January 02, 2026|Franchise Frontlines
January 2, 2026 | United States District Court for the Western District of Michigan | Unpublished Opinion
Executive Summary
In an unpublished decision, Judge Paul L. Maloney of the United States District Court for the Western District of Michigan granted in part and denied in part motions to dismiss claims brought by migrant agricultural workers alleging forced labor and trafficking violations under the Trafficking Victims Protection Reauthorization Act (“TVPRA”) and violations of the Migrant and Seasonal Agricultural Worker Protection Act (“AWPA”). The plaintiffs alleged that a recruiter transported them from North Carolina to Michigan under threats related to immigration status and forced them to work long hours harvesting blueberries under substandard housing conditions. The defendant farming entities argued that the complaint failed to plausibly allege their participation in any trafficking venture and that several corporate entities could not be liable due to corporate separateness or lack of involvement. The court rejected most of the defendants’ dismissal arguments, concluding that the plaintiffs plausibly alleged beneficiary liability under the TVPRA and joint employment under the AWPA, while dismissing certain alter-ego theories and some perpetrator-liability claims.
Relevant Background
The plaintiffs were agricultural workers who entered the United States from Mexico in 2017 under the H-2A visa program to work on a farm in North Carolina. According to the complaint, after several weeks they were awakened during the night by a recruiter who informed them that they would be transported to Michigan to work at a blueberry farm. The recruiter allegedly threatened to report the workers to immigration authorities if they refused to travel or complained about the relocation. The workers were transported to Michigan and provided with false identification documents to secure employment with the defendants’ blueberry-harvesting operation.
The complaint alleged that once in Michigan the workers were housed in severely overcrowded conditions and required to work extended shifts harvesting blueberries during the 2017 season. The plaintiffs claimed they worked approximately twelve hours per day without breaks or days off and were paid based on the volume of berries harvested. The recruiter allegedly supervised their work and continued threatening to report the workers’ immigration status if they complained about working conditions.
The plaintiffs filed suit in 2023 against several related farming entities that operated the blueberry-harvesting business. The complaint asserted claims under the TVPRA for forced labor, trafficking, and related violations, as well as multiple violations of the AWPA. The defendants moved to dismiss, arguing that the complaint relied on impermissible group pleading, failed to establish alter-ego liability among the entities, and did not plausibly allege the knowledge or participation required for TVPRA liability.
Decision
The court first addressed whether the complaint improperly relied on “group pleading” by referring to multiple defendants collectively as the “Defendant Enterprise.” The court rejected this argument, explaining that group allegations can satisfy federal pleading standards when the complaint plausibly alleges that multiple entities participated in a common business venture. The court concluded that the allegations describing the defendants’ joint operation of a blueberry-harvesting enterprise provided sufficient notice of the claims.
The court next considered whether certain corporate entities could be held liable under an alter-ego theory. Applying Michigan law, the court concluded that the plaintiffs failed to plausibly allege that two entities formed years after the alleged events were alter egos of the operating companies. Those entities were therefore dismissed from the case. The court also rejected alter-ego liability among several remaining entities because the complaint lacked factual allegations showing that one company used another as an instrumentality to commit wrongdoing.
The court then turned to the TVPRA claims. The plaintiffs asserted both perpetrator liability and beneficiary liability under the statute. The court held that the complaint plausibly alleged beneficiary liability. To state such a claim, the plaintiffs were required to allege that the defendants participated in a venture, knowingly benefited from that participation, and knew or should have known that the venture involved forced labor or trafficking.
Applying the plain meaning of the statute, the court concluded that participation in a venture does not require defendants to personally engage in trafficking activity. Instead, participation can exist where defendants take part in a commercial enterprise that benefits from the labor obtained through coercion. The court found that the complaint sufficiently alleged that the defendants jointly operated a blueberry-harvesting enterprise that relied on the recruiter to obtain a workforce.
The court further concluded that the complaint plausibly alleged that the defendants knowingly benefited from the venture. The plaintiffs alleged that the defendants profited from the labor of the workers harvesting blueberries, charged rent for housing, and collected fees for transportation services.
With respect to knowledge, the court held that the complaint plausibly alleged that the defendants “should have known” about forced-labor conditions within the venture. The allegations described extremely long work hours, overcrowded housing conditions, and alleged failures in the defendants’ hiring and oversight practices. The court concluded that these allegations were sufficient at the pleading stage to support an inference that the defendants failed to implement policies adequate to prevent forced labor within their operations.
The court also held that the complaint plausibly alleged that the defendants could be treated as a single employer for purposes of the TVPRA analysis and that the recruiter’s actions could potentially be attributed to the defendants through agency principles. The plaintiffs alleged common ownership, shared management, and centralized control over labor relations across the various entities. Those allegations were sufficient at the pleading stage to support a theory that the companies operated as an integrated enterprise.
The court reached a different conclusion with respect to perpetrator liability under certain TVPRA provisions. The court held that the complaint failed to plausibly allege that the defendants themselves knowingly committed the forced-labor violations independent of the recruiter’s conduct. Accordingly, those claims were dismissed.
Finally, the court addressed the AWPA claims. The defendants argued that the plaintiffs were excluded from the statute’s protections because they entered the United States under the H-2A visa program. The court rejected this argument at the pleading stage, finding that the plaintiffs plausibly alleged that their H-2A employment relationship had ended before they began working in Michigan.
The court then applied the economic-realities framework used in Fair Labor Standards Act cases to determine whether the defendants were joint employers. Considering factors such as control over work schedules, supervision of harvesting activities, provision of equipment, and the integral role of the plaintiffs’ work in the defendants’ blueberry business, the court concluded that the complaint plausibly alleged joint employment. As a result, the AWPA claims survived dismissal.
Looking Forward
This decision reflects the continued expansion of civil TVPRA litigation into business-operation contexts involving labor supply chains. Although the allegations in this case are unusual and remain unproven, the opinion illustrates how courts may analyze beneficiary liability where an enterprise allegedly profits from labor obtained through coercive conduct by an intermediary. The court’s reasoning demonstrates that plaintiffs may attempt to frame ordinary business relationships as “participation in a venture” when the enterprise allegedly benefits from labor supplied through a recruiter or contractor. The decision also shows how allegations of operational oversight failures, including hiring practices and housing conditions, may be used to support claims that a company “should have known” about potential forced-labor violations.
For franchisors and other brand-based systems, the case illustrates the types of theories plaintiffs increasingly attempt to advance in litigation involving multi-entity business structures. Plaintiffs frequently rely on agency concepts, integrated-enterprise allegations, and joint-employment frameworks to attribute the conduct of intermediaries to multiple companies within a corporate structure. At the same time, the court’s dismissal of several alter-ego and perpetrator-liability claims demonstrates that courts continue to require factual allegations linking each entity to the alleged misconduct rather than accepting broad assertions of collective responsibility. The opinion therefore provides a useful illustration of how courts balance expansive statutory remedies against traditional corporate-law principles when evaluating complex operational relationships at the pleading stage.
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.
