Friday, August 8, 2014

How the Department of Labor Extorts Blueberry Farmers

By Jared Meyer

The Department of Labor has been extorting admissions of employment law violations from American blueberry farmers. Two judges have found that the Department's use of "hot goods" orders for perishable goods to be coercive. Yet, the Department continues to appeal its case and its actions were the subject of a Congressional hearing last week.

The "hot goods" provision of the Fair Labor Standards Act of 1938 was created to even the playing field between employers that complied with employment laws and those that did not. President Franklin Roosevelt, in pushing for the adoption of this provision, argued that allowing the shipment of "contraband" goods, those produced by companies that failed to meet wage and safety requirements, would undermine interstate commerce and place law-abiding employers at a competitive disadvantage. Therefore, Congress granted the Wage and Hour Division at the U.S. Department of Labor the authority to ban the sale of these goods.

While a hot goods order is in place, companies are unable to ship their goods and they must stop production. For farmers with perishable goods, the financial consequences are severe. To get a hot goods order lifted before perishable agricultural goods lose all their value, growers must admit guilt and waive all future rights of appeal. They are also required to pay back-wages, whether or not they actually underpaid workers, and a fine for the unproven violation of employment standards. Instead of taking the government to court, they waive their rights and admit guilt since doing so is the only financially feasible option.

The House Subcommittee on Horticulture, Research, Biotechnology, and Foreign Affairs held a hearing last week about the dangers of hot goods orders on perishable goods. In the hearing, Ranking Member Kurt Schrader (D-OR) reminded members that hot goods orders were never used on perishable goods from 1983 until 2008.

Brad Avakian, Oregon's Commissioner of Labor and Industries (an elected, nonpartisan position that protects Oregon workers and businesses), was one of the witnesses in the hearing. Avakian is no apologist for businesses that skirt employment laws--last year his agency conducted over 2,000 investigations and returned more than $2 million to underpaid Oregon workers. Yet he is rightly concerned about the lack of due process for Oregon agricultural growers.

Even though they had signed away their right to do so, two blueberry growers, Pan-American and B&G Ditchen, challenged the Department of Labor in court on the grounds that they were under duress. They were vindicated, and U.S. Magistrate Judge Thomas Coffin wrote in his January ruling, "While the proposed back wages and penalty were substantial, the potential losses due to a continuing hot goods objection pending litigation dwarfed the proposed judgments' impact on defendants. The defendants... were left with no choice but to accept the judgments."

In April, U.S. District Judge Michael McShane agreed that the government's actions were coercive and illegal. Still, the Department of Labor is refusing to return the growers' money and is seeking to appeal the ruling.

Read the rest here.

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