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Labor Department asks judge to overturn ‘hot goods’ ruling

Mateusz Perkowski

Capital Press

The U.S. Department of Labor is responding to a magistrate judge's "hot goods" ruling by saying he made several errors.

The U.S. Labor Department claims a judge committed legal error by overturning “hot goods” settlements between the agency and Oregon farmers.

A federal magistrate judge accepted “unsupported allegations at face value” from the farmers when he ruled the deals should be revoked, the agency said in a court document.

The ruling’s “numerous erroneous factual findings simply have no basis in the factual record” and the judge disregarded “contrary, credible evidence” presented by DOL, the agency claims.

The agency has filed an “objection” to the opinion by U.S. Magistrate Judge Thomas Coffin, who found in January that the consent decrees were invalid because the farmers signed then under economic duress.

The legal controversy dates back to August 2012, when the DOL accused three blueberry farms of violating labor law by paying less than the minimum wage.

The agency claimed their blueberries were unlawfully harvested “hot goods” that could not be shipped in interstate commerce.

To avoid having their fruit spoil, the farms agreed to pay $240,000 in alleged back wages and penalties.

Under the terms of the deal, they waived their rights to appeal.

However, two of the farms — Pan-American Berry Growers and B&G Ditchen — successfully argued they were coerced and the settlements should be overturned.

The Labor Department is now asking U.S. District Judge Michael McShane to overrule the magistrate judge and keep the consent decrees intact.

Tim Bernasek, attorney for the farms, said he expected the DOL to file an objection and will soon submit a response to the document.

“We feel confident in the arguments we’ve made and Judge Coffin’s decision,” Bernasek said.

In its court filing, DOL lawyers argued, “Defendants have not and cannot meet their burden of proving, by clear and convincing evidence, that the DOL committed any wrongdoing — let alone any action that could amount to fraud — in reaching its settlement with defendants.”

Coffin’s finding of DOL misconduct is “troubling” because the agency was acting within its “hot goods” authority by threatening to block shipments, the agency argued.

“Moreover, a party’s threat to do what it has a lawful right to do may not constitute economic duress,” DOL said.

The agency also argued that Coffin was incorrect in his finding that DOL changed its policy by adopting a more aggressive “hot goods” strategy.

The judge had found that DOL took a “new posture” because the farms weren’t allowed to place alleged back wages into an escrow account while defending against the charges.

The Labor Department claims that it followed longstanding “hot goods” procedures and that officials do not have to allow disputed back wages to be put into escrow.

The agency also rehashed arguments rejected by Coffin that the farmers waited too long to challenge the consent decrees in court.

The farms had the opportunity to try to cancel or suspend the deals almost immediately, but elected to wait nearly a year, DOL said.

Vacating the settlements after such a long delay is unfair to labor law investigators, according to the objection.

“To attempt to reopen the case at this late stage is highly prejudicial, especially given the context of these investigations, which concerned violations suffered upon migrant farmworkers, magnifying the already well-known problems with locating employee witnesses and reconstructing memories lost with the normal passage of time,” the document said.


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