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Judge throws out ‘hot goods’ settlements

April 24, 2014

From  The Capital Press: 

Mateusz Perkowski
Published:April 24, 2014 12:10PM
A federal judge has vacated settlements deals between the U.S. Labor Department and Oregon blueberry farmers accused of “hot goods” labor law violations.

A federal judge has upheld a previous ruling that the U.S. Labor Department unlawfully coerced farmers into settling allegations of “hot goods” labor law violations.

Earlier this year, a magistrate judge recommended vacating the deals, under which three Oregon farms paid $240,000 in alleged back wages and penalties.

The Labor Department accused the farmers of paying pickers below the minimum wage in 2012 and declared the blueberries “hot goods” that can’t be shipped to buyers.

To avoid having the fruit spoil, the growers paid the settlements.

However, two of the farms — Pan-American Berry Growers and B&G Ditchen — eventually sought to have the deals overturned.

In January, U.S. Magistrate Judge Coffin agreed with the farmers that they had signed the consent decrees under economic duress and recommended invalidating the deals.

The DOL challenged this finding before U.S. District Judge Michael McShane, but he has now rejected the agency’s arguments and vacated the settlements.

In an April 24 order, McShane said the situation involved a “highly perishable product at peak harvest,” so any shipping delay “threatened to cripple the growers.”

“Under these circumstances, defendants had no choice but to agree to the consent judgments,” said McShane.

The judge also agreed with the finding that DOL had changed the implementation of its hot goods policy.

In the past, the agency allowed farms to pay the disputed amount into an escrow account if they chose to fight the allegations of labor law violations.

In this case, DOL officials did not offer the escrow option and required the growers to waive their right to appeal the findings.

“Although the government’s use of the hot goods authority is authorized by statute to resolve wage and hour violations, applying such authority in this situation, in effect, prevented defendants from having their day in court,” according to the previous ruling from Coffin.

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