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Major Farm to Pay $3.5 Million for Alleged Anti-U.S. Labor Bias (1)

Nov. 19, 2019, 3:07 PMUpdated: Nov. 19, 2019, 7:08 PM

Munger Bros. LLC, the world’s largest producer of fresh blueberries, has agreed to pay $3.5 million after Labor Department investigators found the company illegally hired foreign visa-holders over United States citizens.

The company gave preferential hiring treatment to foreign laborers with temporary H-2A visas, the Labor Department said in a recent complaint. Munger Bros. also underpaid those workers and provided them with substandard living quarters that were “infested with bed bugs” and had “inoperable toilets, windows with metal bars, and inoperable smoke alarms,” the department said.

The company, which operates farms in California and Washington, agreed to pay $2.5 million in back wages to underpaid workers and another $1 million in civil money penalties to resolve the case, according to documents filed Nov. 18 in federal court. Munger Bros., which didn’t admit any wrongdoing, also agreed not to seek H-2A visas for foreign farm workers for the next three years.

The H-2A program requires employers to make efforts to hire qualified citizen workers before turning to visa-holders. The department said Munger Bros. rejected some qualified citizen workers and delayed bringing in others until after running out of H-2A workers.

“We hoped for a more fair resolution of the matter, but we accepted the settlement,” Tad Hoppe, an attorney representing the company, told Bloomberg Law. “We’re going to move forward and continue to be a good employer.”

The settlement comes as the Trump administration continues to crack down on visa abuse, primarily involving H-1B workers in tech and other white-collar jobs. The Labor Department has recently gone after Cisco Systems Inc. and Oracle Corp., among others, over alleged preferences for visa workers who are often paid less than U.S. citizens doing similar work.

The administration hasn’t been as aggressive when it comes to oversight of temporary farm workers. The Labor Department recently unveiled new rules meant to streamline the H-2A system for temporary agricultural workers, which is separate from the H-1B visa process. Critics fear the proposed changes would make it easier for farm companies to hire foreign visa-holders over American laborers and pay them less.

Meanwhile, some legal rights groups say the administration’s broader effort to crack down on undocumented immigration has emboldened Munger Bros. and other employers to impose harsh conditions on workers.

State and federal regulators put Munger Bros. under a microscope after the 2017 death of a Mexican worker who collapsed at a company farm in Sumas, Wash. The Washington Department of Labor and Industries fined Munger Bros. $150,000 the following year for refusing to give workers rest and meal breaks.

It’s not clear what spurred the Labor Department’s investigation.

A group of 600 farm workers on H-2A visas sued Munger Bros. and its subsidiaries last year, alleging that the companies violated labor trafficking laws by threatening to send workers home if they complained about conditions, and making vague references to connections with U.S. Customs and Border Protection officials.

The company also provided “insufficient and unhealthy food” to temporary workers, housed them in a detention-center-type facility, and refused days off for sick and injured workers, according to a complaint filed in a Seattle federal court.

The labor department agency didn’t respond to requests for comment.

The case is Scalia v. Munger Bros., LLC, E.D. Cal., No. 19-02329, proposed order on consent judgment filed 11/18/19.

To contact the reporters on this story: Chris Opfer in New York at copfer@bloomberglaw.com; Ben Penn in Washington at bpenn@bloomberglaw.com

To contact the editors responsible for this story: Jay-Anne B. Casuga at jcasuga@bloomberglaw.com; Laura D. Francis at lfrancis@bloomberglaw.com; John Lauinger at jlauinger@bloomberglaw.com