1156 15th Street, NW, Suite 1020, Washington, DC 20005 202/296-9680 Coalition for Sensible Farmworker Protection December 21, 1994 Lynn R. Goldman, M.D. Assistant Administrator Office of Prevention, Pesticides and Toxic Substances and Steven A. Herman Assistant Administrator Office of Enforcement and Compliance Assurance U.S. Environmental Protection Agency 401 M Street, S.W. Washington, D.C. 20460 RE: Formal Clarification of EPA Policy Regarding Responsibility and Liability Standards Under the Worker Protection Standards Dear Ms. Goldman and Mr. Herman: We are responding to your letter to Richard Kirchhoff, Executive Vice President and CEO of the National Association of State Directors of Agriculture (NASDA) dated October 7, 1994. In your letter, you addressed a number of concerns regarding responsibility and liability for noncompliance by agricultural entities with the Environmental Protection Agency's (EPA) worker protection standards (WPS), 40 C.F.R. Parts 156 and 170. NASDA and the undersigned organizations, all of whose members are directly or indirectly affected by EPA's implementation and enforcement of the WPS, are appreciative of the clarification you provided on a number of issues raised in NASDA's petition for rulemaking dated July 8, 1994. While concerns remain about a number of issues, we are especially concerned about EPA's policy regarding the responsibility and liability standard to be used in determining the respective liability of agricultural employers, owners, operators and contractors. On pages 1-2 of your letter of October 7 to NASDA, you provided some guidance under Issue 1 (regarding application of the WPS to labor contractors), as to the approach that may be taken in determining whether liability will be joint or individual. However, the standard to be used to determine liability is still unclear. As a result, we respectfully request further clarification of those parts of the rule (40 C.F.R. Part 170) that attempt to define the responsibility and liability of agricultural employers, owners and operators and the contractors whose services they may use. _Employer, Owner, Operator and Contractor Liability Standards Should be Determined on a Case-by-Case Rather than a Strict Liability Basis_ It is common in many areas of agricultural production in the U.S. for growers to use the services of farm labor contractors. The contractors often are independent businesses who provide labor to growers for a fee on a seasonal basis. Contractors are often considered the employers of the workers they provide to growers, while the grower using the services of the contractor is not. In some cases, liability for violations of federal wage and hour and migrant and seasonal worker laws falls exclusively on the contractor. [note #1] While in other cases, liability may be jointly shared by the grower and contractor as joint employers, especially if the grower is actively involved in the control and direction of the workers provided by the contractor. The WPS regulations defining the liability of agricultural employers, owners and contractors appear to make them all jointly liable for violations of the duties established under the regulations. With the limited exception of owners of agricultural establishments who relinquish control of their operations, the WPS regulations appear to impose a strict liability standard upon each entity, regardless of whether they have knowledge of, or involvement in the violation. As discussed more fully below, such a broad liability standard deviates from that under the Fair Labor Standards Act (FLSA) and Migrant and Seasonal Agricultural Worker Protection Act (MSPA) which impose liability for violations under their provisions based upon regulatory factors that measure the totality of the circumstances in each relationship, including the nature and control over the workers and the direct and indirect supervision of the workers. [note #2] The undersigned organizations ask that EPA clarify its interpretation of the responsibility and liability provisions of the WPS regulations to take the same case-by-case approach as the other major federal laws protecting the interests of farm workers. _Current Regulatory Language_ In contrast to the case-by-case determination made in cases of liability under FLSA and MSPA, the definitional section of the WPS regulations broadly defines the term "agricultural employer" to include any person who hires or contracts for the services of workers for any type of compensation, as well as any owner or person responsible for the management of an agricultural establishment (40 C.F.R. Part 170.3). This definition is so broadly written as to arguably hold growers, agricultural employers, owners of agricultural establishments and farm labor contractors jointly responsible and liable in all instances of noncompliance under the duties and violations part of the rule (40 C.F.R. Part 170.7 and 170.9). [note #3] While the definition of "agricultural employer" appears to impose broad liability, there is some ambiguity as to whether it imposes a strict liability standard. In other words, is an owner of agricultural land always liable when a contractor he has hired fails to comply with a duty imposed under the WPS, or only when the owner has knowledge and control over the actions of the contractor? We urge EPA to clarify that the latter approach applies--an agricultural employer should only be liable if it has knowledge and control over the acts or omissions of a contractor it is using. Statements in EPA's WPS rule and subsequent communications to the public suggest that the Agency may exercise discretion by reviewing knowledge and control before determining liability, rather than seeking liability from all parties in every instance. We strongly recommend such an approach if for no other reason than to ensure consistency with other federal employment protections. For example, in the current regulations, the term "owner" is separately defined to include persons who have a present possessory interest in an agricultural establishment. The definition further provides, however, that an owner who has leased an agricultural establishment to another person and granted that person the right and full authority to manage the establishment is not considered the owner for purposes of compliance with the WPS (40 C.F.R. Part 170.3). [note #4] This definition recognizes that an owner who has relinquished control over his property to another who has full authority to manage it should not be held accountable for violations of the WPS of which he had no knowledge or control. The preamble to the proposed WPS addressed this issue and stated that the term "owner" excludes: "a lessor of such property who has no current possessory interest. The broad responsibility of an owner under this proposal is based on _the legal control that the owner possesses over the activities that occur on the property_." (emphasis added). 53 Fed. Reg. 25978 (July 8, 1988). The concept of control is a critical one in the unique agricultural worker setting where workers and contractors operate often in a large agricultural setting beyond easy monitoring of owners and/or controllers of such property. As recognized by the U.S. Department of Agriculture (USDA) in its comments on the final WPS rules, it is unfair to always make the owner or controller of the agricultural establishment liable for the actions of workers. Often the workers are not their employees--they are employees of contractors. As stated in USDA's comments: "Agriculture in most cases is not confined within a controlled or monitored area like many other industries. Making agricultural employers responsible for employees' own safety actions is unrealistic." 57 Fed. Reg. 42473 (Sept. 14, 1992). The above definitions of "owner," as well as comments by EPA and USDA during rulemaking, recognize that control and knowledge are essential elements of a fair liability standard. Moreover, in your October 7 letter to NASDA, you appear to recognize that the joint responsibility standard governing the rule should not be absolute. The letter states that liability will be decided on a case-by-case basis. [note #5] We commend the Agency for taking an enforcement position that appears to avoid seeking strict liability of parties in all cases. [note #6] _EPA Should Adopt a Liability Test Focuses on Control and Knowledge_ While the undersigned are appreciative of EPA's apparent interest in seeking liability on a case-by-case, rather than a strict liability basis, we urge the Agency to set forth clear standards that will govern such liability determinations. We believe that the above-referenced comments and citations suggest a control-based standard and encourage EPA to clarify the standard by issuance of a formal letter or other appropriate document that will provide guidance to both the agricultural employer and contractor, as well as federal and state enforcement officials. We suggest that such a standard should include the elements of control and knowledge - the same elements used to determine liability under the employment laws. As noted in EPA's recent letter to NASDA, there are situations where it will be clear who is in control of compliance with the WPS obligations. Whomever is in control or responsible may be evidenced by agreement of the parties in addition to all of the facts surrounding the relationship. For example, it may be shown that the owner or operator of the agricultural establishment is in a better position than a contractor to assure compliance by workers with the field reentry interval requirements because they controlled the application of the pesticide and had knowledge when it was done. In such an instance, the owner or operator may likely be better able to post the WPS required information at the sprayed location. In other situations, a contractor, who is for FLSA and MSPA purposes, the employer of the workers contracted to perform field harvest work on the agricultural establishment in question, may be in control of compliance with WPS requirements such as personal protective equipment for early entry workers, safety training, decontamination supplies, safety posters and emergency assistance. An agricultural owner or controller should be able to rely upon an agreement or representations by the contractor -- the legal employer of the workers -- that it will comply with commitments to meet these requirements. Moreover, as the employer, only the contractor, rather than the owner/operator, would be in a position of authority to compel the workers to comply with the WPS requirements. _The Proper Role of Contractual Agreements_ Your October 7 letter to NASDA (p.2) suggests that owners and operators can address liability concerns by assigning the WPS obligations of the respective parties in a contract, as well as addressing who, between the parties, should be liable for any WPS violations. Assuming that EPA intends to abide by the agreement between parties as to who should be liable for a particular WPS violation, some owner/operators and contractors undoubtedly would choose to enter into a written agreement. It should be noted, however, that the absence of written contracts between growers and contractors is common in agriculture. We strongly urge EPA to adopt an approach in determining liability that does not require written contracts between the parties or find all parties liable in the absence of a contract. Such an approach would put form over substance and deviate from the traditional approaches taken under FLSA, MSPA and other federal labor laws where the totality of circumstances surrounding the relationship in question are reviewed, rather than the existence of a written agreement. [note #7] A better approach would be to consider elements similar to those contained in MSPA that help determine whether there is joint liability between contractors and owners and controllers of agricultural establishments. Under MSPA's regulations, courts determine whether there is individual or joint liability based on factors such as: the nature and control of workers; the degree of direct and indirect supervision of work; the right to directly or indirectly hire, fire or modify the employment conditions of the workers; and power to determine payment rates and methods and preparation of payroll. [note #8] Central to these regulatory elements are indicia of control of the workers. As discussed above and recognized in EPA's "owner" definition, control should be a key element in assessing liability for WPS violations when property owners/controllers and contractors are involved. If the owner or operator has control, it likely also will have knowledge as to whether WPS requirements are complied with and should be responsible. On the other hand, if there is an arm's length relationship where the owner or operator has no control or knowledge, it would be inherently unfair to impose liability. _The WPS Liability Standards for Agricultural Employers, Owners and Operators Should be Consistent and not Conflict with Other Federal Laws Governing the Agricultural Workplace_ Agricultural employers and owners of agricultural establishments face extensive federal and state regulation of every aspect of their worksites. Compliance with these requirements is a challenge for all agricultural employers. It is almost overwhelming for the smaller family farmer that characterizes much of the labor intensive agriculture that is significantly impacted by the WPS. The expansion of federal regulation in this area increasingly results in conflicting requirements, where growers cannot comply with one federal law without violating another. Such occurrences are not only inherently unfair, they also breed disrespect for the law itself. [note #9] A compelling reason for EPA to avoid imposition of a strict liability standard upon agricultural employers, owners and operators for acts of contractors is to maintain consistency among the federal laws protecting farm workers. If EPA imposes strict liability under the WPS, rather than applying a control and knowledge standard, it will force all agricultural employers, owners and operators to aggressively involve themselves in the minutest details of their contractors' activities to ensure that the contractors are complying with all of the WPS requirements. This will result in micromanagement and intrusive involvement in what might otherwise have been an arm's length contractor relationship. Clearly, under the joint liability standards of MSPA described above, the owner/operator invariably will be jointly liable because it will be forced to control and direct the contractors' workers in all areas where the WPS apply to them. Owners and operators of agricultural establishments should not feel compelled to sacrifice their federal right to maintain independent contractor relationships under MSPA and FLSA in order to try to avoid strict federal liability under the WPS by micromanaging the activities of their labor contractors. The undersigned organizations strongly urge EPA to clearly announce a responsibility and liability standard under the WPS that takes a case-by-case approach and looks to factors that evidence the particular entity's control over and knowledge about the WPS compliance requirements that govern its agricultural establishment. Sincerely yours, American Farm Bureau Federation National Agricultural Aviation Association National Association of State Departments of Agriculture National Council of Agricultural Employers Society of American Florists _Notes_ 1. The Fair Labor Standards Act (FLSA), 29 U.S.C. 201-219, is the federal wage and hour law governing agricultural employers. The Migrant and Seasonal Agricultural Worker Protection Act (MSPA), 29 U.S.C. 801-1872, governs a variety of labor standards for farm workers. MSPA incorporates the joint liability principles from FLSA discussed in more detail below. 2. The regulatory factors under MSPA that determine whether a joint employment relationship (and resultant joint liability) exists are set forth at 29 C.F.R. Part 500.20(h)(4)(ii). 3. The expansive definition of "agricultural employer" in the final rule appears to embody the rationale set forth for joint liability in the preamble to the proposed rule. The preamble to the proposed rule discusses joint responsibility. It states that the intent of the rule is based on the idea that "more than one person may be legally chargeable with the same offense." It further states that the liability scheme involves each person in the chain of management. See WPS Proposed Rule, 53 Fed. Reg. 25979 (July 8, 1988). The rationale given for such a broad approach is to provide incentives for persons to hire employees and engage contractors who are careful and conscientious. The preamble to the proposed rule also discusses contractor liability. It states that an owner of property cannot avoid liability by simply engaging the services of a contractor to perform duties imposed by the rule. An exception is where the contractor's activities occur off the property of the owner where the owner has no control. See, WPS Proposed Rule, 53 Fed. Reg. 25980 (July 8, 1988). 4. The limitation on the liability of an owner who relinquishes control of an agricultural establishment to another is more clearly set forth in the definition of "owner" in the final rule than in the proposed. In the proposed rule (53 Fed. Reg. 26013 (July 8, 1988)), the preamble embraces the concept of liability based on control of the agricultural establishment but the actual definition did not include the control limitation. 5. Letter from Lynn R. Goldman and Steven A. Herman to Richard W. Kirchhoff, Executive Vice President and CEO, NASDA, dated October 7, 1994, pp. 1-2. 6. Such an approach appears consistent with EPA's response to comments in the preface to the final WPS rule wherein it recognized that it would be unfair to penalize employers who spend considerable efforts to comply with the WPS the same as those who tolerate or encourage noncompliance. EPA's comments suggest that they will consider liability on the basis of the equities and facts of each case. 57 Fed. Reg. 38134 (Aug. 21, 1992). 7. We note that EPA's preamble to its proposed WPS rule appears to take this approach by stating that "the Agency does not consider absence of such a contractual provision to be grounds for defense by a contractor to an enforcement action based upon a violation of Part 170 requirements pertaining to any service which he or his employee was engaged to provide." 53 Fed. Reg. 25979 (July 8, 1988). 8. MSPA's regulations governing joint employer liability are set forth at 29 C.F.R. 500.20(h)(4)(ii). The appropriateness of a case by case determination of liability, rather than an approach that would almost invariably result in owner/operator liability under MSPA was recently upheld in the case of _Aimable v. Long and Scott Farms_, 20 F.3d 484 (11th Cir. 1994), cert. denied, 115 S. Ct. 351 (1994). 9. For example, the EPA's Clean Air Act 1990 amendments mandate state implementation plans to reduce employee commuting in vehicles in states and areas determined to be in nonattainment with the Act's requirements. In the major agricultural state of California, the San Joaquin Valley has been declared such an area. The state implementation plans in some cases mandate carpooling arrangements among workers. This mandate, undoubtedly unbeknownst to EPA, forces agricultural employers to require their farm workers to carpool. By so doing, a major federal carpooling exemption from the transportation requirements of MSPA is denied such employers as a result of EPA's Clean Air requirements, imposing substantial compliance and liability issues upon them which are not faced by employers in areas where attainment is not an issue. 42 U.S.C. 7511a(d)(1)(B).