Tuesday, March 4, 2014

Oregon: Judge rules in favor of farmers

By Oregon Farm Bureau News
Hot goodsPortland-The two Oregon Farm Bureau members who filed suit against the U.S. Department of Labor (USDOL) over blatant misuse of its "hot goods" powers scored a major victory earlier this year.

To recap: In the summer of 2012, USDOL accused the farmers of unfounded labor violations and slapped them with severe hot goods orders. This tactic threatened an embargo on the growers' fresh, perishable blueberries, preventing their customers from receiving the crops, unless large fines were paid and declarations of guilt were signed - even before the alleged labor violations were identified to the farmers and without any due process of law.

On Jan. 15, 2014, Federal District Court Judge Thomas Coffin issued a ruling vacating so-called consent agreements between USDOL and the two Oregon blueberry farms. Judge Coffin ruled the agreements invalid because USDOL misused its hot goods powers to the point of duress.

Oregon Farm Bureau has engaged on behalf of the growers, B&G Ditchen Farms of Silverton and Pan American Berry Growers of Salem, since Aug. 2, 2012, when the new coercive USDOL tactics first came to light. The two farms employed a legal strategy developed by OFB and were represented by OFB legal counsel Tim Bernasek.

At issue are the two consent agreements signed by the farms after USDOL began calling customers and telling them not to receive berry shipments from the farms because the department was considering using its hot goods powers. The farms had over $4 million in fresh-market berries in production and could not risk losing the fruit.

"USDOL had not completed its investigation, and in fact still has not produced evidence that any back wages were owed to workers, yet they demanded that these farms sign literally blank confessions and pay over $210,000 before berries could be shipped," said OFB Executive Vice President Dave Dillon.

USDOL contended that, based on a formula apparently created by its Portland staff, the farms had 800 "ghost workers" in the fields who were not on the payroll. That formula has since been debunked by a professional wage study and an industry survey.

Judge Coffin found the department's misconduct so severe that the "agreements" signed by the farms were invalid because they were signed under duress. Coffin wrote, "applying such authority to perishable goods…prevented the (farms) from having their day in court." The judge further questioned USDOL's methodology: "the validity of DOL's calculation could not be determined through any sort of deliberate process."

"These farms took a big risk in stepping up to fight back in court. It took real courage," said Dillon. "Their goal, and OFB's, is to ensure no other farms have to endure this kind of duress ever again." OFB's legal foundation has raised more than $20,000 to help pay the costs of the lawsuit.

Judge Coffin also agreed with OFB and the farms that USDOL suddenly and inexplicably changed its methods in these 2012 Oregon cases. In the past, USDOL asked farms to put money into an escrow account. If back wages were found to be owed to workers, they could be paid out of this account.

After a pre-determined period of time to find and pay those who were owed, remaining funds would be returned to the farm. If no wages were owed, the full amount was refunded. In the cases of B&G Ditchen Farms and Pan American, USDOL required the farms to pay estimated back wages and penalties directly to USDOL instead.

In its most egregious overstepping of authority, USDOL also required a waiver of rights preventing the farms from any appeal, even if "future finding of fact or law" would exonerate them. Judge Coffin wrote, "This court can think of no good reason in support of the DOL's decision…" to use these coercive tactics.

The ruling will likely be reviewed by another judge at the district court level. After that, USDOL could appeal to the 9th Circuit Court of Appeals where any decision would set a binding precedent throughout the circuit and would deal an enormous blow to DOL's use of hot goods in the West.

In a separate federal lawsuit, OFB has sought public documents related to USDOL's activities throughout these cases under the Freedom of Information Act (FOIA). OFB staff are reviewing documents released in response to the FOIA lawsuit and are negotiating court costs to be reimbursed by the department.

"Based on a preliminary review of these documents, USDOL is going to have a lot more questions to answer before this is over," said Dillon.
Learn more about the hot goods story at oregonfb.org/usdol. For information on how to make a donation to the case, email dave@oregonfb.org.

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