On February 15, 2011, the U.S. District Court for the Western District of New York denied a motion to dismiss a complaint by foreign H-2B workers that alleged that their employer violated the minimum wage provisions of the Fair Labor Standards Act ("FLSA") by refusing to reimburse the workers' transportation, visa, and recruitment expenses. Teoba v. Turgreen Landcare LLC, No. 10-6132 (W.D.N.Y. Feb. 15, 2011). In Teoba, the plaintiffs sought to represent a class of H-2B workers who were recruited over a three-year period by Trugreen, a landscape services company, but not reimbursed for the recruitment, visa, and transportation costs they incurred to accept employment. The district court recognized that there was a split of authority on this issue in the circuits but sided with the courts that found FLSA violations for the failure to reimburse these challenged expenses.

The Teoba decision is important for employers in the hospitality and other industries that employ H-2B workers to address seasonal and other labor shortages. In past alerts, we have reported the growing number of criminal prosecutions against staffing companies in this area due to fraud in the application process, and advised hospitality employers to carefully monitor their use of H-2B employees to avoid complicity in these illegal activities. The Teoba decision highlights another potential exposure to employers of these workers under the FLSA and reinforces the need for employers to carefully plan for, control, and oversee the recruitment and employment of these workers.