A Texas agricultural construction company spent five years fighting over whether its guest workers were owed overtime. After winning, it still paid them $800,000 because a settlement offer made a week earlier could not be withdrawn.

On June 26, Judge James D. Peterson of the U.S. District Court for the Western District of Wisconsin granted summary judgment to Austin-based Signet Builders, Inc., holding that workers who build livestock enclosures on farms fall within the Fair Labor Standards Act’s exemption for agricultural labor and are therefore not entitled to overtime pay. The ruling in Luna Vanegas v. Signet Builders preserves the nationwide workforce model in which contractors hire crews through the federal H-2A agricultural visa program.

But one week before the ruling, Signet’s attorneys had served the plaintiffs with an offer of judgment under Federal Rule of Civil Procedure 68: $800,000, comprising $271,846 for the five workers and $528,154 for their attorneys’ fees, plus costs. Under Seventh Circuit precedent, such offers remain open and irrevocable for 14 days.

When the summary judgment was issued on June 26, there was about a week left to accept the offer. The workers’ claims lost their value, but the settlement offer became very important. They accepted it the next day.

Daniel Bonnett of Martin & Bonnett, attorney for the workers, did not immediately respond to a request for comment.

The court entered judgment in the amount of $800,000 on July 2 against the company, three related entities, and three individual owners and officers.

Dan Pipitone, a shareholder at Munsch Hardt who led Signet’s defense, said the payment was the cost of ending the case for good.

“Signet has gone ahead and settled by giving some money to these plaintiffs in order to end the case and preclude an appeal of this opinion,” Pipitone said. “We want this opinion to stand. We don’t want any possibility of a change in that opinion whatsoever, because it’s so valuable to Signet, to farms, and to other contractors.”

The litigation began in 2021, when Jose Ageo Luna Vanegas, a Mexican citizen who worked for Signet on H-2A visas building hog, dairy and poultry structures in Wisconsin, Minnesota and Indiana, sued for unpaid overtime on behalf of himself and similarly situated workers. Signet argued the workers were exempt “employees employed in agriculture.”

The case went back and forth for years. Judge Peterson dismissed it in 2021, but the Seventh Circuit reversed in 2022, saying the exemption was a fact-heavy issue that could not be decided at that stage. The Supreme Court declined to review the case. In 2024, another Seventh Circuit decision said the Wisconsin court could only hear claims from work done in Wisconsin, reducing the potential class from about 400 workers to just a few. One of the two named plaintiffs, Jose Luis Garcia Gonzalez, died during the case and was represented by his estate.

Pipitone said that the law has always covered this type of work. “When the Fair Labor Standards Act was passed, there was a very big debate,” he said. “At first, it was intended to only cover primary agriculture, but farmers, particularly represented by senators in the Southern states, advocated that secondary agriculture be included. Nobody is trying to change anything. Signet was not trying to change anything.”

He also said the required costs of the H-2A program offset the cost of not paying overtime. Employers must pay for visa applications, transportation to and within the United States, housing, and insurance, at wage rates set by the Department of Labor. “This actually probably costs Signet more per employee than if they could just pay the eight hours of overtime, but they can’t get the workers” domestically, he said.

Signet CEO Greg Schonefeld said the case put the company’s foundation at risk. “Everything we’ve built is through the people, and I know a lot of them personally at this point,” he said. “The thought of that coming apart was probably the biggest thing on my mind throughout this.” He said the lawsuit was a surprise because the company had “worked with the DOL throughout” and had passed program audits.

The estate of Jose Luis Garcia Gonzalez and opt-in plaintiffs Sebastian Garcia Estrada, Guillermo Oracio Bueno and Luis Alejandro Lopez Rodriguez will split $271,846, with individual shares ranging from $42,130 to $62,182.

To read more, click here.