationship with either the contractor or the workers. Perhaps Cervantes should be
treated as a joint employer of agricultural workers who work for a labor contractor on its
farm. We need not address that issue, however, to resolve this case. If there was no
agency relationship between Cervantes and WKI, we must treat Plaintiffs as if they were
employed by a labor contractor who worked on “speculation”—that is, a contractor with
no prior relationship to a farmer who hires workers and then approaches the farmer to see
if it needs any help. See Avila v. A. Sam & Sons, 856 F. Supp. 763, 768 (W.D.N.Y. 1994)
(labor contractor who had been repeatedly rebuffed “showed up at the farm” and was
employed on a limited basis).
It would make no sense to hold the farmer responsible for promises made to the
workers by the broker before the broker and the farmer had any communication, much
less a contract, between them. The decision in Reyes v. Remington Hybrid Seed Co., Inc.,
495 F.3d 403, 405 (7th Cir. 2007), is instructive. The appellate court held that the farm
was the workers’ joint employer “for events that occurred in the fields under its
management or in its offices.” Id. at 409. But it was not responsible for the contractor’s
unauthorized promise to the workers before arrival at the farm that they would be
32
employed for 70 hours per week for six to eight weeks. See id. at 405–06. The argument
for liability based on the promise, the court explained, “can’t rest on [the definition of
employ in] § 203(g) unless it creates liability that runs backward in time, and there is no
reason to read it in that fashion.” Id. at 405; see also Avila, 856 F. Supp. at 770–71
(When a farmer used a work crew brought by a labor contractor who “arrived
unsolicited” at the farm, the farmer could be held liable for violating the AWPA’s
housing provisions but was not liable for any violations stemming from the contractor’s
recruitment of the work crew.).
We reverse and remand the district court’s entry of summary judgment in favor of
Cervantes on Plaintiffs’ claim under 29 U.S.C. § 1822(c) of the AWPA, but solely on the
agency theory of liability.
C. Civil conspiracy
Under New Mexico law a civil conspiracy is “a combination by two or more
persons to accomplish an unlawful purpose or to accomplish a lawful purpose by
unlawful means.” Las Luminarias of the N.M. Council of the Blind v. Isengard, 587 P.2d
444, 447 (N.M. Ct. App. 1978). A plaintiff bringing a civil-conspiracy claim must
establish (1) the existence of the conspiracy; (2) a specific wrongful act or acts carried out
pursuant to the conspiracy; and (3) the damages resulting from such act or acts. See id.“Without an actionable civil case against one of the conspirators, . . . an agreement, no
matter how conspiratorial in nature, is not a separate, actionable offense.” Ettenson v.
Burke, 17 P.3d 440, 445 (N.M. Ct. App. 2001). “Thus, a conspiracy claim fails as a matter
of law when no actionable civil case exists against” a conspirator. Vigil v. Pub. Serv. Co.
33
of N.M., 94 P.3d 813, 817 (N.M. Ct. App. 2004).
The district court held that Plaintiffs’ conspiracy claim failed because Plaintiffs had
not shown that Cervantes committed an unlawful act. But a wrongful act by any
conspirator can suffice. See Ettenson, 17 P.3d at 445. The district court failed to consider
Plaintiffs’ argument that they could rely on Mr. Campos’s wrongful acts alone.
Nevertheless, we can affirm the dismissal of the conspiracy claim on another
ground, one fully argued in district court and pressed on appeal by Cervantes. See Hasan,
935 F.3d at 1099 (“[W]e have discretion to affirm a summary judgment on any ground
adequately supported by the record, so long as the parties have had a fair opportunity to
address that ground.” (brackets and internal quotation marks omitted)). That ground is the
failure to show the requisite agreement—the first element of a conspiracy claim.
Plaintiffs must prove “a common design or a mutually implied understanding;
an agreement.” Morris v. Dodge Country, Inc., 513 P.2d 1273, 1274 (N.M. Ct. App.
1973). A conspiracy’s existence will seldom be obvious; generally, evidence of the
necessary agreement between coconspirators will be circumstantial and is a matter of
inference from the facts and circumstances. See Santa Fe Techs., Inc. v. Argus Networks,
Inc., 42 P.3d 1221, 1236 (N.M. Ct. App. 2001). Mere speculation, however, will not do.
See Pedroza v. Lomas Auto Mall, Inc., 600 F. Supp. 2d 1162, 1170 (D.N.M. 2009)
(evaluating a civil-conspiracy claim under New Mexico law and stating that “evidence of a
conspiracy will rarely be obvious. Instead, evidence of a conspiracy will generally be
circumstantial. What is important is that the evidence is not speculative.”); cf.
Restatement (Third) of Torts: Liab. for Econ. Harm § 27 cmt. c (2019) (“[A] finding of
34
conspiracy [cannot] be based just on suspicion,” although it must usually be proved “by
circumstantial evidence, such as meetings, shared motivations, and suggestive words. . . .
But whether it be proven by direct evidence or otherwise, and whether it be explicit or
tacit, an agreement must be found.”). For the following reasons, we believe that
Plaintiffs’ evidence does not suffice.
Plaintiffs allege that Cervantes conspired with Mr. Campos and WKI to evade the
H-2A program’s requirements, intending to access foreign workers from Mexico without
giving priority to and hiring available United States workers like Plaintiffs as required by
law. “Plaintiffs claim that Mr. Campos and the farmers, including Dino Cervantes, wanted
Mexican laborers because they believed they would work harder [than United States
workers] for less money.” Alfaro-Huitron, 2018 WL 522312, at *5.
Plaintiffs argued in district court, and continue to argue on appeal, that at least three
facts in the record substantiate the existence of this alleged conspiracy: (1) Cervantes
apparently had no legitimate business reason to join WKI’s H-2A application (as it
admitted in deposition testimony that it always had access to all the United States labor it
needed), and the only rational reason for it to contract with WKI was to circumvent federal
law and obtain immediate access to Mexican labor; (2) WKI’s explanation for why it had
to cancel the H-2A application was false, and the true reason for the cancellation was that
WKI was unable to obtain Mexican labor as promised; and (3) after WKI cancelled the H-
2A application, Mr. Cervantes used his longtime labor contractor to hire all the workers
that Cervantes needed at minimum wage, which is further proof that Cervantes had no
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economic incentive or intention to hire and pay United States workers under the higher H-
2A rates required for WKI’s workers.
We are not persuaded. None of the three facts substantiates, either directly or by
inference, Plaintiffs’ allegation that Cervantes had a “meeting of the minds” with Mr.
Campos to accomplish the illegal objective of importing Mexican laborers without
following the federal H-2A requirements. Aplt. App., Vol. 1 at 54. As Cervantes points
out, Plaintiffs present “no document or evidence of any unlawful communications of a
conspiratorial nature [that] were exchanged between Mr. Campos and Mr. Cervantes.”
Aplee. Br. at 37. Indeed, there is no evidence of any communication by Cervantes to Mr.
Campos after signing the Agreement. True, Cervantes employed WKI with the hope of
obtaining laborers from Mexico. But there is no evidence that if WKI failed in that
endeavor and Cervantes was required by the federal regulations to hire domestic
farmworkers, it planned to renege on its contract, much less that it shared such a plan with
Mr. Campos. There is simply nothing in the record on which to impugn Cervantes’s
integrity. (Yes, Cervantes continues to argue that it is not liable to Plaintiffs. But,
particularly in light of the district court’s ruling in their favor, there is no reason to believe
that the denial of liability has ever been in bad faith.) Only speculation supports the
allegation that Cervantes and WKI agreed to evade the H-2A requirements. See Pedroza,
600 F. Supp. 2d at 1170; Restatement (Third) of Torts: Liab. for Econ. Harm § 27 cmt. c
(2019) (“A conspiracy is not proven by showing a mere relationship or association
between the accused parties, nor can a finding of conspiracy be based just on
suspicion.”); see also Saylor v. Valles, 63 P.3d 1152, 1159 (N.M. Ct. App. 2002)
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(“Plaintiffs make conclusory statements of a conspiracy, but there are no facts from
which we can directly or inferentially conclude that Defendants agreed to do wrongful
acts.”); Abercrombie v. City of Catoosa, Okla., 896 F.2d 1228, 1230–31 (10th Cir. 1990)
(two threatening statements made to the plaintiff, one by the mayor regarding the
plaintiff’s testimony in an unrelated case against the city, and the other by the city’s
police chief regarding the plaintiff’s wrecker business, did not, in the absence of any
evidence of communications between the two, establish a “meeting of the minds”
showing that the mayor and police chief conspired to bar any wrecker referrals from the
police to the plaintiff’s business). Accordingly, we affirm the entry of summary
judgment in favor of Cervantes on the civil-conspiracy claim for lack of sufficient
evidence of a conspiracy.
D. Additional arguments
Plaintiffs briefly argue on appeal that the district court violated Fed. R. Civ. P.
56(a) by granting summary judgment without discussing Cervantes’s arguments that it
was entitled to summary judgment on the grounds of abandonment and lack of damages.
We see no error, since the district court clearly based the summary judgment on other
grounds. On remand those grounds can still be pursued by Cervantes. We express no
view on their merits.
III. CONCLUSION
We REVERSE the district court’s entry of summary judgment in favor of
Cervantes on Plaintiffs’ claims of breach of contract and violation of 29 U.S.C. § 1822(c)
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and REMAND for further proceedings on those claims. The district court’s summary-
judgment orders are otherwise AFFIRMED.
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