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September 14, 2018

Legal Issues Gain Complexity Matching Modern Times

It’s a complicated world with far more nuances than a generation ago, which has led to a matching of complexity in the legal issues that agricultural firms face.

Battles with farmworker unions dominated the ag legal scene a generation ago. Today, the issues that companies deal with are wide ranging with 2018 bringing particular focus on liability when fires occur, wage and hour issues, and whether company-provided travel time should be compensated. Many standard business issues such as patent and trademark work were also in the forefront, while dealing with union activity fell down the list of concerns in terms of frequency of action.

Jason Resnick, vice president and general counsel for Western Growers, said wage and hour issues continue to be a major focus of every employer as employee advocates continually look for missteps that can turn into class action lawsuits. Companies have to be diligent in their adherence to regulations as even inadvertent activity dealing with overtime, lunch breaks and rest periods can turn into very costly mistakes. He said an area of particular concern this year is compensation for travel time when a firm provides the transportation.

Resnick explained that the California Supreme Court addressed the issue in an ag-specific case in 2000 titled Morillion vs. Royal Packing Co. “Basically the court determined that if the transportation is voluntary it is not compensable,” he said. “But if it is mandatory, the workers must be compensated for their travel time.”

In that case, Royal Packing required workers to assemble at a meeting place and then board a bus that would take them to the field to begin their work. Royal Packing did not want cars in the field so they mandated this transportation mode. The court ruled that the workers would be on the clock beginning at the time they were required to be at the meeting place. “The industry has been guided by that precedent ever since,” Resnick said.

Most companies offer transportation to the field as a courtesy but do not require workers to use the company-provided bus ride. Resnick said typically the buses have a notice posted that informs the workers that riding the bus is voluntary and not mandatory.

That concept is currently being challenged by worker advocates, especially when it comes to H-2A workers, in which case the providing of transportation to the workplace is mandated by the Department of Labor regulations governing the temporary worker program. “We are in the early stages of this issue,” said Resnick. “The industry is currently coordinating its response to the challenges as several lawsuits have been filed.”

Mike Saqui of The Saqui Law Group was even more blunt, calling it the number one issue facing ag employers and argued that it will be a bigger problem than the fight over non-productive time (NPT) that the industry faced several years ago. That battle resulted in California legislation (AB1513) that mandated compensation to piece rate employees for rest and recovery periods and other non-productive time.

In August, Saqui and several other attorneys held an informational session in Salinas, CA, explaining the issue and rallying support around the fight against it. Coalescing under the banner California Farmers for Fairness, the group’s flyer noted: “This is a real threat for all ag employers as it will increase employer liability, require a significant increase in compensation, and impact meals, breaks and overtime while decreasing employee production just as new overtime requirements and minimum wage increases are about to take effect. Any settlement or legislative fix will open the floodgates to increased litigation as predatory attorneys will move quickly to file claims against ag employers throughout California.”

The group noted that hikes in minimum wage are already causing ag employers’ labor costs to skyrocket and urged all ag employers and farm labor contractors to defend the industry against this challenge.

While the Royal Packing decision would seem to have settled the law where it comes to resident employees that have the option of getting to work in many different ways, the H-2A laborers might be able to make a different argument.

Terry O’Connor, who is an ag labor law attorney with Noland, Hamerly Etienne & Hoss in Monterey, CA, said attorneys for the H-2A workers could argue that those employees have no other options and must take the company-provided transportation to work.

Resnick would not concede that point but he does caution employers to examine their own circumstances when making decisions with regard to paying for travel time. He said employers should give special attention to H-2A workers and also workers that must travel great distances and spend multiples hours in a company bus because a field is many miles away.

In another area of legal concern, O’Connor said “waiting time” issues are surfacing in many different industries that could impact agricultural employees. He said one case involves ambulance drivers who are on-call. Should that be paid time? While it is not a direct comparison, he said produce truck drivers might ask the same question about their work.

He also reminded growers that using a farm labor contractor is not a shield from liability. Many court cases have held that the grower is responsible for the miscalculations of a labor contractor when it comes to wage and hour issues. “If you are using a labor contractor, you better be auditing them to make sure they are in compliance with all the regulations,” he said.

O’Connor said that some employers are demanding greater control over the contracted workforce noting that if they have liability, which they do, they should have more control.

Western Growers’ Resnick said sexual harassment issues are just as important in agriculture as they are in the high profile cases that have made the front pages of our daily newspapers over the last year. He said all employees have the right to do their jobs in safe work environments and not be subject to sexual harassment. Employers need to train their employees and supervisors and not tolerate unsafe working conditions. He said the #metoo movement cuts across all industries and agricultural employers are not immune to the shine of the spotlight on offending supervisors.

Another issue that has been in the news quite a bit over the last year is California wild fires. Shawn Caine, who operates a law firm of the same name, is a wildfire specialist, who has been litigating wildfire liability for more than two decades. “California has suffered some of the most dramatic and catastrophic wild fires in the last three to four years,” he said, adding that the catastrophic label is measured by the many lives these fires have taken.

From his perspective, Caine said drying forests, increased fuel in the forests and more urban interface in the wild are the chief causes of the devastation of these fires. His specialty is litigating wildfires that are caused by power lines. While that is not always the case, power companies are often the culprit. Caine said there were 16 wildfires in Northern California in the fall of 2017 with each of them caused by power lines in one way or another. Power lines were also the cause of Ventura County’s devastating Thomas Fire, which ignited in early December of 2017.

When power lines are involved, power companies are liable and victims are typically made whole through the filing of lawsuits. While many lawsuits have been filed by avocado growers and other agriculturalists because of the Thomas Fire, Caine said not all growers have filed their suits yet. He urged them do so.

“Those cases are moving. All the cases have been consolidated into one court room and the process has begun.”

While statute of limitation laws generally give victims two to three years to file a suit, Caine urged growers to do so quickly to be on the ground floor of settlement discussions. He argued that there is no reason to wait and those who file first will generally have their cases settled first.

He said these wildfire cases are classified as “mass torts” not class action suits. The circumstances of each victim is different and so the settlements are individual.

Jeff Gilles, managing partner of JRG Attorneys at Law with several offices in the Salinas Valley area, is another attorney with a perspective on current legal issues facing the industry. “Over-regulation is the biggest problem,” he said, adding that it is the “unintended consequences” of many regulations that cause the biggest concern for agriculture and the majority of work for ag attorneys.

He also noted that, like many grower-shippers, JRG has expanded significantly in the past several years by acquiring several law firms that specialize in other areas of the law. The latest acquisition was the purchase of LaRiviere, Grubman PC, a firm specializing in intellectual property rights. With the industry looking for new solutions to old problems, Gilles said intellectual property law is a driver of new business for lawyers. New technology development means more patent and trademark work.

The firm also has experts working on cannabis law. Gilles calls it “just another ag item” that faces many of the same legal issues as other crops … and of course many more as well. But he said these companies operating in the cannabis arena are facing labor issues, wage and hour regulations, human resource problems, concerns about distribution and the need to protect variety development. He believes it is only a matter of time that they face attempts to unionize the cannabis shop.