Hot Goods

At the recent Fruit Conference we attended put on by the NSAC, Dustin Klinger, a Partner with Miller Nash, touched on a recent court case from Oregon during his presentation regarding a blueberry farm, the Department of Labor and a “hot goods” provision of the Fair Labor Standards Act and there have been recent developments that favor farmers.

For those who are not familiar with the case, the basics are the DOL initiated an investigation into an Oregon blueberry farm and utilized their own formula based on average berries picked by workers over a one-month period and determined that any workers who picked more than that average must have been supported by “ghost workers” and estimated 287 “ghost workers” were working on this farm for roughly a year, based on the volume of berries picked.  The DOL used the hot goods provision to essentially freeze the sales of any blueberries and down line purchasers were informed not to take any shipment from this farm.  The DOL gave the option of admitting guilt to undisclosed violations and pay around $200,000 or let the berries rot.

Given those options, the farm decided to pay the fines, however, recently sued the DOL for these tactics and US Magistrate Judge Thomas Coffin ruled the DOL “unfairly stacked the deck” against the blueberry growers by making them sign admissions of guilt under economic stress.  He wrote in his ruling “Although the government’s use of the hot-goods authority is authorized by statute to resolve wage-and-hour violations, applying such authority to perishable goods in this situation in effect prevented (the) defendants from having their day in court.”

In the least, the DOL should have allowed the sale of the goods and had the money put in escrow.  Nonetheless, this is a huge win for farmers and we will see if the DOL appeals the ruling.

Special thanks from David Enquist in the Moses Lake office for this post.

Paul Neiffer