Records suggest scant evidence in ‘hot goods’ cases
Emails among U.S. Labor Department officials reveal the agency had scant evidence for its charges of wrongdoing against Oregon blueberry farms in 2012.
Through a lawsuit, the Oregon Farm Bureau has obtained documents that show DOL officals apparently struggling to back up allegations that several farms underpaid roughly 1,000 “ghost workers.”
The records relate to investigations launched during harvest by the agency in 2012 that supposedly uncovered widespread minimum wage violations by three Oregon farms. The department alleged that individual employees credited with specific harvest totals were actually aided by unrecorded ghost workers.
The DOL declared the fruit as “hot goods” produced in violation of federal labor law. “Hot goods” can’t be lawfully sold in interstate commerce.
The three farms agreed to pay roughly $210,000 in back wages and $30,000 in penalties to be able to ship their blueberries.
A federal magistrate judge recently found the farms made the payments under duress to prevent their berries from rotting. The judge recommended overturning the deals.
While the agency’s enforcement tactics have attracted a lot of attention, the Oregon Farm Bureau has also been scrutinizing the DOL’s underlying allegations.
Department officials denied a Freedom of Information Act request for more details about the investigations, prompting the bureau to file a lawsuit against the agency.
The department turned over documents during the litigation and recently reached a settlement under which it agreed to pay $30,000 in attorney fees to the bureau.
Contrary to DOL’s claims during and after the investigations, the documents show the agency lacked concrete proof that the farms were underpaying workers, said Dave Dillon, OFB’s executive vice president.
“It was really nothing to go on,” he said. “We’re not seeing evidence the department did what it needed to do to establish there were back wages and penalties owed.”
DOL’s allegations appear entirely based on a poorly substantiated formula that concludes pickers who harvested above a certain amount of fruit were assisted by unpaid ghost workers, he said.
“It just appeared out of the clear blue sky and still has not been explained,” Dillon said.
Capital Press asked officials at DOL to comment on the emails and respond to the Oregon Farm Bureau’s concerns.
A spokesman for the agency acknowledged the request but had not responded as of press time.
Emails obtained by OFB and reviewed by Capital Press raise questions about the veracity of DOL’s investigation:
• Despite demanding that the farms pay roughly $210,000 to reimburse 1,000 ghost workers, the agency has identified less than 30 such employees.
In an email exchange several months after the payments were extracted from farmers, Jeff Genkos, district director of DOL’s Portland office, admits that, “Unfortunately despite all our efforts, by the way we have devoted significant time and energy into this project, most are still in the ghost category.”
Ruben Rosalez, DOL’s regional administrator for the West, then asks about reaching ghost workers through the Mexican consulate.
Genkos responds that the effort is underway but “in all honesty I’m not too optimistic that we will locate many more workers.”
• Undated reports about the status of the search for ghost workers showed inspectors received little response to their outreach efforts.
In one case, an inspector tells Genkos, “I spoke with 10 workers in the employer’s farm labor camps last fall before they left for the season. All denied having a ghost worker on their ticket.”
• Labor officials also seemed to have trouble reconciling different accounts of the investigations.
In an email sent in August 2013, DOL employee Amalia Burton explains that “one employee can be listed more than once as Unknown,” and goes on to provide an example of an employee who counted as eight ghost workers who were collectively owed nearly $1,700.
• In another email, Patricia Davidson, DOL’s deputy administrator for program operations, explains that the agency is trying to respond to inquiries by members of Congress and Oregon’s Labor Commissioner.
“We are stuck on some BW (back wage) computation issues,” she said. Davidson refers to one explanation of how the number of ghost workers was calculated, but says, “the computations were modified from this formula. I need your assistance in providing us with a more concise, more reader friendly and more accurate description of the BW method of computation.”
• In March 2013, Genkos was asked about refunding “excess funds” to the farms or applying them toward civil monetary penalties (CMPs). Genkos states, “Yes all excess funds should be applied to CMPs. As for refunds, I don’t think so.”
In the best case scenario, the discrepancies discussed by DOL officials point to disorganization in their enforcement, said Dillon.
“Why didn’t you get the complete accurate information before assessing back wages and penalties?” he said. “Six months later, they’re still trying to figure out what they did.”
The worst case possibility is the officials fudged the numbers to put a better face on the situation and cover their tracks, Dillon said.
“Are you incompetent or a crook?” he said.
From a broader perspective, Dillon said he’s troubled by the agency’s attitude.
In an email sent during the investigations, for example, Genkos complains that farmers “continued to fuss about them being entitled to due process.”
DOL’s refusal to turn over records until it was sued is also worrisome, as is the agency’s unwillingness to admit being wrong in this case, Dillon said.
“You can’t fix a problem if you don’t acknowledge you have a problem,” he said.