Zirkle wage dispute

Eliazar and Maria Diaz pick blueberries in an East Wenatchee, Wash., field on June 26. The much larger Zirkle Fruit Co. blueberry fields many miles south are involved in a wage dispute.

RICHLAND, Wash. — Part of Washington’s blueberry harvest is jeopardized by a 50% increase in wages for pickers ordered by the U.S. Department of Labor and contested by Zirkle Fruit Co. of Selah.

If a federal judge upholds the wage increase at an Aug. 29 hearing, Zirkle will pay the increase for workers back to July 24 and then decide whether to complete the harvest, says Brendan Monahan, a Yakima attorney for Zirkle Fruit.

“Enforcing an unprecedented wage jump rate like this would cause plaintiff (Zirkle Fruit) to suffer a sudden, unsustainable and financially calamitous increase in labor costs in the middle of harvest,” states Zirkle’s lawsuit, filed Aug. 7 against DOL in U.S. District Court in Richland, Wash.

Washington and Oregon are typically the nation’s largest blueberry producers. Washington harvested 136 million pounds in 2018 valued at $139 million, according to USDA’s National Agricultural Statistics Service.

Washington is projected to harvest approximately 140 million pounds of blueberries this season from more than 20,000 acres. Of that, Zirkle Fruit anticipated harvesting 14.5 million pounds from 849 acres, more than 10% of the state crop, the lawsuit states.

Harvest runs from late June to the end of September.

Through July 22, Zirkle’s more than 1,900 domestic and H-2A-visa foreign guestworkers had been paid $4.6 million for picking 9.5 million pounds of blueberries, earning effectively $17.13 per hour, the lawsuit states. They were paid 50 cents per pound and because H-2A workers were involved all workers were guaranteed a minimum of $15.03 per hour, the lawsuit states.

On July 24, Zirkle received a DOL notice that the state’s prevailing wage for blueberry harvest had increased from 50 cents to 75 cents per pound based on state Employment Security Department wage surveys.

As of July 22, Zirkle estimated it had 5 million pounds left to pick and that the wage increase would push the cost of picking that fruit from $2.5 million to $3.75 million, the lawsuit states. With rest breaks and payroll taxes, the increase is more like $1.4 million, the suit states.

“This increase will wipe out virtually any and all anticipated profit,” the lawsuit states, adding net profit was 29 cents per pound in 2018.

Zirkle is one of the few large producers picking by hand for superior quality but the wage increase will likely cause it to turn to machine harvest, putting hundreds of farmworkers out of work, the lawsuit states.

Zirkle did not participate in the wage surveys because H-2A wages cannot be counted by the state ESD, Monahan said.

ESD improperly calculated the prevailing wage by failing to consider the different ways growers measure volumes that pickers pick, the lawsuit states.

“The prevailing wage does not reflect the actual prevailing wage for blueberry harvesters in Washington state. Rather it reflects an inadequate and procedurally deficient sampling of what appears to be an extreme minority of blueberry producers without any of the required consideration for variety, crop density, geographic or other factors,” the lawsuit states.

Monahan said per-pound rates vary depending on crop density with some fields and varieties picking at 50 cents a pound and others at up to 75 cents.

“The ESD’s survey failed to comply with basic DOL requirements and it therefore was arbitrary and capricious,” he said. “By all indications the survey was based on insufficient and inappropriate data.”

Washington’s broader tree fruit industry is also concerned about the DOL wage notice, Monahan said.

The July notice included prevailing wage increases of 13.6% for Bartlett pears and 17.6% for Skeena cherries. The Washington State Tree Fruit Association, Washington Blueberry Commission, Roy Farms and the Washington Growers League all filed motions supporting Zirkle’s motion for an injunction.

The lawsuit seeks a declaratory judgment and injunctive relief from the prevailing wage determination.

A court hearing was originally set for Aug. 12. DOL asked for a postponement, Monahan said, adding he agreed with the proviso DOL would not enforce the wage hike pending the outcome of the hearing. DOL asked the difference be held in an account and paid immediately if Zirkle loses, Monahan said.

“The parties agreed and mutually bumped the hearing to Aug. 29,” he said.

Zirkle hired 4,169 H-2A workers for tree fruit and blueberries in 2018, up 40% from the year before, according to DOL. It was approved for 2,750 H-2A workers for this season. Its workforce is about half H-2A and half domestic, Monahan said.

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