Jose Ageo Luna Vanegas v. Signet Builders , Inc .

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 21-2644
JOSE A GEO L UNA V ANEGAS ,
Plaintiff-Appellant,
v.
S IGNET BUILDERS , I NC .,
Defendant-Appellee.
____________________
Appeal from the United States District Court for the
Western District of Wisconsin.
No. 21-CV-54 — James D. Peterson, Chief Judge.
____________________
A RGUED A PRIL 13, 2022 — DECIDED A UGUST 19, 2022
____________________
Before R OVNER , WOOD, and S T. EVE, Circuit Judges.
WOOD, Circuit Judge. Signet Builders, Inc., is a nationwide
construction company that builds commercial, industrial, and
agricultural structures. In 2019, Signet hired Jose Ageo Luna
Vanegas to build livestock confinement facilities in Wisconsin
and Indiana. Luna Vanegas alleges that he regularly worked
more than 40 hours a week, but that Signet refused to pay him
the time-and-a-half overtime rate required by the Fair Labor
Standards Act (FLSA). See 29 U.S.C. § 207(a).

-- 1 of 16 --

2 No. 21-2644
The district court dismissed Luna Vanegas’s complaint,
holding that his construction work fell under the FLSA’s ex-
emption for agricultural work. See 29 U.S.C. § 213(b)(12). But
the question whether this is so is a fact-intensive inquiry that
rarely can be decided solely on the face of a complaint. Be-
cause the facts properly in the record do not demonstrate the
applicability of the exemption beyond debate, we reverse.
I
Luna Vanegas, a Mexican citizen, was hired by Signet to
work in the United States on an H-2A guestworker visa. The
H-2A visa program, which is administered by the United
States Department of Labor (DOL or Department), authorizes
foreign workers to perform “agricultural” work (a term de-
fined by the statute) in the United States on a temporary basis,
if the proposed employer can show that there are too few do-
mestic workers willing and able to do the work needed and
that the use of guestworkers will not undercut local workers’
wages and working conditions. See 8 U.S.C.
§ 1101(a)(15)(H)(ii)(a); 8 U.S.C. § 1188(a)(1). The program is
growing rapidly. In 2010, the Department certified about
79,000 H-2A visas; by 2019, that number swelled to 258,000.
U.S. DEP ’ T OF A GRIC ., ECON . I NFO. BULL. NO. 226, EXAMINING
THE GROWTH IN SEASONAL A GRICULTURAL H-2A LABOR 2
(2021). As the H-2A program has expanded, so have com-
plaints from oversight agencies and advocacy groups that it
is plagued with abuse. See, e.g., U.S. GOV’ T ACCOUNTABILITY
O FF ., GAO-15-154, I NCREASED PROTECTIONS NEEDED FOR
F OREIGN WORKERS (2015).
Luna Vanegas alleges that he and his fellow workers were
victims of that abuse. Because this case was resolved on a mo-
tion to dismiss, we accept all well-pleaded factual allegations

-- 2 of 16 --

No. 21-2644 3
in Luna Vanegas’s complaint as true. See Pavlock v. Holcomb,
35 F.4th 581, 585 (7th Cir. 2022). According to that complaint,
Signet was hired as a subcontractor to build livestock struc-
tures on farms in Wisconsin and Indiana. Luna Vanegas was
assigned to these projects, where his work consisted entirely
of construction of buildings that would later house livestock.
Although he worked on land belonging to farms, he never
had any contact with animals.
Luna Vanegas routinely worked more than 40 hours a
week, but Signet did not pay him extra for his overtime hours.
See 28 U.S.C. § 207(a). He filed a complaint under the FLSA
and then moved for conditional certification of a collective ac-
tion on behalf of all Signet H-2A workers who, like him, were
exclusively assigned to construction work. A wage-theft claim
such as Luna Vanegas’s is straightforward: the plaintiff states
a claim for relief if she alleges that she was owed time-and-a-
half for overtime work but did not receive it.
Signet responded with a motion to dismiss under Federal
Rule of Civil Procedure 12(b)(6). It did not, however, point to
any defect in the initial pleading, nor did it contest the accu-
racy of the description of its payment practices. Instead, it
raised the affirmative defense that Luna Vanegas is an agri-
cultural worker who is exempt from FLSA’s overtime protec-
tions. See 29 U.S.C. § 213(b)(12).
Before we discuss the merits, the procedure Signet fol-
lowed deserves a word or two. Rule 8 of the Civil Rules care-
fully distinguishes between defenses that take the form of de-
nials, covered in subpart (b), and affirmative defenses, ad-
dressed in subpart (c)(1). Rule 8(c)(1) states that “[i]n respond-
ing to a pleading, a party must affirmatively state any avoid-
ance or affirmative defense …,” and provides a nonexclusive

-- 3 of 16 --

4 No. 21-2644
list of such defenses. The defending party must come back
with a “responsive pleading” (i.e., an answer for the defend-
ant, see Rule 7(a)(2)), unless it is raising one of the seven de-
fenses listed in Rule 12(b) as appropriate for a motion. Affirm-
ative defenses do not appear on that list.
It follows from this structure and from the plain language
of Rule 8(c)(1) that an affirmative defense must be raised in
the answer, not by motion. Vazquez v. Indiana Univ. Health,
Inc., 40 F.4th 582, 588 (7th Cir. 2022). Once the pleadings are
closed, any party may move for judgment on the pleadings,
pursuant to Rule 12(c). There is a real consequence to this
structure: it means that a plaintiff’s complaint need not antic-
ipate or refute potential affirmative defenses. The Rule
12(b)(6) motion for failure to state a claim upon which relief
can be granted is limited to situations in which, even taking
the facts as plaintiff portrays them, the law does not confer a
right to relief (the old common-law demurrer). Rarely will the
face of the complaint so clearly prove the opponent’s affirma-
tive defense that immediate dismissal, prior to the filing of an
answer, will be proper. See Hecker v. Deere & Co., 556 F.3d 575,
588 (7th Cir. 2009). As a practical matter, courts have some-
times taken shortcuts, particularly if the complaint leaves no
doubt that there is a good statute-of-limitations or claim-pre-
clusion defense. But it is safer to insist on compliance with the
rules.
The district court thought that the present case was one of
the rare ones in which the plaintiff had pleaded himself out of
court by including “facts that establish an impenetrable de-
fense to its claims” in the complaint. See Tamayo v. Blagojevich,
526 F.3d 1074, 1086 (7th Cir. 2008). It granted Signet’s motion
to dismiss solely because it thought that the complaint

-- 4 of 16 --

No. 21-2644 5
unambiguously showed that Luna Vanegas fell within FLSA’s
exemption for agricultural workers. As we now explain, we
conclude that this is not the case.
II
A
Since 1938, the FLSA has required employers to pay eligi-
ble workers at least one and a half times their regular rate of
pay for time worked beyond the 40-hour workweek. See 29
U.S.C. § 207(a). But when Congress passed the law, influential
lawmakers from the South demanded that the Act exclude
farmworkers, thereby ensuring that Southern farms could
continue paying low wages to their predominantly Black ag-
ricultural crews. See Marc Linder, Farm Workers and the Fair
Labor Standards Act: Racial Discrimination in the New Deal, 65
TEX . L. R EV. 1335, 1371–80 (1987). Today, the FLSA’s overtime
protections still do not apply to “any employee employed in
agriculture.” 29 U.S.C. § 213(b)(12).
Section 3(f) of the FLSA defines “agriculture” for these
purposes to mean:
[1] farming in all its branches and among other
things includes the cultivation and tillage of the
soil, dairying, the production, cultivation,
growing, and harvesting of any agricultural or
horticultural commodities (including commod-
ities defined as agricultural commodities in sec-
tion 1141j(g) of Title 12), the raising of livestock,
bees, fur-bearing animals, or poultry, and [2]
any practices (including any forestry or lumber-
ing operations) performed by a farmer or on a
farm as an incident to or in conjunction with

-- 5 of 16 --

6 No. 21-2644
such farming operations, including preparation
for market, delivery to storage or to market or
to carriers for transportation to market.
29 U.S.C. § 203(f).
Although this definition does not use formal subsections,
it covers two types of agricultural activities, which we have
marked as [1] “primary agriculture” and [2] “secondary agri-
culture.” See Bayside Enterprises, Inc. v. NLRB, 429 U.S. 298, 300
(1977). Primary agriculture (our part 1) refers to activities
ranging from “farming in all of its branches,” to “the raising
of livestock, bees, fur-bearing animals, or poultry.” 29 U.S.C.
§ 203(f). Secondary agriculture (our part 2) sweeps in “any
practices ... performed by a farmer or on a farm as an incident
to or in conjunction with such farming operations, including
preparation for market, delivery to storage or to market or to
carriers for transportation to market.” Id. Everyone agrees
that Luna Vanegas was not performing primary agricultural
work and that he performed work on a farm. Thus, the issue
before us is whether Luna Vanegas was engaged in secondary
agriculture—that is, does his complaint plead facts that une-
quivocally show that his construction work was “an incident
to or in conjunction with” the farming operations of the live-
stock farmers on whose property he built the enclosures.
B
In approaching that question, we must recall at the outset
that Signet bears the burden of proving that the agricultural
exemption applies. See 29 C.F.R. § 780.2. Like all FLSA exemp-
tions, the agricultural exemption must be “narrowly con-
strued against the employer seeking to assert [it]” and

-- 6 of 16 --

No. 21-2644 7
“limited to those who come plainly and unmistakably within
[its] terms and spirit.” Id. (internal quotations omitted).
We look for guidance from the Department, which has is-
sued regulations to aid in that inquiry. See 29 C.F.R.
§§ 780.100–105, 780.141–147. We then consult court cases con-
struing the agricultural exemption. Throughout, we bear in
mind the Supreme Court’s recognition that “the line between
practices that are and those that are not performed as an inci-
dent to or in conjunction with such farming operations is not
susceptible of precise definition.” Holly Farms Corp. v. NLRB,
517 U.S. 392, 408 (1996) (quoting 29 C.F.R. § 780.144) (cleaned
up).
An interpretive rule explains that work falls within the ag-
ricultural exemption “only if it [a] constitutes an established
part of agriculture, [b] is subordinate to the farming opera-
tions involved, and [c] does not amount to an independent
business.” 29 C.F.R. § 780.144. All three conditions must be
met before an employer will qualify for the exemption. We
focus on the third, which suffices to dispose of this appeal.
Section 780.145 of the DOL regulations establishes a fact-
driven, totality-of-the-circumstances test to determine
whether Signet’s construction business “amount[s] to an in-
dependent business” apart from agriculture:
The character of a practice as a part of the agri-
cultural activity or as a distinct business activity
must be determined by examination and evalu-
ation of all the relevant facts and circumstances
in the light of the pertinent language and intent
of the Act. The result will not depend on any
mechanical application of isolated factors or
tests. Rather, the total situation will control …

-- 7 of 16 --

8 No. 21-2644
Thus, the general relationship, if any, of the
practice to farming as evidenced by common
understanding, competitive factors, and the
prevalence of its performance by farmers (see
§ 780.146), and similar pertinent matters should
be considered.
29 C.F.R. § 780.145 (citing Maneja v. Waialua Agric. Co., 349 U.S.
254, 264 (1955) (“[I]t is clear that we must look to all the facts
surrounding a given process or operation to determine
whether it is incident to or in conjunction with farming.”)).
Signet has ignored the fact-driven, totality-of-the-circum-
stances test set forth in section 780.145. Instead, it relies exclu-
sively on 29 C.F.R. § 780.136, which says that “[e]mployees
engaged in the erection of silos and granaries” are “examples
of the types of employees of independent contractors who
may be considered employed in practices performed ‘on a
farm.’” Signet argues, and the district court agreed, that Luna
Vanegas’s work building livestock enclosures is analogous to
building silos or granaries used by farms, and so it must be
agricultural labor. As Signet would have it, our analysis
should begin and end there.
But that very regulation goes on to explain that there is
more to the inquiry. The next sentence reads:
Whether such employees [including those erect-
ing silos and graneries] are engaged in “agricul-
ture” depends, of course, on whether the prac-
tices are performed as an incident to or in con-
junction with the farming operations on the par-
ticular farm, as discussed in §§ 780.141 through
780.147; that is, whether they are carried on as a

-- 8 of 16 --

No. 21-2644 9
part of the agricultural function or as a sepa-
rately organized productive activity (§§ 780.104
through 780.144).
29 C.F.R. § 780.136. This additional language shows us that
Signet’s proposed test for agricultural labor elides the key
question in this case. Luna Vanegas agrees that he was em-
ployed “on a farm,” but that alone is not enough to bring him
under the agricultural exemption. See 29 C.F.R. § 780.144. Ra-
ther, we must ask whether his construction work was “carried
out as a part of the agricultural function or as a separately or-
ganized productive activity” as defined by related regula-
tions. See id.; see also 29 C.F.R. § 780.104 (“The question is
whether the activity in the particular case is carried on as part
of the agricultural function or is separately organized as an
independent productive activity.”). If Luna Vanegas’s work
was part of “a distinct business activity” from farming, the
agricultural exemption does not apply. 29 C.F.R. § 780.145.
The DOL regulations provide a non-exhaustive list of fac-
tors that help resolve that issue. See 29 C.F.R. §§ 780.141–147.
They establish a nuanced, fact-intensive inquiry that is ill-
suited for resolution based only on the allegations of a com-
plaint. One regulation explains that the meaning of “agricul-
ture” in the FLSA changes over time with the increasing spe-
cialization of labor. See 29 C.F.R. § 780.104. Work that once
was routinely performed by farmers can evolve into some-
thing “separately organized as an independent productive ac-
tivity.” Id. For example, at an earlier point in American his-
tory, farmers typically produced their own fertilizer “as part
of their normal agricultural routine.” Id. But in time, home-
made fertilizers were replaced by mass-produced factory

-- 9 of 16 --

10 No. 21-2644
fertilizers, thus making factory fertilizer an “independent
productive function[], not agriculture.” Id.
Another relevant fact is whether the work the plaintiffs
performed is “ordinarily performed” by farmers themselves
or by independent businesses hired by those farmers. 29
C.F.R. § 780.146 (listing “the extent to which such a practice is
ordinarily performed by farmers incidentally to their farming
operations” as a relevant factor); see also 29 C.F.R. § 780.145
(listing “relevant facts” including “the prevalence of [a prac-
tice’s] performance by farmers”). If farmers typically hire in-
dependent contractors such as Signet to build livestock enclo-
sures, that would be a “significant indication” that building
those enclosures is not agricultural work within the meaning
of section 3(f). 29 C.F.R. § 780.146.
At this stage in the litigation, this factor strongly favors
Luna Vanegas. Nothing in the complaint addresses whether
farmers in the modern agricultural economy ordinarily build
their own large livestock enclosures or hire separately orga-
nized construction companies to do so—facts relevant only to
the affirmative defense. As we explained above, so long as
Luna Vanegas’s complaint does not admit facts that “establish
an impenetrable defense to its claims[,]” Hecker, 556 F.3d at
588, the agricultural exemption does not justify dismissal.
Second, courts must ask whether Signet’s construction
contracts are “in competition with agricultural or with indus-
trial operations.” 29 C.F.R. § 780.146; see also 29 C.F.R.
§ 780.145 (“[C]ompetitive factors … should be considered.”).
If a business’s primary competitors are not farming opera-
tions, then work performed for that business is unlikely to fall
within the agricultural exemption. Again, this factor favors

-- 10 of 16 --

No. 21-2644 11
Luna Vanegas. Nothing in the complaint indicates that Signet
competes with farms, rather than other construction firms.
A third relevant consideration is the division of labor and
supervision between a contractor’s employees and those of
the farmer. If a farm’s employees “do not assist” with work
performed by a contractor’s workers, or if there is “minimal
overlap” between a farmer’s work and a construction crew’s
work, or if a contractor’s employees “work as a unit” inde-
pendently from farmers, the logical implication is that the
contractor’s work does not fall within the section 3(f) exemp-
tion. See Holly Farms, 517 U.S. at 403–04; see also 29 C.F.R.
§ 780.145 (listing “the extent to which the practice is per-
formed by ordinary farm employees[,] the amount of inter-
change of employees between the operations,” and “the de-
gree of separation established between the activities” as rele-
vant factors).
As before, nothing in the complaint supports Signet on
this point. Luna Vanegas alleges that he was hired by, paid
by, and worked exclusively for Signet. The complaint does
not even hint that Luna Vanegas was supervised by or
worked side-by-side with employees of the farms with which
Signet had contracts. If such evidence exists, Signet may de-
velop it later in the case. For now, this factor favors Luna
Vanegas.
There is also a hodge-podge of other relevant factors:
• the “common understanding” of farming;
• the relative amount of an employer’s capital “invested
in land, buildings and equipment for [] regular farm-
ing operations” versus the amount invested in other

-- 11 of 16 --

12 No. 21-2644
commercial enterprises, such as construction or manu-
facturing;
• the “degree of industrialization involved”;
• the “amount of payroll” a particular employer spends
on regular farming activity relative to other work; and
• the “amount of revenue” a particular employer re-
ceives from regular farming activity relative to other
sources of income.
See 29 C.F.R. § 780.145. Although it is not relevant to this case,
courts considering the scope of secondary agriculture often
ask whether the work transforms an agricultural product (e.g.,
corn) into an industrial product (e.g., canned corn). If so, that
work probably falls outside the agricultural exemption. See
29 C.F.R. § 780.146. This list of factors, moreover, is not ex-
haustive, because the DOL also instructs us to look at “similar
pertinent matters.” 29 C.F.R. § 780.145. Finally, the regula-
tions caution that “the necessity of the activity to agriculture”
does not determine the outcome, and so the fact that farms
may need to build livestock enclosures before raising live-
stock does not transform construction work into agricultural
work. See 29 C.F.R. § 780.104.
We now turn briefly to some court decisions examining
the line between activities within and outside the exemption.
In Maneja v. Waialua Agricultural Co., the Supreme Court held
that sugar plantation workers engaged in transporting cane
from the fields to the processing plant and workers engaged
in repair of the tools used in farming did qualify for the agri-
cultural exemption, but (based on a comprehensive look at
the market) those in the sugar processing (“milling”) plant
did not. See 349 U.S. at 270. (The Court did find that the latter
workers fell under a different exemption, but it was specific

-- 12 of 16 --

No. 21-2644 13
to sugar operations and thus irrelevant to our case.) The next
year, the Court held that tobacco bulkers are not agricultural
workers in part because “tobacco farmers do not ordinarily
perform the bulking operation.” Mitchell v. Budd, 350 U.S. 473,
481 (1956). Bulking, the Court explained, is the process of
placing dried tobacco leaves into large piles (3,500 to 4,500
pounds apiece) for the fermentation process, after the leaves
have been picked and dried. Id. at 475. It thus counts as pro-
cessing, not agriculture. The Court reiterated this approach in
Holly Farms, which held that workers who captured free-
range chickens for transport to a slaughterhouse were not
“agricultural workers” for purposes of the FLSA. 517 U.S. at
403; see also Hodgson v. Idaho Trout Processors Co., 497 F.2d 58,
60 (9th Cir. 1974) (holding that workers who clean and pro-
cess fish are not agricultural workers because they “work ex-
clusively for the processing plant, there is a formal separation
and division of function between the plant and the farms, and
the farms do not supervise the plant, nor do they hire, fire, or
pay [the plant’s] employees”).
Both the regulations and these decisions convince us that
the district court adopted too narrow a focus when it looked
only at the work that Luna Vanegas performed as an em-
ployee, omitting consideration of questions such as whether
his employer was engaged in a productive activity separately
organized from farming. Its approach is at odds with the ob-
servation in Holly Farms that it would be “sensible” to
“home[] in on the status of the [workers’] employer” in the
course of holding that workers who caught free-range chick-
ens to be taken to slaughter were not agricultural employees.
Holly Farms, 517 U.S. at 404.

-- 13 of 16 --

14 No. 21-2644
C
In sum, work falls within the FLSA secondary agricultural
exemption only if it is both “performed by a farmer or on a
farm” and if it “does not amount to an independent business.”
29 C.F.R. § 780.144. The Department’s regulations establish a
fact-intensive, totality-of-the-circumstances test to determine
whether work performed on a farm is agricultural or if it is an
independent business. They list many factors that bear on that
analysis. Signet bears the burden of proving that the agricul-
tural exemption applies, 29 C.F.R. § 780.2, and it has not car-
ried that burden on the pleadings (we of course have nothing
to say about how this case might develop further down the
line).
All a complaint must do is state a plausible narrative of a
legal grievance that, if proved, would entitle the plaintiff to
relief. See Swanson v. Citibank, N.A., 614 F.3d 400, 404 (7th Cir.
2010). In the FLSA context, a plaintiff will typically meet this
bar by alleging that she was owed wages and that those wages
were never paid. That is what Luna Vanegas has done here.
A complaint need not anticipate—much less refute—a possi-
ble affirmative defense. See U.S. Gypsum Co. v. Indiana Gas Co.,
Inc., 350 F.3d 623, 626 (7th Cir. 2003). In rare circumstances, a
plaintiff may “plead[] himself out of court” by admitting all
of the essential elements of an affirmative defense in his com-
plaint, Hecker, 556 F.3d at 588, but Luna Vanegas has not fallen
into that trap. The complaint says little about most of the reg-
ulatory factors. Nothing in Luna Vanegas’s complaint con-
cedes that farmers ordinarily build their own livestock struc-
tures in the modern economy, that there was significant over-
lap between the work of Signet’s construction employees and
the work of people employed by the client farms, or that

-- 14 of 16 --

No. 21-2644 15
Signet has invested significant portions of its capital in agri-
cultural operations. We do not even know what farms Luna
Vanegas worked on. His case, in short, was not a candidate
for disposition under Rule 12(b)(6).
D
We briefly address two more points before we conclude.
First, Signet argues that because the Department’s Office of
Foreign Labor Certification approved Luna Vanegas’s H-2A
visa, the Department has already decided that this work is ag-
ricultural. Congress has given DOL the task of issuing regu-
lations spelling out what kinds of work qualify for an H-2A
guestworker visa. The statute says that those regulations
must include, but are not limited to, agricultural workers as de-
fined by FLSA section 3(f). See 8 U.S.C. § 1101(a)(15)(H)(ii)(a)
(emphasis added). The current regulations define agricultural
labor for purposes of the H-2A program to include “agricul-
tural labor” as defined in FLSA, “agricultural labor” as de-
fined (more broadly) in the Tax Code, logging, and pressing
apples for cider. 29 C.F.R. § 501.3(b). In other words, the crite-
ria for receiving an H-2A visa are broader than the FLSA ag-
ricultural exemption, and so the fact that Luna Vanegas was
admitted to the country on this type of visa does not automat-
ically mean that the FLSA’s agricultural exemption applies.
Finally, Signet argues that many of Luna Vanegas’s argu-
ments are forfeited because they were made in a more sophis-
ticated form on appeal than they were before the district
court. This is a non-starter. A party has the right to refine its
argument on appeal. So long as Luna Vanegas “consistently
presented the heart” of his case before the district court, his
arguments are not forfeited even if “the nuances” of that ar-
gument change on appeal. Fox v. Hayes, 600 F.3d 819, 832 (7th

-- 15 of 16 --

16 No. 21-2644
Cir. 2010). Luna Vanegas did all that he needed to do—he con-
sistently made his core argument that he was misclassified as
an agricultural worker at every stage in the proceedings.
There was no forfeiture here.
III
Employers invoking the agricultural exemption to the Fair
Labor Standards Act bear the burden of showing that the af-
firmative defense applies. This is difficult, at best, using a mo-
tion under Rule 12(b)(6), and Signet has not carried that bur-
den here. We REVERSE the judgment of the district court and
REMAND for further proceedings consistent with this opinion.

-- 16 of 16 --