In late July 2012, officials
from the Department of Labor's Wage and Hour Division visited
Pan-American Berry Growers, B&G Ditchen and E&S Farms for spot
inspections. Nothing out of the ordinary here. Labor enforces federal
minimum-wage and child-labor laws and often conducts surprise
investigations of farms, inspects payroll records and interviews
workers.
The Oregon growers didn't think
they had reason to worry. Labor had never sanctioned them. They also
kept good payroll records and paid workers per bushel picked. Paying
minimum wage—at that time, $8.80—wasn't an issue because many workers,
paid by the bushel, picked so many blueberries that they earned double
that rate, or more.
Yet the Labor
Department's Wage and Hour division district director,
Jeff Genkos,
accused the growers of minimum-wage violations and declared the
blueberries "hot goods" under the 1938 Fair Labor Standards Act. This
charge is usually reserved for, say, T-shirts sewn by child laborers.
The effect was to stop the fruit from being shipped to customers. He
then ordered the growers to pay back wages and penalties and asked them
to sign away any right to appeal the deal.
This
represented a huge change in Labor's traditional enforcement practices.
Formerly, companies accused of hot-goods violations paid money into an
escrow account until the case could be litigated. But Labor ordered the
Oregon blueberry growers to pay the money directly into the government's
coffers, with minimal evidence of the alleged violations.
This
put the growers in an impossible spot. Either they could collectively
pay $240,435 or let millions of dollars' worth of berries rot. And they
only had a day or two to make a decision. They did what any prudent
employer would do: They paid the money, and the hot goods order was
lifted.
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