January 02, 2026|Franchise Frontlines
January 2, 2026 | United States District Court for the Western District of Michigan | Opinion on Motions to Dismiss
Executive Summary
In Rojas v. First Pick Farms LLC, 2026 WL 18617 (W.D. Mich. Jan. 2, 2026), Judge Paul L. Maloney addressed motions to dismiss claims under the Trafficking Victims Protection Reauthorization Act (“TVPRA”) and the Migrant and Seasonal Agricultural Worker Protection Act (“AWPA”). Plaintiffs alleged they were coerced into agricultural labor through threats of immigration enforcement and substandard housing conditions and sought to hold multiple related farm entities liable. The court allowed certain TVPRA beneficiary liability claims to proceed, dismissed direct perpetrator claims for lack of plausible allegations of actual knowledge, rejected alter-ego theories as to later-created entities, and permitted AWPA joint-employer claims to move forward under a broad economic realities analysis. Although arising in the agricultural context, the opinion provides guidance on how courts analyze multi-entity structures, venture participation, and knowledge standards at the pleading stage.
Relevant Background
Plaintiffs alleged that after entering the United States under the H-2A program to work in North Carolina, they were transported to Michigan and compelled to work on a blueberry farm operated by multiple related entities. According to the complaint, a supervisor recruited workers, allegedly threatened to report them to immigration authorities if they complained, arranged housing, and supervised their work.
Plaintiffs sued six related entities, alleging violations of the TVPRA, including forced labor under 18 U.S.C. § 1589(a), trafficking under § 1590(a), and beneficiary liability under § 1595(a), as well as violations of the AWPA.
Defendants moved to dismiss, arguing that the complaint constituted improper group pleading, that alter-ego liability was not adequately alleged, that beneficiary liability standards were not met, and that they were not joint employers under AWPA.
Decision
The court declined to import the Sixth Circuit’s criminal definition of “participation in a venture” under 18 U.S.C. § 1591 into the civil beneficiary provision of § 1595. Instead, it applied a plain-meaning interpretation consistent with other circuits, concluding that a “venture” may include a commercial enterprise whose primary purpose is not trafficking.
At the pleading stage, plaintiffs sufficiently alleged that the farm entities participated in a venture with the supervisor by operating the blueberry business, employing him, and benefiting from the labor he recruited. The court emphasized that “participation in a venture” under § 1595 does not require direct involvement in trafficking itself, but requires more than mere failure to detect misconduct.
On the knowledge element, the court distinguished between constructive knowledge (sufficient for § 1595 beneficiary liability) and actual knowledge or reckless disregard (required for certain direct perpetrator claims). Allegations regarding long working hours, substandard housing, and employer awareness were sufficient to plausibly allege constructive knowledge for beneficiary liability, though not sufficient to establish actual knowledge for direct perpetrator liability under § 1589(a). The court dismissed claims under § 1589(b), reinforcing that civil and criminal knowledge thresholds differ.
The court also rejected plaintiffs’ alter-ego theory as to two entities created after the alleged violations. Applying Michigan law, the court emphasized that alter-ego liability requires misuse of the corporate form to commit a fraud or wrong resulting in unjust injury. Because the later-created entities did not exist at the time of the alleged violations and plaintiffs failed to allege misuse of the corporate form, claims against those entities were dismissed.
Turning to AWPA, the court applied both FLSA “economic realities” factors and AWPA-specific regulatory considerations. The court concluded that plaintiffs plausibly alleged joint employment, citing allegations that defendants controlled work schedules, supervised labor through managers, provided housing and transportation, set compensation structure, and operated as an integrated agricultural enterprise. The court reiterated that economic dependence remains the ultimate inquiry and that no single factor is dispositive.
Looking Forward
Although this case arises in an agricultural labor context, its reasoning intersects with broader multi-entity liability principles relevant to franchise and system operators.
Courts continue to interpret “participation in a venture” under the civil TVPRA broadly at the pleading stage, particularly where there is an alleged ongoing commercial relationship. At the same time, this opinion carefully preserves the distinction between constructive knowledge (sufficient for civil beneficiary liability) and actual knowledge or reckless disregard (required for direct perpetrator claims), which meaningfully limits exposure under higher standards.
The decision also confirms that alter-ego theories remain tightly cabined. Corporate separateness will not be disregarded absent specific factual allegations of misuse, and later-created entities are not automatically liable for prior conduct.
Finally, joint-employer analysis under FLSA and AWPA remains expansive and fact-intensive. Operational control over schedules, supervision, housing, and compensation continues to be central to the economic realities inquiry. However, the court’s analysis remains tethered to the specific statutory framework and the alleged facts, and does not suggest that routine operational oversight alone constitutes trafficking participation.
For franchisors and other multi-unit operators, the case reinforces the importance of maintaining corporate separateness, documenting compliance efforts, and clearly delineating the scope of operational authority—particularly when labor contractors or intermediaries are involved.
This article is based solely on the opinion of the Court in this matter. The author has not conducted any independent investigation into the facts. For the avoidance of doubt, each statement related to the law and facts in this article is drawn from the Court’s opinion in this case.
Thomas O’Connell is a Shareholder at Buchalter LLP and Chair of the firm’s Franchise Practice Group. For questions about this article or media inquiries, you can contact Tom at toconnell@buchalter.com.
This communication is not intended to create, and does not create, an attorney-client relationship or any other legal relationship. No statement herein constitutes legal advice, nor should it be relied upon or interpreted as such. This communication is for general informational purposes only and is not a substitute for legal counsel. Readers should not act or refrain from acting based on any information provided without seeking appropriate legal advice specific to their situation. For more information, visit www.buchalter.com.
