Skip to comments.Farm bureau and Oregon officials blast 'heavy handed' federal labor investigations
Posted on 09/03/2012 6:30:02 AM PDT by DeaconBenjamin
In late July, investigators with the U.S. Department of Labor visited three blueberry farms in Marion County and announced finding "widespread" record-keeping and minimum wage violations at each.
Farm labor law investigations are often contentious, especially involving fruit pickers working on a "piece rate" basis rather than an hourly wage. But these cases took an unusual turn as the labor department's Wage and Hour Division staff in Portland dropped the hammer.
In a move Oregon's congressional delegation and the Oregon Farm Bureau say was unprecedented and deeply unfair, the department invoked a "hot goods" provision of labor law that prohibited shipment of the berries. Labor officials also notified wholesalers that berries from the farms would be subject to the order and should not be processed or shipped.
Suddenly, the growers were stuck holding perishable berries worth hundreds of thousands of dollars. The labor department offered a way out: Pay a fine and back wages and sign a consent judgment admitting wrong and agreeing not to contest the order even if subsequent information exonerated the farms.
Greg Ditchen, a third-generation Silverton farmer whose B&G Ditchen Farm paid the $169,816 in back wages and penalties, called the department's action "extortion." Half his crop was at risk and there was no time to offer a defense or pursue other legal options.
"They put a hot goods order on our fruit, and after they had the money they said we had to sign a paper saying we were wrong," Ditchen said. "We had to make a business decision and sign the paper."
A second farm, E&S Farms Inc. of Woodburn, paid $11,301 in back wages and a $10,500 penalty. Earlier this month, the Department of Labor said Pan-American Berry Growers of Salem signed a consent order to pay $41,778 in back wages and a $7,040 civil penalty.
A retired federal Wage and Hour Division investigator who reviewed two of the cases for an attorney representing the farmers said the agency's action was hasty and alarmingly incomplete.
"They put a noose around the neck of these farmers right off. That is not what Wage and Hour is about," said Manuel Lopez of Eugene, who was a labor investigator for 27 years.
Oregon officials are furious. The state's labor commissioner, agriculture director and most of the state's congressional delegation asked the labor department to explain its action.
Labor Commissioner Brad Avakian was the most direct. In an Aug. 15 letter to the federal agency, he said seizing perishable crops probably violates the constitutional search and seizure and due process rights of farmers "who have yet to be found guilty of anything."
Avakian asked the department to immediately cease using the "hot goods" provision, which refers to a clause in the 1938 Fair Labor Standards Act originally intended to halt abuses in the garment industry.
Avakian said the department should use an enforcement tool that "does not result in irreparable harm prior to full investigation and a fair process of adjudication."
In an Aug. 17 letter, the congressional delegation said the federal Department of Labor "may have abandoned normal due process mechanisms." Use of a "hot goods" order is reserved for cases in which farm labor violations are "willful, egregious and/or repeated," the letter said.
Senators Ron Wyden and Jeff Merkley signed the letter, as did representatives Kurt Schrader, Peter DeFazio, Greg Walden and Suzanne Bonamici.
Oregon Agriculture Department Director Katy Coba also complained, saying hot goods orders are "being issued as a first step in the compliance process instead of the last resort."
"This appears to be a very heavy handed approach," she said in an Aug. 15 letter to U.S. Labor Secretary Hilda L. Solis.
U.S. Labor spokeswoman Deanne Amaden said the department is "not in a position to discuss cases in greater detail right now," but may have a more detailed response within two weeks.
Enforcement action involving the Fair Labor Standards Act are intended to protect workers and level the playing field for employers, she said.
Tim Bernasek, a Portland attorney representing B&G Ditchen Farm and E&S Farms, said the signed consent judgments may limit his clients' appeal options. Along with the Farm Bureau, he hopes to continue discussions with the Labor Department and halt the use of hot goods orders in future investigations.
Dave Dillon, the Farm Bureau's executive vice president, said labor investigations can be sorted out over time.
"Farmers are not in a business that's going to pack it up in a truck tonight and head to another state," he said. "What's the urgency of saying stop your whole business until you admit guilt, pay a fee and have no due process?"
Farm labor law is complicated. Fruit and berry pickers often are hired and supervised by contractors, but Oregon farmers nonetheless bear responsibility in a system that requires them to carefully track employees, hours worked and wages paid. If an investigation shows they messed up, through carelessness or otherwise, they can expect to pay back wages and fines.
Most harvest workers prefer to work on a "piece rate," or per-pound basis, because they can make more money than settling for the fixed, minimum wage. It is a farmer's obligation, however, to track hours and picking totals to ensure workers earn at least the federal minimum wage of $7.25 an hour. The law has exceptions and exemptions that further complicate matters.
In some cases, two or more workers -- often family members -- will pick on the same ticket. Attorneys and the Farm Bureau discourage that practice, because it complicates record-keeping.
In the Ditchen Farm case, documents indicate blueberry pickers earned 33 cents per pound. A worker picking two buckets an hour, for example, approximately 28 pounds, would earn the equivalent of $9.24 an hour. Farmers and others say the best pickers can earn $30 an hour or more.
Bernasek, the attorney, said labor investigators concluded anyone picking more than 60 pounds an hour at the Ditchen farm must have had someone else picking with them, and docked the farm for back wages due those workers. But Bernasek suggested such "ghost workers" are unidentified and may not exist, and said back wages collected on their behalf will never be distributed.
Lopez, the former labor investigator, said he did a one-hour time study at the farm involving 17 pickers. The workers picked from 112 to 196 pounds in an hour, well over the department's 60-pound standard.
"They didn't do a complete investigation," he said.
Lopez said the Ditchen farm may have committed some "record keeping" violations, but said the hot goods order wasn't necessary.
Greg Ditchen, the farm owner, said he's never been in trouble before and may use only mechanized harvesters in the future.
"It's not the labor," he said, "it's the people who come out and tell us we're doing wrong."
Sorry no sympathy from me.. Farmers looking for the cheapest immigrant labor that taxpayers always end up subsidizing (cotton picking ring a bell?) need to use mechanized pickers or pay a wage that Americans will accept. I don’t accept that farmers should bring in poverty that the rest of us must subsidize.
Interesting way to do business when all you have to do is keep track of the hours worked and how much was paid.
If the Politicians and Elected leaders in Oregon were truly “Outraged” at these heavy handed gestapo tactics, they would have had the State Police Arrest and Jail every last one of these folks from the various Federal Agencies taking part in this shakedown, for their ADMITTED FELONY EXTORTION.
Why are today’s kids so spoiled they won’t accept this as a stepping stone job? It surely is not ignoble.
I don’t think you folks are reading this completely prior to posting your comments. For the most part, they did have wage and hour documents. The government challenged the validity of them based upon their stupid unbased assumptions.
The farmers were paying correctly.
I’ve run into this in wage and hour audits with L&I on piece rate work. They assume everyone is lazy and can’t make rate!
If you follow the calculations, Labor & Industry was stating that the piece rates or pounds picked were too high for one person and thus were dividing them in half based upon their assumption that two workers were on one ticket. If half of the production X the rate per pound did not make minimum wage the employer was hit with an assessment.
60 lbs per hour X .28 = $16.80 per hour.
If you divided that in half 30 X .28 = $8.40 and thus the employer must pay a pickup amount on the original and imaginary employee.
$16.80 is not a bad hourly rate for unskilled farm labor.
Better than that. Just pay flat hourly rate and make them earn less.
Is an agreement signed under duress enforceable?
Sorry, I remembered the rate at .28 when it was .33 per pound.
60 x .33 = $19.80 per hour
It’s dodgy whenever dealing with the FEDS because whether it is or not is entirely up to the agency, until it reaches the federal circuit.
My thoughts are: How did it get this far? It would have taken all but a day to get relief.
The IRS agents make similar assumptions in their audits and hold people at financial gunpoint.
I had an IRS agent press for criminal fraud for unrecorded gross receipts against several clients years ago by taking the pounds of flour purchased and multiplying by his recipe of pounds of flour per pizza based upon menu price to find unrecorded gross receipts.
I took seven cases to Federal Tax Count and walked in with two pizza boxes taped shut to show why they were wrong. They used a thin crust pizza recipe and my client made Sicilian pizzas. Their assumption cost my clients over $50,000 just to prove they were right.
From the article:
A worker picking two buckets an hour, for example, approximately 28 pounds, would earn the equivalent of $9.24 an hour. Farmers and others say the best pickers can earn $30 an hour or more.
By getting too greedy the Feeb ended up with nothing. Had only one pizza maker been targeted the cost of defending would have been prohibitive, but when several could combine their cases, they could afford to prevail.
Why the stupid matter wasn’t solved with a letter to the IRS about pizza recipes (and copies of menus) is another issue. The IRS ought to have been charged with frivolous prosecution.
If a farmer can’t get a legal worker (a high school kid or an adult) to work in their fields, then they need to either raise the wages, or start using mechanized pickers. That’s the way a real free market should work.
But in no way should the cost of their savings in labor by using cheap labor performed by immigrants (illegal and other) be passed onto taxpayers, which is what happens. I’ll pay more for blueberries if they are picked in a way that doesn’t cost me in taxes. Actually I won’t because I have 9 blueberry bushes that I pick myself.
In today’s corrupt crony political environment the USA labor market is distorted whereby politicians turn a blind eye to illegals, or bring in a steady stream of other immigrants that give profits for a few, but cost society billions in costs of welfare etc by usurping the free market.
Bray - FYI in case you haven’t seen this.
We’re assuming it’s mostly illegales there.
In a competent Federal oversight they wouldn’t be quibbling about star berry pickers. They’d want to know if the workers were legals or not.
Distortion of the free market happens because of subsidies to some and the costs passed on to others. Politicians taking care of constituencies bends free market rules. We need to end all the giveaways to business, corporations and individuals that gives us distortions and redistribution of wealth.
The point here is the government used extortion to force a private company to pay a fee and sign an admission of guilt with their only other option being to let their crop spoil and go out of business.
I am sure if the workers were dues paying union members there would be no problem. All of the workers would then make the same amount and there would be no incentive for any to work faster to make more money than the slower pickers. The cost increases would either be passes on as the market allowed or your blue berries will be from China or South America. Another bit of our job base forced overseas by fascism and unions.