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Feds used 'economic duress' to force Oregon farms to capitulatate, says judge

The U.S. Department of Labor has been found guilty of using “economic duress” to force two Oregon farmers into paying huge fines and signing away their rights of appeal in order to save crops.

Under Oregon law, agreements reached when one party is under duress are not valid. U.S. District Court Magistrate Judge Thomas Coffin ruled Jan. 15 that two “hot goods” enforcement actions in 2012 should be vacated.

The provision of federal law known as “hot goods” was crafted around the turn of the century to deal with serious infractions at garment factories. The regulation was intended to be enacted only in cases where labor violations were “willful, egregious and/or repeated.”

Dave Dillon, executive vice-president of the Oregon Farm Bureau, said Coffin’s decision amounted to a “repudiation” of Labor practices that could have eventually threatened any business with a workforce.

“We’ve said all along that these farmers did not get their due process rights and this ruling really confirms that,” he said. “If we had written the ruling, I’m not sure we’d have written it any stronger than Judge Coffin did.”

Although Labor is likely to appeal the decision, Dillon said the argument is really about civil liberties, which higher courts have a history of upholding.

“In 17 years with the state’s largest agricultural organization and over six years in a U.S. senate office, I’ve never seen such reckless disregard for due process than what USDOL has shown in these cases. The judge’s ruling sends a clear signal that the enormous power of federal government agencies must be applied in ways that respect citizens’ right to review and appeal.”

At issue are August 2012 inspections at the blueberry farms of Pan-American Berry Growers of Salem and B&G Ditchen of Silverton. The owners of these operations were forced to pay Labor’s demand of $220,000 to settle allegations of minimum wage law violations before being allowed to move their fruit to market.

In addition, the agency’s Wage and Hour Division notified wholesalers that berries from the two farms had been subjected to a “hot goods” order and should not be processed.

Along with payment of the money in order to sell their crops, the farmers were directed to sign away their right of protest without ever seeing in writing exactly what they were being accused of.

They were told by inspectors that it was impossible for one worker to have picked as much as payroll records indicated. Therefore, they were accused of violating minimum wage law by having two people work on the same ticket and paying only one individual.

In media reports, Greg Ditchen, a third-generation grower, said he was told that “everything would go away” if he paid the fine and gave up his right to contest the order – even if later information found that he was in the right.

If he decided to fight the charges, he faced the likelihood of having his crop go to waste and losing a major portion of his income.

“We had to make a business decision and sign the paper,” Ditchen said, calling what happened to him “extortion.”

Although the court case brought before Coffin involved only two farmers, Dillon said nine were targeted by “hot goods” enforcement across the nation in 2012.

He said the farm bureau is now educating agriculturalists about what their due process rights are when an inspector shows up for a random visit. In the past he said most inspections were complaint-driven, something that appears to have changed.

In 2012, U.S. Reps. Greg Walden, Kurt Schrader, Peter DeFazio and Suzanne Bonamici, along with U.S. Sens. Ron Wyden and Jeff Merkley, demanded information from Hilda Solis, then secretary of Labor, about how enforcement decisions were made. The letter sent by the Oregon delegation was not answered for six months and copies of documentation used in Labor decision-making were not attached as requested.

Walden, a Republican whose Second Congressional District encompasses Hood River and Wasco counties, applauded Coffin’s recent ruling.

“Oregon’s farmers need clear rules so they can remain focused on growing crops, not complying with overly burdensome federal red tape,” he wrote in a Jan. 16 press release. “I am glad to hear that Judge Coffin has acknowledged the heavy-handed tactics the department of labor used against the blueberry growers in Oregon. The court vindicated what many of us believed from the beginning: holding perishable crops hostage places the producer under economic duress and leaves them with little option but to pay the fines and admit guilt. That’s not right or fair.”

He called upon Labor officials to change their tactics, something that Dillon believes the court has mandated.

“From day one, we focused on two goals: Help these farms correct the wrong that was done to them and ensure that no farm family ever has to endure this kind of careless and overzealous disregard for civil liberties again,” said Dillon. “With this ruling, we’ve taken a giant step toward both goals, but we’re not finished yet.”

The farm bureau took the lead in helping the Oregon farmers fight the enforcement action. After Labor refused to release a single document in response to a 10-point public records request in early 2013, Farm Bureau filed a federal lawsuit to compel their release under the Freedom of Information Act.

Nearly a year later, the agency handed over five large binders of information, though some was heavily redacted. The farm bureau is still in negotiations with the U.S. Department of Justice to get the last of the documents and challenging redactions that do not seem warranted.

“We’re in the process of making sure USDOL has provided the documents it must provide under the law,” said Dillon. “Once we know that we have them all, we’ll complete a thorough analysis. A cursory look through the materials received to date tells me this story is far from over.”

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