Date: Aug 01, 2015
Magazine:
WG&S August 2015: AgTECH Summit Held in Salinas

The first lawyers specializing in the fresh produce industry tended to practice ag labor law, as articulated by Western Growers CEO Tom Nassif in his President’s Notes column on page 4 of this issue.

Ag labor law was heady stuff in the 1960s and ‘70s when many young lawyers took their newly-minted licenses to practice law and did battle against Cesar Chavez and his burgeoning United Farm Workers union.  Since then the need for lawyers specializing in ag labor law has ebbed and flowed in concert with the times.  But the need for lawyers to handle the many facets of running an agricultural firm has only gone in one direction.  With regulations ever increasing, lawyers specializing in everything from agricultural-related human resources issues to water management to environmental concerns to food safety issues have proliferated.

A few pages further in this issue, a list of member firms of Western Growers that practice law begins, and runs more than a handful of pages deep as there are dozens of companies in that category.  The listings note the areas of specialization of each firm, as well as whether the firm is a member of the Western Growers Ag Legal Network.  That designation means the firm offers a discount to Western Growers members in certain types of cases, as articulated by each firm.

Below, several of those lawyers discussed the trends they currently see in ag law and a few of the areas where there might have been an uptick in activity over the past year.

WG Vice President & General Counsel Jason Resnick opined that piece rate compensation is an area of concern as employers try to comply with new rules covering wages for piece rate employees.  In November 2013, the state’s labor commissioner issued an interpretation determining that rest periods had to be paid at the average hourly piece-rate wage rather than the standard minimum wage calculation that many employers followed.  “Along with other ag associations, we have challenged the labor commissioner’s interpretation,” he said.  “Unfortunately we don’t expect to even have an initial hearing on the issue until March of 2016.”

The WG executive said new rules about paid sick leave also went into effect on July 1.  Conflicting guidance has led to a lot of confusion.  “The new law is not particularly well written,” said Resnick.  “And so-called ‘clean up’ legislation that went into effect on July 13th has done little to improve the language.”

For example, he noted that in one area the laws calls for paid sick leave to cover 24 hours or three days.  In agriculture, many employees work 10 hour shifts.  Does the law require three days’ pay (i.e., 30 hours) or 24 hours of pay, which are not necessarily the same?

In general, he said there are more wage and hour cases than ever before.  “It is very important that employers have up-to-date policies that are comprehensive, including spelled-out policies on meal and rest periods.  Then employers need to adhere to those policies.”

To help keep employers up to date, Western Growers offers the Personnel Procedures Manual, updated annually to keep abreast of changes in laws and regulations.  The manual can be purchased online at www.wga.com/PPM.

Patricia Rynn of Rynn & Janowsky, Irvine, CA, has long specialized in PACA law, including the PACA Trust, which allows the opportunity for produce companies to put themselves in a priority position for their unpaid invoices in the event of a bankruptcy by a buyer of their fresh produce.

PACA case law is fairly mature and Rynn said there have been no new wrinkles in this past year that have caught the industry off-guard.  In fact, she said it has been a bit easier obtaining temporary restraining orders against the movement of assets of insolvent receivers than it was before.  “Certain pockets (of the country) have been a little more difficult to work with, but this year we’ve had some good success even in places like Chicago, which has historically been more difficult.”

She explained that often it is necessary to get a no-notice TRO so assets can’t be shifted and hidden.

While Rynn said the California fresh produce shipper community is very well versed on PACA law, occasionally there are some shippers that don’t know how to protect their rights.  “Typically they come from industries where fresh produce isn’t their sole item.  For example, frozen foods do have PACA rights, but often the companies are not informed as to what to do and how to protect them.”

She said sometime growers, who aren’t required to have a PACA license, are also uninformed about protecting their PACA rights against marketing agents.  They don’t typically include the correct language on their invoices that protect those rights.

This past year, Rynn has also seen an increase in cases against both USDA and California Department of Food and Agriculture regulations dealing with marketing orders and shipping regulations.  In June, the U.S. Supreme Court ruled that the raisin marketing order didn’t reflect current marketing conditions and ruled against the regulations.  She said there are many other regulations that tend to be outdated and she is seeing more questioning of restrictive regulations that limit shipments based on size or grading requirements.

Rynn opined that in the 1930s when many of these regulations were put into effect, they helped protect the industry.  But different circumstances exist today and the same levels of protection are not necessarily needed.

Aaron Colby, an attorney in the Los Angeles office of Davis Wright Tremaine LLP, told WG&S “one of the biggest trends I see for the agriculture industry in California as it relates to employment law issues and risks is the industry’s reliance on farm labor contractors.”  He said that as of Jan. 1, 2015, businesses are directly liable for workers supplied by labor contractors when those labor contractors fail to correctly and completely pay wages or fail to provide workers’ compensation insurance coverage for their employees.  “Businesses using workers from labor contractors are liable to such workers for unpaid wages, even if they have already fully paid the labor contractor,” he said.

Under previous law, he said a worker for a temporary staffing agency or labor contractor was required to prove the existence of a “joint” or “co-employment” relationship to impose liability on the business where they performed their duties.  The new law, however, makes this showing unnecessary.  The result is an expansion of liability to workers of labor contractors when their actual employers fail to obey the law.

He advises business to carefully select new labor contractors and reevaluate existing contractor relationships, focusing on the contractor’s compliance with relevant labor laws, especially with respect to payment of wages.  When the financial viability of a contractor is in question, businesses may wish to consider hiring workers directly.

Colby also echoed Resnick’s concern about the new paid sick leave law.  He said employers are now required to provide paid sick leave to full-time, part-time, temporary, and other employees not covered by a collective bargaining agreement that provides similar paid sick leave benefits, and who have worked in California for at least 30 days within a year.  He recommended a careful reading of the new regulations.

Dale Stern, who is the chair of the food and agriculture practice for Downey Brand LLP firm, headquartered in Sacramento, said the company’s practice is very diverse.  “We have more than 100 lawyers in Stockton, Reno, the Silicon Valley and San Francisco practicing a broad spectrum of law.”  He said almost half of those attorneys are connected with the food and ag practice in some way.  The firm litigates in areas as diverse as water, land use, PACA work, pest control issues and California Market Enforcement Bureau cases.

Discussing some of the more interesting litigation he has been involved in, Stern pointed to a chemical drift case where the spraying of an herbicide on 450 acres to kill some weeds ended up damaging 4,000 acres of crops, including some organic production, wine grapes, corn and blueberries.  “The number of drift cases has increased dramatically in recent years.”

And he sees no letup in sight as environmental groups attack more and more pesticides.  He said growers need to carefully examine their chemical application procedures and make sure they keep them at a minimum, especially aerial applications.

Another trend he has noted is increased activism at local levels on issues that were typically left to state regulators.  “We are dealing with more and more local ordinances all the time,” he said.

Stern advised businesses to make sure they stay abreast of these rules and regulations or they may be inadvertent violators subject to big fines.  “You can’t just look at the ag code or CDFA regulations.  You better look at local jurisdictions and see if any of their rules impact you.”

The Downey Brand attorney said the pure expansion of water lawyers in his firm point to the trend in that direction.  “We have 21 or 22 water lawyers focused on keeping water flowing.  That area of the law is booming.”

Ron Barsamian of Barsamian & Moody, a Fresno, CA, firm, has spent much of his time during this last year battling labor issues on the well-known Gerawan case.  For the uninitiated, the case revolves around California’s Mandatory Mediation and Conciliation (MMC) law.  After winning an election in the early 1990s, the United Farm Workers abandoned the negotiations at Gerawan for more than 20 years before filing unfair labor practices charges with the Agricultural Labor Relations Board through its general counsel several years ago.

Gerawan was the grower in the case and the battle has been ongoing, with Gerawan winning several key points against the ALRB and its general counsel.  Barsamian said those wins have had some very good results for agricultural employers.  He said the general counsel has been ordered by the ALRB to no longer file injunctions in court without giving the ALRB notice.  In addition, the ALRB chairman has announced plans to consider procedural changes with regard to dealing with unfair labor practices after an election has been held.

The longtime agricultural industry attorney said this is the result of a November 2013 election held at Gerawan in which the ballots have still not been counted because the general counsel has been investigating unfair labor practice charges.  Barsamian said the highest priority should be in counting the ballots and that position has been affirmed by the courts.

In a somewhat related area of the law, Barsamian noted in mid-July that the UFW had been particularly active in the previous two weeks filing notices of intent to take access (NA) for the purpose of organizing farmworkers at various locations.  He said the UFW is typically active at this time of year, but their method of operation has been a bit different this year as it appears to be a more surgical effort over a wider geographic region.  In any event, he urged employers to consult ag labor attorneys as to their rights and obligations with regard to granting access.  While there have been no changes in this area of the law recently, he said it is always best for employers to make sure they and their farm labor contractors are well acquainted with the rules and are acting properly.

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Tom Nassif