An attorney who frequently represents the fruit industry is warning growers to double-check Washington’s farm labor contractor rules before putting to work anybody they did not directly hire themselves.
A March decision by the Washington Supreme Court has broadened the definition of farm labor contractor beyond what growers previously believed, said Sarah Wixson, a lawyer and shareholder with Stokes Lawrence Velikanje Moore & Shore in Yakima, Washington.
“I think quite a few people are still getting it wrong and the financial consequences can be dire,” Wixson said in an email to the Good Fruit Grower. Violations could mean a fine of up to $5,000 or legal damages of $500 per person per violation dating back three years.
On March 3, the Supreme Court ruled 9-0 that an on-site farm management company was indeed required to have a farm labor contractor license from Washington and upheld an earlier $1 million judgment against the firm for lacking one. The companies the management firm worked for were also on the hook.
For 20 years, NW Management and Realty Services of Pasco, Washington, was hired by Farmland Management Services, a California firm, to operate three Yakima area orchards. Farmland, in turn, was hired by property owners John Hancock Life and Health Insurance Company and Texas Municipal Plans Consortium.
As part of their contract with Farmland, NW Management supervisors hired workers. The court agreed that constituted hiring for a “fee” and therefore required a farm labor contractor license, which the company did not obtain.
The company has since closed, Wixson said.
The issue first came up in a U.S. District Court lawsuit alleging worker abuse that was settled, but the license question was appealed to the 9th Circuit Court of Appeals, which certified it to the state Supreme Court on Aug. 5 last year.
In the wake of the decision, Wixson and the plaintiff’s attorney, Lori Isley, warn that straight payroll reimbursement or something small such as allowing a driver to fill up a gas tank at the farm may be interpreted as a “fee” under state law.
“I would say both of those entities should be cautious about what they’re doing,” said Isley, an attorney with Columbia Legal Service’s Yakima office.
Meanwhile, many orchard families build corporate structures with several different LLCs that each own different properties for purposes of irrigation and insurance.
In those cases, they may require a license to simply move workers from place to place, Wixson said.
Wixson advises growers to carefully review the state’s Labor and Industries website that spells out the license rules, something her firm started preaching years ago, she said.
The message may be getting out, said Matthew Erhlich, a spokesman for the state Department of Labor and Industries, which oversees farm labor contractor’s licenses.
In the first four months this year, the department has issued 169 annual licenses and expects to reach 500 licenses by the end of the year. In all of 2015, the agency issued 166 licenses — at the time the most ever — and 147 licenses in 2014.
Licenses cost $35, plus a requirement to post a bond of between $5,000 to $20,000 depending on the number of employees.
The department, which has a labor contractor inspection team, has increased the number of audits over the past few years, from 20 in 2014 to 29 last year to 21 the first three months of 2016.
State regulators never tagged NW Management because they never received a complaint, Ehrlich said. That proves that even reputable companies need to tread carefully, Wixson said.
“NW Management was a well-known, well-established farm management company,” she said. •
– by Ross Courtney
ONLINE To review the Farm Labor Contractor license regulations, visit 1.usa.gov/1pXwyLR
Ross Courtney is an associate editor for Good Fruit Grower, writing articles and taking photos for the print magazine and website. He has a degree from Pacific Lutheran University. -- Follow the author -- Contact: 509-930-8798 or email.