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Stemilt sues ex-employee over alleged billing scheme

The orchard management subsidiary of a large Washington tree fruit company fires and sues an employee it claims undeservedly billed it more than $1.1 million in the hiring of foreign guestworkers.
Dan Wheat

Capital Press

Published on November 24, 2017 3:59PM

Corporate office of Stemilt Growers and its orchard management subsidiary, Stemilt Agriculture Services, in Wenatchee, Wash. The company is suing an ex-employee for breach of contract for losses of more than $1.1 million.

Dan Wheat/Capital Press File

Corporate office of Stemilt Growers and its orchard management subsidiary, Stemilt Agriculture Services, in Wenatchee, Wash. The company is suing an ex-employee for breach of contract for losses of more than $1.1 million.

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WENATCHEE, Wash. — An employee of Stemilt Agriculture Services has been fired and sued by the company for allegedly billing it more than $1.1 million, through a pass-through company, for services she was paid for as an employee and for work no one did.

Elizabeth Hernandez, who worked in human resources for Stemilt Ag Services, and her company H2 Global are defendants as are Kennewick farm labor contractor, Evergreen Agricultural Services, and its manager Abraham Larios. The lawsuit was filed last month in Chelan County Superior Court in Wenatchee. The defendants’ attorney, Jeffrey Sperline, Kennewick, could not be reached for comment.

Stemilt Ag Services is a wholly-owned subsidiary of Stemilt Growers, a large tree fruit company in Wenatchee. Stemilt Growers packs and sells its own fruit and that of independent growers. Stemilt Ag Services manages more than 8,000 acres of company-owned and leased orchards. The company was authorized by the U.S. Department of Labor to hire 2,082 H-2A workers in 2017, the sixth largest employer of H-2A in the nation.

Shortly after she was hired by Stemilt Ag Services in 2009, Hernandez helped the company recruit and hire H-2A foreign guestworkers, according the lawsuit alleging tortious interference and breach of contract.

In 2016, while still employed at Stemilt Ag Services, Hernandez formed H2 Global to recruit, transport and hire seasonal H-2A workers. Hernandez arranged for Stemilt Ag Services to contract with Evergreen Agricultural Services for H-2A recruitment, hiring, transportation and related services, the lawsuit states.

Hernandez provided invoices from H2 Global to Evergreen for work she performed in recruitment, hiring and transporting H-2A workers for Stemilt Ag Services. Evergreen then prepared separate invoices for the same work and billed Stemilt Ag Services, the lawsuit states.

Stemilt Ag Services paid Evergreen for services Hernandez should have performed as an employee of Stemilt Ag Services, for “services not provided” and Hernandez used Stemilt Ag Services resources for conducting her business as H2 Global without compensating Stemilt Ag Services, the lawsuit states.

In the summer of 2017, Stemilt Ag Services administrative staff discovered the potential that the company paid for services provided by H2 Global that had been billed to it by Evergreen. It further discovered that Hernandez was a 50 percent partner in H2 Global, the lawsuit states. Following an audit, Stemilt Ag Services fired Hernandez on Oct. 17.

Subsequent to the firing, Stemilt Ag Services learned Hernandez and Larios recruited approximately 50 H-2A workers away from Stemilt Ag Services, many of whom they hired, to work elsewhere resulting in the likelihood the company would not be able to harvest all of its crop and having a “significant economic impact,” the lawsuit states.

The workers were used at other orchards where the workers were not authorized to work under federal law and it was a breach of Evergreen’s contract with Stemilt Ag Services, the lawsuit states.

About 30 of the workers were found working for Columbia Fruit Packers, Wenatchee, in Quincy and had been offered as domestic workers to Columbia by Larios, according to an affidavit of Zach Williams, Stemilt human resources director.

Williams met with the workers, unsuccessfully sought their return, Columbia quit employing them because they were not legal and it was unknown where they went, according to the affidavit.

The lawsuit seeks damages to be proven at trial.

Stemilt Ag Services obtained a court order, Nov. 3, enjoining Hernandez, H2 Global, Larios and Evergreen from further management of Stemilt Ag Services H-2A workers other than for contractual obligations to assist in the return of workers to Mexico.



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