(UPDATED COVERAGE Jan. 23) Two Oregon blueberry growers were financially coerced when they signed “hot goods” settlements with the U.S. Department of Labor, according to a federal judge who recommends they be overturned.
Pan-American Berry Growers LLC and B&G Ditchen LLC paid $48,818 and $169,816, respectively, in back wages and penalties. The consent decrees acknowledged 2012 violations of minimum wage and record keeping laws, lifting the Department of Labor’s hot goods objection.
The federal agency alleged 287 ghost workers had worked at Pan-American over a one-month period, and 810 at B&G Ditchen. The numbers, disputed by the growers, were based on a formula associating higher than average volume on picking cards with support from unnamed workers.
At Salem, Ore.-based Pan-American, the hot goods provision — which applies to goods produced in violation of wage laws — held up about 400,000 pounds of berries and delayed picking for a week. Normally 30,000 to 50,000 pounds per day would have been picked in the July to August window.
Silverton, Ore.-based B&G Ditchen claimed losses of $89,712 on rotting and overripe berries.
The losses would have been much steeper had the growers not consented, federal magistrate judge Thomas Coffin said in his Jan. 15 recommendation to the U.S. District Court.
“To avoid the potential loss of millions of dollars worth of berries, defendants had to agree to the (Department’s) allegations without an opportunity to present a defense or confront the…evidence in an administrative or court hearing,” Coffin wrote.
Use of the hot goods authority on agriculture was not common in the Pacific Northwest until about 2011, the judge said, though the Department of Labor has exercised it since the 1950s.
Prior to the Pan-American and B&G Ditchen cases, the federal agency generally allowed alleged violators to put proposed penalties and back pay into escrow, lifting the objection pending court resolution. But here, the judge said, the defendants were required to waive their right to a hearing, admit violations and pay penalties and back wages with no formal findings or explanation of the worker calculations.
“When one party must agree to a comparatively minor penalty or lose millions simply to engage in the judicial process, such heavy handed leverage is fraught with economic duress brought about by an unfair advantage,” Coffin said.
Timothy Bernasek, attorney for the growers, said his clients feel vindicated.
“The waiver of appeal rights without having investigative findings provided is incredibly heavy-handed,” said Bernasek, a partner in Dunn Carney Allen Higgins & Tongue LLP, Portland.
“I’ve never heard of them doing that before,” he said. “They used a consent judgment process as a requirement to lift their hot goods objection, at least once in Washington the summer before. But they didn’t require a waiver of appeal rights. Here there was no semblance of due process and I think the judge saw through it.”
The Labor Department has until Feb. 28 to file objections to Coffin’s findings and recommendations, after judge Michael McShane granted an extension Jan. 21 beyond the 14-day window.