“Hot goods” update
Judge denies USDOL effort to appeal its ‘hot goods’ losses
On Aug. 25, 2014, Federal Judge Michael McShane denied the U.S. Department of Labor’s petition to appeal its losses to the 9th Circuit Court of Appeals. Three federal judges have now sided with Oregon blueberry growers who claimed that USDOL misused its “hot goods” powers in extracting enormous back wage and penalty assessments from Farm Bureau members B&G Ditchen and Pan American Berry in 2012.
Before completing an investigation, USDOL threatened the farms and their customers with seizure of the fresh blueberry crop being harvested at that time. The farmers had one other “choice:” Sign a blank confession and pay over $240,000 to USDOL immediately.
Judge McShane reiterated that the farms “had no choice but to agree to the consent judgments,” and that the farms were “effectively prevented…from having their day in court.”
Oregon Farm Bureau researched and created the legal strategy used by the farms in this challenge, and Farm Bureau members raised over $40,000 to help in this fight.
The earlier rulings found that USDOL used illegal “duress” on the farmers. Judge McShane went further and used the word “fraud” when describing the department’s actions in his Aug. 25 ruling.
OFB Executive Vice President Dave Dillon said, “USDOL had its day in court, which is more than it ever gave these farms. Three times federal judges have reviewed the case, and three times the judges have ruled that USDOL acted illegally in forcing these farms to pay money they never should have paid.
“It’s time for USDOL to pay the money back and admit that it wronged these farm families. Any other response is legally and morally indefensible.”
Wall Street Journal Opinion: “Despite these legal knockdowns, Labor isn’t apologizing. David Weil, who runs the Wage and Hour Division, told a House subcommittee in July: “There is no statutory exception for agricultural or perishable goods to the hot goods provision.” But if it isn’t explicitly in the law, that is because no one anticipated that bureaucrats would beat fines out of private employers with the fear of seeing their products destroyed if they didn’t cave.
Labor even managed to produce bipartisan outrage. Rep. Kurt Schrader, a Democrat from Oregon, has introduced a bill “to exempt certain perishable agricultural commodities” from the hot goods provision. We commend the blueberry growers, who fought back, but a better bill would protect all businesses from such tactics.” by Wall Street Journal editors, Sept. 1, 2014
Judge rules U.S. Labor Department can’t appeal ruling that it wrongly punished blueberry farmers, by Allan Brettman, Oregonian, Aug. 29, 2014
DOL can’t appeal ruling on ‘hot goods’ deals, by Mateusz Perkowsk, Capital Press, Aug. 26, 2014
Congressmen recently blasted the U.S. Department of Labor for coercing farmers with its “hot goods” authority, by Mateusz Perkowsk, Capital Press, July 30, 2014
Congressmen introduce bill to protect perishable goods from “hot goods” orders, Rep. Kurt Schrader’s website
Bend Bulletin Eds: Stop Labor’s overzealous enforcement, Bend Bulletin editorial, August 6, 2014
Feds should leave Oregon blueberry farmers alone, Opinion by Jared Meyer in the Salem Statesman-Journal, Aug. 21, 2014
Feds seeks appeal in Oregon ‘hot goods’ case, by AP, June 25, 2014
Labor Dept. considering ‘hot goods’ appeal, by Capital Press, April 24, 2014
Second judge sides with farmers on hot goods lawsuit, by AgInfo.net, April 29, 2014
Growers seek refund of ‘hot goods’ penalties, by Capital Press, April 24, 2014
The U.S. Labor Department’s allegations of labor law violations by farmers were based on scant evidence, internal agency e-mails show, by Capital Press, March 27, 2014
Labor’s Blueberry Police, by Wall Street Journal Editorial Board, March 18, 2014
Labor Department asks judge to overturn ‘hot goods’ ruling, by Mateusz Perkowsk, Capital Press, March 4, 2014
Provisions of the new farm bill require the Department of Labor to consult with the USDA before halting shipments of ag products under “hot goods” provisions in labor law., by Mateusz Perkowsk, Capital Press, Feb. 5, 2014
Feds used ‘economic duress’ to force Oregon farms to capitulatate, says judge, by By RaeLynn Ricarte, The Dalles Chronicle, January 29, 2014
‘Ghost workers’ elude Labor Department, by Mateusz Perkowsk, Capital Press, Jan. 29, 2014
Federal judge rules USDOL used duress on Oregon blueberry farmers, by Oregon Farm Bureau
Judge: ‘Hot goods’ settlements should be vacated, by Mateusz Perkowsk, Capital Press, Jan. 27, 2014
Congressman Schrader praises ruling on USDOL’s “hot goods” cases , Jan. 17, 2014
Bend Bulletin Editorial: Department of Labor was unfair to farmers, by Bend Bulletin, Jan. 18, 2014
Official ruling from Judge Coffin, Jan. 15, 2014
Judge: Strong case ‘hot goods’ settlements made under duress, by Mateusz Perkowsk, Capital Press, December 4, 2013
Berry farmers seek to rescind ‘hot goods’ settlements, by Mateusz Perkowsk, Capital Press, August 20, 2013
Oregon berry farms allege U.S. Labor Department coerced them into wage settlements, by Eric Mortensen, The Oregonian, August 15, 2013
> Article excerpt: “ Two Oregon blueberry farms forced to pay fines and admit labor law violations last summer have filed suit against the U.S. Department of Labor, alleging that the government’s action was coercive and denied them due process.
The lawsuit alleges the farms signed consent orders and paid fines totalling about $220,000 because their perishable blueberry crops were at risk. Labor investigators invoked a “hot goods” provision of labor law that prohibited shipment of the berries, and notified wholesalers that berries from the farms should not be processed.
Faced with possibility of berries spoiling, Pan-American Berry Growers of Salem and B&G Ditchen of Silverton allege they had no choice but to pay back wages and fines, admit wrong and agree not to contest the orders even if they were later exonerated.
The labor department “held the proverbial gun” to the farms’ heads and forced them to choose between letting berries rot or agreeing to the settlement, the lawsuit alleges. One farmer, Gregg Ditchen, described the action as “extortion.”
The lawsuit, filed Thursday in U.S. District Court in by Portland attorneys Tim Bernasek and Brian Talcott, asks the court to rescind the orders and reimburse the farms — $50,000 to Pan-American and nearly $170,000 to B&G Ditchen….” Full story
No ‘hot goods’ orders yet this season in Oregon, Capital Press article, July 27, 2013
Labor Department uses ‘hot goods’ provision against Washington farm, Capital Press article, July 30, 2013
USDOL squeezes farms again in Washington, Capital Press Editorial, Aug. 9, 2013
Federal Agency Hides Too Much, Capital Press editorial, June 14, 2013
On May 29, 2013, Oregon Farm Bureau, the state’s largest family agriculture organization, filed suit in U.S. District Court in Portland in response to the U.S. Department of Labor’s (USDOL) refusal to comply with the federal Freedom of Information Act (FOIA). In the filing, Farm Bureau seeks public records about USDOL’s use of “hot goods” powers. Filing this lawsuit is Farm Bureau’s only option after USDOL failed to meet its deadline to respond to an April 23, 2013 appeal. The department had 20 business days to comply with the law and failed do so.
On March 21, 2013, Oregon Congressman Kurt Schrader submitted bill HR 1387, “To amend the Fair Labor Standards Act of 1938 to exempt certain perishable agricultural commodities from the goods whose sale or distribution in commerce may be prohibited subsequent to a violation of such Act.”
During the 2013 Oregon State Legislative Session, the Senate passed Senate Joint Memorial (SJM 7), which would, “…require the United States Department of Labor to adopt standard rules and procedures for the application of the ‘hot goods’ provision of the Fair Labor Standards Act.” OFB President Barry Bushue testified alongside farmers Zach Krahmer and Jay Hoffman in committee to help get this passed.
For months prior, documents and public outcry accrued regarding the U.S. Dept. of Labor’s inexplicable use of the “hot goods” order in Oregon.
To recap: Farm Bureau members were slapped with severe hot goods orders, embargoing their fresh blueberries until large fines were paid (in one case, nearly $170,000) and declarations of guilt were signed — even before the alleged labor violations were identified to the farmers and without any due process of law by USDOL. (Read more about what happened here.)
It has been MONTHS since Oregon’s congressional delegation asked for an explanation on Aug. 17. But USDOL told Reps. Kurt Schrader and Greg Walden that it needed a “couple more weeks” to defend what it took only hours to do to farm families and their employees.
As of today, we’re still waiting for an explanation from USDOL.
If US DOL has contacted your farm in recent weeks threatening a “hot goods” embargo on your crops, please contact Farm Bureau immediately. Email Shawn Cleave at Shawn Cleave.
Media coverage of the “hot goods” scandal:
Board of Ag protests ‘hot goods’ tactic, Capital Press, Sept. 26, 2012
‘Hot goods’ compensation in doubt, Capital Press, Sept. 13, 2012
‘Hot goods’ tactic must stop , Capital Press Editorial, Sept. 13, 2012
On Aug. 31, 2012, OFB responded strongly to a USDOL press release on its actions targeting blueberry growers with a draconian “hot goods order.” The release sparked commentary by the Oregonian Editorial Board hours later.
‘Hot goods’ orders amount to overregulation, experts say, Capital Press, Aug. 21, 2012
Farm bureau and state officials blast ‘heavy handed’ federal labor investigations, The Oregonian front-page story, Aug. 30, 2012
Federal crackdown goes too far, Bend Bulletin Editorial Board, Aug. 19, 2012
An offer that growers can’t refuse, Capital Press Editorial Board, Aug. 17, 2012
U.S. Department of Labor Consent Decree, August 2012
USDOL demanded payment of nearly $170,000 in this case and a signature on this judgment before it would lift the “hot goods” designation which prevented the farm’s customers from receiving any product during harvest.
The document is greatly detailed in its long list of penalties and remedies. The detailed allegations that underpin USDOL’s heavy-handed overreach however will, “Be supplied at a later date.”
That later date is after the document was to be signed and the enormous sum to be paid.
The farmer’s choice was to fight back while his fresh blueberries rotted. Admit guilt to undisclosed violations and pay $170,000, or let your berries rot and got out of business.
There is nothing voluntary, just, or due-process oriented about this so-called choice. These tactics were used on at least three Oregon farms in August, and tried on at least one other before DOL realized it did not have jurisdiction (only after scaring a farmer’s family with threats while on-farm).
In the case of the farm in this decree, the family has never had any US DOL violations of any kind before. They are a well-known farm, and good operators, yet they were treated like fly-by-night repeat offenders.
- PDF Page 1, paragraph 2: DOL will only lift “hot goods” objection to shipment if the decree is signed. “You must sign…”
- PDF Page 2, paragraph 1: By signing the consent judgment, the farmer must waive due process, waive any defense to the complaint, and waive further “findings of fact and conclusions of law.”
- PDF Page 3-4: USDOL alleges $156,616 in wages and damages (p.3), based on details provided in “Exhibit A” (p. 4).
- PDF Page 4: “Check payable to U.S. Department of labor.” USDOL later, in a late Labor Day Friday press release, incorrectly stated that the farm paid, “back wages and liquidated damages directly to 810 employees.” DOL received the money, and has not distributed a single dollar to any employee, real or imagined.
- PDF Page 10: Exnibit A, the lynchpin for the entire complaint, and the only chance the farmer has to know the detailed allegations he is responding to says, in its entirety: “This information to be supplied at a later date.” Somewhere, George Orwell is stirring in his grave.