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Labor Department to appeal ‘hot goods’ case

Mateusz Perkowski

Capital Press

Federal labor regulators want to appeal a court ruling that found they abused the "hot goods" provision of labor law by threatening to block shipments of perishable crops.

The U.S. Labor Department seeks to appeal a ruling that held the agency unlawfully coerced Oregon farmers with its “hot goods” authority.

Earlier this year, a federal judge invalidated financial settlements between DOL and two blueberry farms because the farmers signed the deals under economic duress.

In 2012, Pan-American Berry Growers and B&G Ditchen agreed to pay the agency $220,000 to settle allegations of minimum wage violations.

The growers later sought to overturn the deals, claiming that DOL invoked its “hot goods” authority to block shipments the perishable crop without providing an opportunity to challenge its findings.

The farms said they could have lost millions of dollars worth of blueberries unless they signed the consent decrees, which required them to waive appeal rights.

In April, U.S. District Judge Michael McShane agreed that DOL’s actions “threatened to cripple the growers” and threw out the settlement deals.

Attorneys for DOL have now asked the judge to allow the 9th U.S. Circuit Court of Appeals to review that ruling.

Such an appeal is necessary to resolve the legal issue of whether DOL’s committed “fraud or misconduct” by invoking its hot goods authority against perishable crops, the agency said.

“This is a novel question that has never been addressed by any other court at any level of the judiciary, let alone by the Ninth Circuit,” according to a DOL court filing.

The DOL’s request for an appeal suggests the agency is willing to escalate the legal dispute — an adverse ruling by the 9th Circuit would create legal precedent across much of the West.

However, the DOL’s ability to challenge the ruling is uncertain because it’s not a final order that ends the case. Rather, the ruling resurrected the litigation.

The judge may deny the agency’s motion to “certify” such a non-final “interlocutory appeal” to the 9th Circuit.

Even if he agrees to certify the appeal, the 9th Circuit itself may decline to review the case at this point.

“They have two hurdles they need to clear and we’re going to oppose them at each step,” said Tim Bernasek, attorney for the farmers.

The farmers believe that DOL should have to wait to appeal until the lawsuit is finally decided, he said.

The agency claims the growers employed “ghost workers” who worked off the books and were paid less than the minimum wage.

However, internal agency e-mails obtained by the Oregon Farm Bureau show that DOL couldn’t find a vast majority of these alleged ghost workers.

“We want them to prove their case, which we don’t think they’ll be able to do,” said Bernasek.


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