United States District Court, E.D. Pennsylvania
Austin McHugh, United States District Judge.
a case rooted in allegations of labor trafficking where the
issue presently before the Court is whether a release between
the parties bars the Plaintiff's claims, or is
unenforceable on grounds of unconscionability. Plaintiff Jose
Enrique Castillo Chaidez, a Mexican national, has sued under
the Trafficking Victims Protection Act (TVPA), 18 U.S.C.
§§ 1581-97, and the corresponding Pennsylvania
anti-human trafficking law, known as Act 105, 18 Pa. C.S.
§§ 3001-72. He was recruited by Defendant Carl
Hemphill to work for his trucking company through the H-2B
temporary guest-worker visa program. Castillo alleges that,
in the course of his employment, Defendants Carl and Mariana
Hemphill mistreated him by directing him to undertake
activities that went well beyond the scope of his agreed upon
job responsibilities, wrongfully withholding money that he
was entitled to, lodging him in overcrowded and unsanitary
housing, and threatening him with arrest and permanent
expulsion from the H-2B program if he refused to acquiesce to
these conditions. In their Motion for Summary Judgment,
Defendants do not address the merits of Castillo's
allegations, but rather make two threshold arguments: (1)
that Castillo's claims against Carl Hemphill and KAH
Transportes are barred by a mutual release agreement signed
by Castillo and Carl Hemphill months after the end of their
employment relationship, and (2) that Castillo has not
demonstrated a sufficient factual basis to support a finding
of liability for Mariana Hemphill or the other Hemphill
at the record in the light most favorable to Castillo, the
non-moving party, I find that there are genuine disputes of
material fact as to whether the mutual release agreement is
enforceable because of unconscionability. Furthermore, there
are genuine disputes of material fact as to whether the
related Hemphill and corporate Defendants may be liable for
the harms alleged by Castillo. Defendants' Motion will be
Hemphill exercises control over a number of companies
involved in landscaping, with an emphasis on the sale and
transportation of mulch. These companies all operate out of
one shared address, 1720 South State Road, Upper Darby, PA.
Carl Hemphill is the sole owner of KAH Transportes, President
of Operations of Three Seasons, and an officer at Delco Mulch
and Supply and MJC Labor Solutions. C. Hemphill Dep. I at
29:13-17, 30:2-6, 33:15-23, Pl.'s Ex. 3, ECF 29-3.
Mariana Hemphill is the owner of Three Seasons but does
budget reconciliations for all of the above companies. C.
Hemphill Dep. I at 30:7-10; Ma. Hemphill Dep. 58:19-59:4,
Pl.'s Ex. 11, ECF 29-3. Gabriela Orozco is employed by
all four companies as an office manager, and all four
companies use the same phone number and credit card. Orozco
Dep. 34:3-13, 115:19-24, 123:10-22, Pl.'s Ex. 9, ECF
29-3. One of those companies, KAH Transportes, hauls mulch on
behalf of its customers, which include some of the other
companies managed by Carl Hemphill, such as Delco Mulch. C.
Hemphill Dep. I at 37:10-39:16.
2015, Carl Hemphill successfully applied for three H-2B visas
in order to hire temporary guest workers to be employed at
KAH. C. Hemphill Dep. I at 126:7-10. Carl Hemphill travelled
to Culiacan in Sinaloa, Mexico in early 2015 to recruit
workers to fill the positions. C. Hemphill Dep. I at
126:19-127:3. While in Sinaloa, Carl Hemphill met Castillo at
a job fair and offered him one of the open positions at KAH,
which Castillo accepted. C. Hemphill Dep. I at 126:16-17;
Pl.'s Dep. 11:17-22, Pl.'s Ex. 1, ECF 29-3.
between the parties began shortly after Castillo was hired at
the fair. Castillo's purported understanding after the
job fair was that he would be flown by the Defendants to the
United States shortly after he received his visa, which he
was able to obtain on March 10, 2015, and that his contract
would begin on March 5, 2015. Compl. ¶ 93, ECF 2; C.
Hemphill Dep. I at 136:20-137:7, 140:24-141:13; Pl.'s Ex.
4, ECF 29-3. There was ultimately over a month-long gap
between Castillo securing his visa, however, and
Defendants' arranging his flight to the United States,
leading Castillo to take out loans to cover his living
expenses for the interim period. Defendants ultimately
secured a flight for Mr. Castillo into the United States
arriving on April 19, 2015. Pl.'s Ex. 10, ECF 29-3.
arriving at Philadelphia International Airport, Castillo was
picked up by Carl Hemphill and taken to KAH's
headquarters at 1720 South State Road. Castillo alleges that
Mariana Hemphill was there and confiscated his passport; when
his Social Security card arrived days later, the Employer
Defendants allegedly held on to that as well. Pl.'s Dep.
84:6-19, 85:2-9. Castillo did not receive his first paycheck
for nearly a month into the job, further placing him in
debt. When he finally did receive his initial
paycheck, Castillo alleges that he was not compensated for
his first three days of work while he was being trained on
his driving routes. Pl.'s Dep. 19:7-23; Asencio Dep.
18:7-19:3, Pl.'s Ex. 19, ECF 29-4. In his complaint and
deposition, Castillo details long work days, in which he was
not only required to haul materials for KAH but engage in
other kinds of manual labor for Defendants and their business
interests without compensation, such as cleaning trash in the
yard, laying concrete, and building furniture for Defendants.
Pl.'s Dep. 43:19-45:12, 47:12-25. Carl Hemphill contends
that Castillo's responsibilities were limited to truck
transportation. C. Hemphill Dep. I at 179:23-180:12.
was also distressed by his housing conditions. As a part of
their contractual agreement, Carl Hemphill had agreed to
provide housing for Castillo, with rent being deducted
directly from Castillo's wages. Pl.'s Dep.
38:21-39:4; Pl.'s Ex. 6 at ¶ B, ECF 29-3. According
to Castillo, the house that Carl Hemphill provided to him was
in bad enough shape to appear “abandoned.”
Pl.'s Dep. 111:25. More specifically, Castillo alleges
that there was sufficient mold and dirt in the bathroom that
he put plastic over his feet when showering to avoid
infection; the apartment was overcrowded; Castillo's
mattress was overrun with bedbugs; and there were rats and
cockroaches in the kitchen. Pl.'s Dep. 111:23-112:14.
Castillo reportedly complained to Carl and Mariana Hemphill
about the conditions multiple times throughout the course of
his employment, but according to him no remedial action was
taken by the Defendants. Pl.'s Dep. 22:4-7.
himself subject to significantly more difficult living,
working, and financial conditions than he had anticipated,
Castillo decided it would be best to return to Mexico.
Castillo expressed this desire to return to the Defendants
but was allegedly warned that he would suffer negative
consequences if he chose to leave. For instance, Mariana
Hemphill reportedly told Castillo that he “could get in
trouble with the police” if he did not remain for the
duration of his contract, which was supposed to last through
December 2015. Pl.'s Dep. 113:24-114:7. She also
allegedly stated she would “close the door” to
his participation in the H-2B visa program in the future.
Pl.'s Dep. 61:4-20. Castillo contends he took these
threats seriously, particularly since his coworkers informed
him that Mariana Hemphill had previously worked at the
Mexican consulate and continued to have influence with them.
Pl.'s Dep. 61:22-62:3. Castillo was also told that other
employees had been arrested when they tried to leave.
Pl.'s Dep. 62:8-63:9.
maintains that he continued to work for Defendants due to his
fear of reprisals, but eventually found the situation
untenable. On July 9, 2015, Castillo called the Human
Trafficking Hotline for help. Pl.'s Ex. 23, ECF 29-4. The
following day, Castillo went to the office to pick up what
would be his last paycheck. What happened next is hotly
disputed by the parties. Castillo says he was given his
passport and Social Security card by Gabriela Orozco, the
office manager, and instructed to wait for Carl Hemphill in
order to receive his paycheck. Answer ¶¶ 233-35,
ECF 5; Pl.'s Dep. 115:3-17. When Carl Hemphill arrived,
he refused to provide Castillo his paycheck and then called
the police on Castillo. Answer ¶ 247; C. Hemphill Dep. I
at 226:9-229:5. Carl Hemphill testified that, to the
contrary, Castillo became aggressive toward him and told him
that he would “pay in blood” for his failure to
produce the paycheck. C. Hemphill Dep. I at 228:7-229:5.
Regardless of which version of events one adopts, it is
undisputed that the police eventually arrived and arrested
Castillo, charging him with trespass and terroristic threats.
Pl.'s Exs. 24-25, ECF 29-4, ECF 29-5; Pl.'s Ex. 20 at
¶ 20, ECF 29-4.
affidavit of probable cause from the arresting officer
reflects that when he arrived, he understood that Castillo
was on the premises to collect his last paycheck, and there
was a disagreement over whether he still had company
property. According to Hemphill, Castillo still had access to
a company truck and equipment. When the officer advised him
that he must leave or be arrested, Castillo put out his arms
and surrendered to the officer. Pl.'s Ex. 25. The
affidavit further reflects that the officer personally
witnessed no threat, and that Hemphill later went to the
police to state Hemphill interpreted a Spanish expression
Castillo had used as a threat on his life. A coworker helped
to pay Castillo's $500 bail to release him from jail.
Pl.'s Ex. 20 at ¶ 21.
did not return to Mexico upon being released, because he was
still waiting on the final paychecks owed to him by
Defendants and had been relying on that income to purchase
his transportation. Pl.'s Dep. 114:8-12. He also wanted
to resolve the criminal charges pending against him. If he
left the country before the completion of the criminal
process, Castillo was afraid he would not be able to
participate in the H-2B program going forward nor resume his
prior cross-border trucking work in Mexico. Pl.'s Dep.
114:8-115:2. It seems clear that Castillo did not receive the
money owed to him by Defendants until October 14, 2015, the
day of his criminal hearing, when he signed the release
agreement with Carl Hemphill. Ex. 8 to Def.'s MSJ at
¶¶ 1, 4, ECF 27; C. Hemphill Dep. I at
264:16-266:14. In the interim period, Castillo had left 6335
Vine Street and moved in with a member of the community,
collecting scrap metal in order to make ends meet. Pl.'s
Dep. 88:4-7, 116:9-18.
release was prepared by Hemphill's counsel. C. Hemphill
Dep. I at 264:6-11. It required Castillo to agree that he had
“voluntarily” withdrawn from employment and could
not claim unemployment compensation or sue for wrongful
termination. Hemphill agreed to pay the wages he owed.
Hemphill agreed to advise the District Attorney that he
“had no interest” in seeing Castillo prosecuted,
with the understanding that only the District Attorney could
drop the charges. And Hemphill tendered formal notification
to the Department of Labor that because Castillo was no
longer employed, he must leave the United States.
entering into the agreement with Hemphill, Castillo's
terroristic threat charge was withdrawn. But to avoid a
conviction on the trespass charge, Castillo entered the
Court's Accelerated Rehabilitative Disposition (ARD)
Program. He was required to complete 12 months of probation
(including monthly probation fees), 32 hours of community
service, pay $1532 in court costs and $200 in restitution.
Pl.'s Ex. 26, ECF 29-5; C. Hemphill Dep. I at
279:7-280:17; Pl.'s Dep. 117:11-118:3. Castillo claims
that Carl Hemphill continued to harass and intimidate him
after the agreement was signed, asking co-workers about his
whereabouts; requesting and receiving confidential
information from the Mexican Consulate about his passport
renewal; contacting law and immigration enforcement regarding
Castillo; and monitoring a witness's house and taking
photos to forward to immigration authorities. Asencio Dep.
10:19-20, 11:7-17, 54:22-55:20; Pl.'s Ex. 27 at No. 6,
ECF 29-7; C. Hemphill Dep. I at 258:20-260:11; C. Hemphill
Dep. II at 95:11-98:15, 76:9-83:9, Pl.'s Ex. 16, ECF
29-4. Castillo applied for and received a T-visa, available
to certain categories of trafficking victims. See
INA § 101 (a)(15)(T); 8 U.S.C. § 1101 (a)(15)(T); 8
C.F.R. § 214.11. Castillo brings this action to remedy
the alleged harms caused by Defendants' behavior.
Standard of Review
Motion is governed by the well-established standard for
summary judgment set forth in Fed.R.Civ.P. 56(a), as
amplified by Celotex Corporation v. Catrett, 477
U.S. 317, 322-23 (1986).
Enforceability of the Contract
assert that the October 14 mutual release agreement between
Castillo and Carl Hemphill bars this suit. The release
agreement provides in relevant part that “[n]o claims
will be brought by either Employer or Employee, against the
other party, ” referring to Carl Hemphill and Castillo,
respectively. Ex. 8 to Def's MSJ at ¶ 4. In reply,
Castillo contends that the mutual release agreement is
unenforceable because (1) it is unconscionable and (2)
against public policy.
law governs Plaintiffs state law claims, Livingstone v.
N. Belle Vernon Borough, 91 F.3d 515, 523-24 (3d Cir.
1996) (Livingstone II). As a threshold matter, the
Defendants argue that it would be inappropriate for me to
consider evidence extrinsic to the terms of the agreement.
But the Pennsylvania Supreme Court has held that “[t]he
rule which forbids the introduction of parol evidence to
contradict, add to, or vary a written instrument does not
extend to evidence offered to show that the contract was made
in furtherance of objects forbidden by statute, by the common
law, or by the general policy of the law.” Bokser
v. Lewis, 119 A.2d 67, 70 (Pa. 1956) (citation omitted);
see also Kuhn v. Buhl, 96 A. 977, 985 (Pa. 1916)
(“Where a written instrument is attacked upon the
ground that the contract is offensive to law and violative of
public policy, the whole transaction should be inquired into,
and the court will not suffer itself to be embarrassed by any
technical rules regarding the admissibility of
evidence” (citation omitted)). Pennsylvania's
approach to unconscionability is “largely
consonant” with the Second Restatement of Contracts.
Salley v. Option One Mortg. Corp., 925 A.2d 115, 119
(Pa. 2007). Under the Restatement approach, although the
unconscionability determination is made as a matter of law,
it is made in “the light of all the material facts,
” and “the parties are to be afforded an
opportunity to present evidence as to commercial setting,
purpose and effect to aid the court in its
determination.” Restatement (Second) of Contracts
§ 208 cmt. f (1981).