Bobadilla-German v. Bear Creek Orchards, Inc.

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

ELIAS BOBADILLA-GERMAN; JACOBO 
BOBADILLA-GERMAN; VICENTE
FIMBRES ROMERO; MAURO GERMAN-
SANCHEZ; GILBERTO PADILLA-ORTIZ;
VICTOR VILLANUEVA-HERNANDEZ;
DARIO ANGEL VILLEGAS-MEZA,
Plaintiffs-Appellants,
No. 10-35205
and
 D.C. No.
JOSE DE JESUS GAETA BAUTISTA; 1:07-cv-03058-PA
BENJAMIN URBALEJO-RODRIGUEZ,
Plaintiffs,
v.
BEAR CREEK ORCHARDS, INC., a
Delaware corporation,
Defendant-Appellee.


ELIAS BOBADILLA-GERMAN; JACOBO 
BOBADILLA-GERMAN; VICENTE
FIMBRES ROMERO; MAURO GERMAN-
SANCHEZ; GILBERTO PADILLA-ORTIZ; No. 10-35268
VICTOR VILLANUEVA-HERNANDEZ;
DARIO ANGEL VILLEGAS-MEZA,
Plaintiffs-Appellees,
 D.C. No.
1:07-cv-03058-PA
v. OPINION
BEAR CREEK ORCHARDS, INC., a
Delaware corporation,
Defendant-Appellant.


4985
4986 BOBADILLA-GERMAN v. BEAR CREEK
Appeals from the United States District Court
for the District of Oregon
Owen M. Panner, Senior District Judge, Presiding

Argued and Submitted
March 11, 2011—Portland, Oregon

Filed April 12, 2011

Before: Sidney R. Thomas and Susan P. Graber,
Circuit Judges, and James V. Selna,* District Judge.*

Opinion by Judge Thomas

*The Honorable James V. Selna, District Judge for the U.S. Central
District of California, Santa Ana, sitting by designation.
4988 BOBADILLA-GERMAN v. BEAR CREEK

COUNSEL

Mark J. Wilk, Oregon Law Center, Woodburn, Oregon, for
the plaintiffs-appellants/cross-appellees.

Brenda K. Baumgart, Barran Liebman LLP, Portland, Oregon,
for the defendant-appellee/cross-appellant.

Denise G. Fjordbeck, Assistant Attorney General, Appellate
Division, Office of the Oregon Attorney General, Salem, Ore-
gon, for the amicus curiae.

OPINION

THOMAS, Circuit Judge:

In these appeals, we consider whether certain on-site hous-
ing costs of seasonal farm workers can be credited toward the
minimum wage set by Oregon statute. Under the circum-
stances presented by this case, we conclude that they may not.
We also conclude that the workers in this case were entitled
to be paid on the last workday, rather than the following day.
 BOBADILLA-GERMAN v. BEAR CREEK 4989
I

Bear Creek Orchards, Inc., operates peach and pear
orchards in Medford, Oregon. It hires seasonal workers to
pick the orchards over the course of a month-long harvest.
Bear Creek typically hires about 50 workers to pick peaches
and 300 to pick pears.

In recent years, at least three-fourths of Bear Creek’s sea-
sonal workers have been recruited from the San Luis, Ari-
zona, area. Once recruited, these workers traveled from their
permanent homes in Arizona to Oregon for the month-long
harvest.

As part of their compensation, workers were offered
optional on-site housing and meals. Bear Creek charged
between five and seven dollars a day for housing and
deducted this amount from the workers’ paychecks and cred-
ited it toward their minimum wage. The company, though,
deducted housing costs from a worker’s paycheck only if he
or she completed a deduction-authorization form. In many
instances, if housing costs were not credited toward the work-
ers’ minimum wage, their wage would have been below the
lawful minimum wage.

During the 2004-2006 harvests, workers were generally
given their final paychecks on the morning after their last day
of work.

II

Several workers filed a class-action lawsuit against Bear
Creek. The class, represented by 12 named plaintiffs, alleged
violations of the Migrant and Seasonal Agricultural Worker
Protection Act, 29 U.S.C. §§ 1801-1872, as well as Oregon’s
minimum wage laws.1 Several plaintiffs, suing individually,
1
The district court exercised supplemental jurisdiction over the state-law
claims under 28 U.S.C. § 1367.
4990 BOBADILLA-GERMAN v. BEAR CREEK
also claimed that Bear Creek violated Oregon law by failing
to pay their wages when due after their employment ended.
The district court held a bench trial and issued its Findings of
Fact and Conclusions of Law.

The district court ruled in favor of the workers on some
claims and in favor of Bear Creek on others. The workers
appeal only one claim. They argue that Bear Creek violated
Oregon’s minimum wage laws by crediting on-site housing
costs toward the workers’ minimum wage. The district court
disagreed, concluding that Bear Creek lawfully credited the
costs because on-site housing was optional and was provided
for the workers’ private benefit. The workers argue on appeal
that the district court misapplied Oregon state law in reaching
this conclusion.

Bear Creek cross-appeals on a different claim. The district
court concluded that Bear Creek violated Oregon law by pay-
ing its workers the day after their last workday. Under Oregon
law, the court concluded, employers must pay seasonal farm
workers on the last workday. The district court awarded the
individual plaintiffs one day’s pay as damages. Bear Creek
argues on appeal that the district court misapplied Oregon
state law in reaching this conclusion.

The district court had jurisdiction over the workers’ federal
claims under 29 U.S.C. § 1854. It had supplemental jurisdic-
tion over the state-law claims under 28 U.S.C. § 1367. We
have jurisdiction over the appeals under 28 U.S.C. § 1291.

III

Following a bench trial, we “review[ ] the district court’s
findings of fact for clear error and its conclusions of law de
novo.” United States v. Bell, 602 F.3d 1074, 1079 (9th Cir.
2010) (citing Crockett & Myers, Ltd v. Napier, Fitzgerald &
Kirby, LLP, 583 F.3d 1232, 1236 (9th Cir. 2009)), cert.
denied, 131 S. Ct. 653 (2010).
 BOBADILLA-GERMAN v. BEAR CREEK 4991
The district court erred when it concluded that Bear Creek
lawfully credited on-site housing costs toward the workers’
minimum wage. The district court properly concluded that
Bear Creek violated Oregon law by paying its workers the day
after their last workday.

A

[1] Oregon law allows employers to deduct from a work-
er’s minimum wage the “fair market value of lodging, meals
or other facilities or services furnished by the employer for
the private benefit of the employee.” Or. Rev. Stat.
§ 653.035(1) (emphasis added). “Private benefit” is defined in
Oregon’s Administrative Rules:

Lodging or other facilities or services are furnished
for the private benefit of the employee when such
lodging or other facilities or services are not required
by the employer. For purposes of this rule, lodging
or other facilities or services are required by the
employer when:

(a) Acceptance of the lodging or other facilities is a
condition of the employee’s employment; or

(b) The expense is incurred by an employee who
must travel away from the employee’s home on the
employer’s business; or

(c) The acceptance of the lodging or other facilities
or services is involuntary or coerced; or

(d) The provision of lodging or other facilities or ser-
vices is necessary in order for the employer to main-
tain an adequate work force at the times and
locations the employer needs them.

Or. Admin. R. 839-020-0025(7).
4992 BOBADILLA-GERMAN v. BEAR CREEK
The district court concluded that none of the four subsec-
tions applied and, as a result, the on-site housing was pro-
vided to the workers for their private benefit and could be
credited toward their minimum wage. In particular, it con-
cluded subsection (b) did not apply because the workers were
not “traveling salesmen temporarily away from home on their
employer’s business.” And it concluded subsection (d) did not
apply because it applies only to “situations where an ‘on call’
employee must reside at employer-furnished housing.” We
hold that subsection (d) applies here; we therefore need not
address the district court’s determination with respect to sub-
section (b).

[2] As the workers and the State of Oregon (as amicus)
argue on appeal, subsection (d) applies here because Bear
Creek would not have been able to maintain its workforce in
the absence of on-site housing. The district court concluded
subsection (d) applies only to on-call workers (e.g., hotel
attendants), but the court did not provide any justification for
why subsection (d) should be read more narrowly than its
plain text. Under the plain text of subsection (d), a court must
simply ask the question—Without the furnished housing,
would the employer be able “to maintain an adequate work
force at the times and locations the employer needs them”?
Or. Admin. R. 839-020-0025(7)(d).

[3] The district court found that Bear Creek’s on-site hous-
ing “facilitate[s] recruitment of migrant harvest workers” and
that “Bear Creek . . . benefits in a variety of ways by offering
employee housing.” But, more than that, the record estab-
lishes that Bear Creek would not be able to “maintain an ade-
quate work force at the times and locations [Bear Creek
needed] them.” Or. Admin. R. 839-020-0025(7)(d). Indeed,
nearly all of the workers lived in the on-site housing.

Bear Creek’s recruiter for 2006, Gumercindo Iboa, stated
that Bear Creek would not be able to acquire the requisite
labor force if it did not offer housing:
 BOBADILLA-GERMAN v. BEAR CREEK 4993
Q: So it’s the inability to fulfill all the labor needs
here that causes Bear Creek to recruit elsewhere?

A: Yes.

Q: Does having labor housing available to workers
help in the recruitment of out of town workers?

A: Absolutely.

Q: How does it help?

A: We are able to hire from outside and be able to,
and, or capable of housing these people in order for
us to get the fruit off the trees.

Q: If you didn’t have the housing, could you get the
labor?

A: No.

Q: Why is that?

A: No housing available for them.

Q: No housing available for them in Medford?

A: Uh-huh. Yes.

Q: So in terms of housing workers, the choice that
workers face comes down to having housing at Bear
Creek or there is no housing?

A: I agree, uh-huh.

And Benny Suarez, Jr., the supervisor in charge of Bear
Creek’s farm labor camps remarked, “[T]he majority of the
[workers] . . . would say if it wasn’t for housing, they
4994 BOBADILLA-GERMAN v. BEAR CREEK
wouldn’t come back.” According to a residential landlord in
the Medford area, who owns approximately 100 residential
units, the rental and hotel market in Medford would probably
not accommodate the 350 or so workers.

In addition to allowing Bear Creek to marshal enough
employees, on-site housing ensures that workers will be ready
to pick peaches or pears in the morning. As Suarez testified
at trial, “It’s a benefit for the employer to have them ready to
go to work.” In his deposition, he explained:

Q: What did you understand to be the benefit that
Bear Creek Orchards receives from having workers
live in the camp?

A: Ah, they are ready when, for work in the morn-
ings, they are ready to go to work.

Q: How does this differ from anybody who lives off
orchard who lives in town or in the area?

A: Well, for sure we know where they are there and
we pick them up in the buses and we can count that
their [sic] is no room for their vehicles to break and
not being there to go to work.

At trial, when asked, “Does the company need to have the
workers in the company housing in order to get the fruit
picked?” Suarez answered, “It’s to—yes.” Similarly, Iboa tes-
tified at trial that on-site housing “cuts us back on absentee-
ism, tardiness and, you know, the workers are available to
us.” In his deposition, Iboa stated: “[W]e don’t have [a] prob-
lem with attendance because they’re always there. . . . I think
that’s the main thing, I mean, they’re always available to us
when work is available.”

[4] The record, then, shows that on-site housing was “nec-
essary in order for [Bear Creek] to maintain an adequate work
 BOBADILLA-GERMAN v. BEAR CREEK 4995
force at the times and locations [Bear Creek needed] them.”
Or. Admin. R. 839-020-0025(7)(d).

Bear Creek, though, maintains the district court correctly
concluded that subsection (d) applies only to on-call workers
and not to its seasonal farmworkers. In support of its argu-
ment, Bear Creek cites three administrative decisions where
the Oregon Bureau of Labor and Industries (“the Bureau”)
applied subsection (d) to on-call-type employees: In re Elisha,
Inc., No. 24-02, 25 BOLI 125 (2003); In re Jewel Schmidt,
No. 08-97, 15 BOLI 236 (1997); In re Rainbow Auto Parts &
Dismantlers, No. 24-91, 10 BOLI 66 (1991). But these deci-
sions do not stand for the proposition that subsection (d)
applies only to on-call employees. As the State argued in its
amicus brief, “While the rule is applicable to ‘on call’
employees, as the district court found, it is also applicable in
other instances, such as the present case, in which the
employer provides lodging because it is otherwise unable to
meet its need for workers.”

Bear Creek also argues that we should look to federal labor
law to determine the meaning of Oregon’s purportedly analo-
gous state laws. Bear Creek maintains that Oregon’s “private
benefit” standard is substantially the same as the Fair Labor
Standards Act’s (“FLSA”) “primarily for the benefit or conve-
nience of the employer” standard. See 29 U.S.C. § 203(m); 29
C.F.R. § 531.3(d).2 This argument fails for two reasons.

First, the wording of the two standards is facially different.
Under Oregon’s “private benefit” standard, the focus of the
inquiry is the employee’s benefit. Or. Rev. Stat. § 653.035;
Or. Admin. R. 839-020-0025. A court must determine
whether housing was provided as a “private benefit” to the
2
29 C.F.R. § 531.3(d) states that “[t]he cost of furnishing ‘facilities’
found by the Administrator to be primarily for the benefit or convenience
of the employer will not be recognized as reasonable and may not there-
fore be included in computing wages.”
4996 BOBADILLA-GERMAN v. BEAR CREEK
employee. Id. Under the FLSA, however, the focus is on the
employer’s benefit. 29 C.F.R. § 531.3(d)(1); Soler v. G. & U.,
Inc., 833 F.2d 1104, 1109-10 (2d Cir. 1987). A court would
have to determine whether housing was provided “primarily
for the benefit or convenience of the employer.” Id. These are
different inquiries.

Second, Oregon has adopted a rule—Oregon Administra-
tive Rule 839-020-0025(7)—specifically defining when hous-
ing is conferred as a “private benefit.” We need not examine
federal labor law, as Bear Creek would have us do, in order
to give meaning to the term “private benefit.” Oregon’s
administrative rules have done that already.

[5] The district court erred in its application of Oregon’s
minimum wage laws. Accordingly, we reverse its decision as
to this issue and hold that Bear Creek violated Oregon law
when it credited on-site housing costs toward its employees’
minimum wage.

B

Bear Creek, on cross-appeal, challenges the district court’s
conclusion that it paid some of its workers a day later than it
should have. We affirm the district court’s decision on this
issue.

[6] Under Oregon Revised Statutes § 652.145:

[I]f an employee has worked for an employer as a
seasonal farmworker, whenever the employment ter-
minates, all wages earned and unpaid become due
and payable immediately. However, if the employee
quits without giving the employer at least 48 hours’
notice, wages earned and unpaid are due and payable
within 48 hours after the employee has quit, or at the
next regularly scheduled payday after the employee
has quit, whichever event first occurs.
 BOBADILLA-GERMAN v. BEAR CREEK 4997
Or. Rev. Stat. § 652.145 (emphasis added).3 The administra-
tive rule implementing this statute provides:

(1) When a seasonal farmworker or seasonal refores-
tation worker terminates employment because of dis-
charge or mutual consent, all wages earned and
unpaid become due and payable on the last day the
employee works.

(2) When a seasonal farmworker or seasonal refores-
tation worker quits employment and gives the
employer at least 48 hours notice of intent to quit, all
wages earned and unpaid become due and payable
on the last day the employee works.

(3) When a seasonal farmworker or seasonal refores-
tation worker quits employment and fails to give the
employer at least 48 hours notice, all wages earned
and unpaid become due and payable within 48 hours
after the employee quits or on the next regularly
scheduled payday, whichever comes first.

Or. Admin. R. 839-001-0440 (emphasis added). In other
words, unless the worker quits and fails to give at least 48
hours’ notice, the phrase “whenever the employment termi-
nates,” Oregon Revised Statutes § 652.145, is taken to mean
“on the last day the employee works,” Oregon Administrative
Rule 839-001-0440.

The district court concluded Bear Creek violated this rule
because the company terminated and paid its workers the day
after their last workday. The district court noted that payment
on the last workday might be “burdensome and costly to
accomplish, but it is possible.”
3
The parties do not dispute that the plaintiffs were “seasonal farm-
workers” within the meaning of Oregon Revised Statutes § 652.145.
4998 BOBADILLA-GERMAN v. BEAR CREEK
Bear Creek acknowledges that it paid its workers one day
after their last workday. But it claims that the district court
erred by applying the rule because the Bureau of Labor and
Industries exceeded its authority when it promulgated Oregon
Administrative Rule 839-001-0440(1). Bear Creek argues that
the rule’s requirement that wages be paid “on the last day the
employee works” is patently inconsistent with the statutory
requirement that wages be paid “whenever the employment
terminates.” Bear Creek’s argument is unpersuasive.

With Oregon Administrative Rule 839-001-0440(1), the
Bureau made clear that it interpreted the phrase “whenever
the employment terminates” to mean “on the last day the
employee works.” Generally speaking, Oregon courts defer to
agency rules. Terway v. Real Estate Agency, 196 P.3d 1022,
1027 (Or. Ct. App. 2008). The level of deference, though,
depends on the “nature of the statutory language in dispute.”
Id. The Oregon Supreme Court has identified three categories
of statutory text, each requiring a different level of appellate
court deference:

The first category consists of “exact terms,” which
require no interpretation because they impart precise
meanings. The second category consists of “inexact
terms,” which embody a complete expression of leg-
islative meaning but are subject to varying interpre-
tations, and the task of the agency and of a reviewing
court is to determine what the legislature intended by
the use of those words. The third category consists
of “delegative terms,” which express “non-
completed” legislation in that the agency is given
authority to refine and execute the generally-
expressed legislative policy. The delegation of
responsibility for policy refinement under a statute
that contains delegative terms is for the agency and
not part of the review function of the court. Rather,
the role of a reviewing court is to ascertain whether
the agency’s decision is within the range of discre-
 BOBADILLA-GERMAN v. BEAR CREEK 4999
tion allowed by the more general policy of the stat-
ute.

Id. at 1027 (citations omitted) (discussing and citing Spring-
field Educ. Ass’n v. Springfield Sch. Dist. No. 19, 621 P.2d
547, 552-55 (Or. 1980).

Here, the statutory term “whenever the employment termi-
nates” is not an exact term—i.e., it does not have a facially
precise meaning. See id. Instead, it is either an inexact or dele-
gative term. See id. Courts afford agencies less deference in
their interpretation of inexact terms than delegative terms. See
id. When an agency interprets an inexact term, the agency
interpretation is reviewed “for errors of law and requires [the
court] to discern the policy underlying the use of those
words.” Id. at 1028. The “court reviews to decide, whether the
agency’s decision is within the legislative policy.” Id. (inter-
nal quotation marks omitted).

[7] Oregon courts have addressed the purpose of similar
wage and hour statutes on several occasions. See, e.g., Bel-
knap v. U.S. Bank Nat’l Ass’n, 234 P.3d 1041 (Or. Ct. App.
2010); Wyatt v. Body Imaging, P.C., 989 P.2d 36 (Or. Ct.
App. 1999) (en banc); Pope v. Judicial Dep’t, 721 P.2d 462
(Or. Ct. App. 1986); Lamy v. Jack Jarvis & Co., 574 P.2d
1107 (Or. 1978). They have observed, for instance:

[T]he “central purpose [of the wage and hour statutes
is] that of assuring that one who works in a master
and servant relationship, usually with a disparity of
economic power existing between himself and his
superior, shall be assured of prompt payment for his
labors when the relationship is terminated.”

Belknap, 234 P.3d at 1048 (quoting Lamy, 574 P.2d at 1111).
Similarly, Oregon courts have concluded that the policy of the
statutes is “to aid an employee in the prompt collection of
compensation due and to discourage an employer from using
5000 BOBADILLA-GERMAN v. BEAR CREEK
its economic superiority as a lever to dissuade an employee
from promptly collecting his agreed compensation.” Stout v.
Citicorp Indus. Credit, Inc., 796 P.2d 373, 375 (Or. Ct. App.
1990) (citing State ex rel. Nilsen v. Or. State Motor Ass’n,
432 P.2d 512, 515 (Or. 1967)).

[8] Here, the Bureau’s rule requiring employers to pay sea-
sonal farmworkers “on the last day the employee works,”
Oregon Administrative Rule 839-001-0440(1), advances the
policy of ensuring “prompt payment for [the seasonal farm-
workers’] labors when the relationship is terminated.” Belk-
nap, 234 P.3d at 1048. Thus, the Bureau’s interpretation of
Oregon Revised Statutes § 652.145—which takes the statu-
tory phrase “whenever the employment terminates” to mean
“on the last day the employe works”—is a valid interpretation
of an inexact term (as well as a delegative term, under the less
stringent standard).

Bear Creek quibbles with the practical implications of the
rule, but, as the district court stated, “The wisdom of the regu-
lation is a judgment to be made by Oregon’s Legislature and
the Commissioner of [the Bureau],” not a reviewing court.

[9] We affirm the district court’s conclusion that Bear
Creek violated Oregon Administrative Rule 839-001-0440(1)
when it paid some of its workers the day after their last work-
day.

IV

For the reasons above, we reverse the district court’s deter-
mination that Bear Creek lawfully credited on-site housing
costs toward its workers’ minimum wage. We affirm its deter-
mination that Bear Creek violated Oregon law by paying
some of its workers the day after their last workday. We need
not and do not reach any other issues urged by the parties.

AFFIRMED in part; REVERSED in part; costs on
appeal awarded to Plaintiffs-Appellants/Cross-Appellees.