By Jennifer Paul
Late summer means harvest time, but it also can mean unwanted visits from the U.S. Department of Labor (“DOL”). In 2012, the DOL found several Marion County farms in violation of wage and other labor violations. Rather than simply initiating legal action against the farms for penalties and back wages, the DOL unfairly turned the heat up on the accused farms by invoking the “hot goods” provision of the Fair Labor Standards Act.
A “hot goods” objection allows the government to prohibit the shipment, offer of shipment, or sale in interstate commerce, of any goods allegedly produced in violation of the minimum wage, overtime pay, or child labor laws. As a practical matter, the delay caused by a “hot goods” objection can put perishable crops at risk, deprive customers of product, and result in lost jobs for the farmer’s workers who are waiting on shipment and sale in order to get back to work. Because the hot goods objection can hold things up for a very long time, an action of this nature places the farmer between a rock and a hard place. To save the crop, the farmer may feel compelled to sign a declaration of guilt and pay penalties and back wages, even though the farmer, if given time, could prove that wages are not actually owed.
When the DOL applied the “hot goods” doctrine to berry famers in Marion County, it took the industry by surprise. Up until then, these sorts of objections were typically limited to businesses shipping and selling non-perishable goods. Faced with the potential loss of millions of dollars of fresh perishable blueberries, the Marion County farmers entered a consent judgment with DOL in which they gave up their due process rights and agreed to pay significant back wages, damages, and penalties. Just this year, an Oregon U.S. District Court Magistrate vacated the consent judgments citing the duress caused by interference with the sale of highly perishable crops at peak harvest. This ruling was affirmed by a Federal Judge in April 2014. Rather than let the matter die, DOL is considering its appeal options.
So what can you do to protect yourselves? There are a few steps that farmers can take before a DOL inspection to help protect against the negative outcomes of a “hot goods” objection or other allegations of violations. The following are some of those steps.
In Advance of Inspection:
- The most important step to avoid a surprise problem is to audit your wage and hour and employment policies and practices in advance of any inspection. You want to be confident that your farm complies with the law and that you will be able to prove compliance.
- To deter surprise inspections, post “No Trespassing” signs at all entry points to your property, along open fields, and by public roads. Along with the “No Trespassing” signs, provide directions to the main office for visitor check-in or a phone number for management to be contacted prior to entry.
- Train field supervisors to look for trespassers in the fields. Instruct field supervisors and crew leaders not to give express permission to DOL investigators to inspect fields. Have crew leaders direct all DOL inquiries to designated management or owners.
At the Time of Inspection:
- Contact your legal counsel prior to any inspection and before providing information to the DOL investigator. Have your attorney directly communicate with investigators, and request a 24-hour delay in inspection to consult with counsel, if needed.
- If the DOL arrives unannounced, ask to see a warrant and if one is produced, make a copy. The DOL typically must have a warrant to conduct an inspection. There are some limited exceptions to this rule: when consent is granted, when there is an emergency posing an immediate threat to health or safety, or when the “open fields” doctrine applies (i.e., violations are obvious from visible inspection and no “No Trespass” signs have been erected).
- If a warrant is produced, review the warrant to determine its scope and make certain that the investigator does not exceed that scope.
- Count the number of workers in the field when and where the inspection occurs, count the number of vehicles parked in/around any of the fields, and take photos to document this.
- Do not offer records that are not expressly requested, and do not offer additional information beyond the questions asked by the investigator.
Your attorney can help you determine whether consent to an inspection can be used as leverage to further limit the scope of the inspection. It is important to act in a professional manner while at the same time firmly requiring that the DOL follow procedures. Ultimately, being confident in your policies and practices will help an inspection go as smoothly as possible. Please contact us if you would like assistance in reviewing your policies and practices to ensure that they are compliant with the law.