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August 12, 2022

ALRB Assesses Civil Penalties for Willful Misclassification of Workers

On July 28th, the Agricultural Labor Relations Board (ALRB) issued a decision that, for the first time, assesses civil penalties against an employer that fired a group of farmworkers it misclassified as independent contractors.

In 2017, Marisol Jimenez, a farmworker employed with Cinagro Farms, filed a complaint with the ALRB alleging that his work crew was unlawfully terminated after complaining about not receiving proper paystubs with their paychecks. The crew of farmworkers were designated by Cinagro as independent contractors resulting in no taxes being withheld from the workers’ paychecks.

In its decision, the Board concluded that Cinagro’s misclassification of the crew, by itself, supports finding a separate violation of Agricultural Labor Relations Act (ALRA) section 1153(a), which deems as an unfair labor practice an attempt by an employer to interfere with, restrain, or coerce agricultural employees in the exercise of the right to engage in protected concerted activity.

The Board also affirmed the dismissal of a separate allegation concerning the foreman of the crew; however, the Board stated that it will prospectively recognize an additional exception to the general rule that supervisors are not entitled to protection under the ALRA, and concluded the protection of the Act would be extended to cover a supervisor who serves as a conduit for reporting employees’ complaints about misclassification to their employer, and then is discharged for doing so.

The Board concluded that it has authority to assess civil penalties under Labor Code section 226.8, and that the record in this case demonstrated “willful misclassification” of the crew by Cinagro. Finally, the Board concluded that Labor Code section 226.8 obligates Cinagro to offer reinstatement to the entirety of the terminated crew, including the crew foreman.

The Board rejected Cinagro’s argument that only the Labor Commissioner may issue a determination an employer has misclassified its workers and assess penalties pursuant to Labor Code section 226.8.  The Board has directed further proceedings be commenced to identify the appropriate amount of civil penalties.

Rob Roy, President and General Counsel for Ventura County Agricultural Association, represents Cinagro Farms, which plans to challenge the decision.

Look for an upcoming article in the Western Grower & Shipper taking a deeper dive into the Cinagro Farms decision and its impact on agricultural employers.