[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]





                    HEARING TO REVIEW THE IMPACT OF
                     ENFORCEMENT ACTIVITIES BY THE
                    DEPARTMENT OF LABOR ON SPECIALTY
                              CROP GROWERS

=======================================================================


                                HEARING

                               BEFORE THE

  SUBCOMMITTEE ON HORTICULTURE, RESEARCH, BIOTECHNOLOGY, AND FOREIGN 
                              AGRICULTURE

                                 OF THE

                        COMMITTEE ON AGRICULTURE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 30, 2014

                               __________

                           Serial No. 113-20


          Printed for the use of the Committee on Agriculture
                         agriculture.house.gov


                                ______

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                        COMMITTEE ON AGRICULTURE

                   FRANK D. LUCAS, Oklahoma, Chairman

BOB GOODLATTE, Virginia,             COLLIN C. PETERSON, Minnesota, 
    Vice Chairman                    Ranking Minority Member
STEVE KING, Iowa                     MIKE McINTYRE, North Carolina
RANDY NEUGEBAUER, Texas              DAVID SCOTT, Georgia
MIKE ROGERS, Alabama                 JIM COSTA, California
K. MICHAEL CONAWAY, Texas            TIMOTHY J. WALZ, Minnesota
GLENN THOMPSON, Pennsylvania         KURT SCHRADER, Oregon
BOB GIBBS, Ohio                      MARCIA L. FUDGE, Ohio
AUSTIN SCOTT, Georgia                JAMES P. McGOVERN, Massachusetts
SCOTT R. TIPTON, Colorado            SUZAN K. DelBENE, Washington
ERIC A. ``RICK'' CRAWFORD, Arkansas  GLORIA NEGRETE McLEOD, California
SCOTT DesJARLAIS, Tennessee          FILEMON VELA, Texas
CHRISTOPHER P. GIBSON, New York      MICHELLE LUJAN GRISHAM, New Mexico
VICKY HARTZLER, Missouri             ANN M. KUSTER, New Hampshire
REID J. RIBBLE, Wisconsin            RICHARD M. NOLAN, Minnesota
KRISTI L. NOEM, South Dakota         PETE P. GALLEGO, Texas
DAN BENISHEK, Michigan               WILLIAM L. ENYART, Illinois
JEFF DENHAM, California              JUAN VARGAS, California
STEPHEN LEE FINCHER, Tennessee       CHERI BUSTOS, Illinois
DOUG LaMALFA, California             SEAN PATRICK MALONEY, New York
RICHARD HUDSON, North Carolina       JOE COURTNEY, Connecticut
RODNEY DAVIS, Illinois               JOHN GARAMENDI, California
CHRIS COLLINS, New York
TED S. YOHO, Florida
VANCE M. McALLISTER, Louisiana

                                 ______

                      Nicole Scott, Staff Director

                     Kevin J. Kramp, Chief Counsel

                 Tamara Hinton, Communications Director

                Robert L. Larew, Minority Staff Director

                                 ______

  Subcommittee on Horticulture, Research, Biotechnology, and Foreign 
                              Agriculture

                    AUSTIN SCOTT, Georgia, Chairman

VICKY HARTZLER, Missouri             KURT SCHRADER, Oregon, Ranking 
JEFF DENHAM, California              Minority Member
STEPHEN LEE FINCHER, Tennessee       SUZAN K. DelBENE, Washington
DOUG LaMALFA, California             JIM COSTA, California
RODNEY DAVIS, Illinois               MARCIA L. FUDGE, Ohio
CHRIS COLLINS, New York              ANN M. KUSTER, New Hampshire
TED S. YOHO, Florida                 JUAN VARGAS, California
                                     SEAN PATRICK MALONEY, New York

                                  (ii)
                                  
                                  
                                  
                             C O N T E N T S

                              ----------                              
                                                                   Page
Schrader, Hon. Kurt, a Representative in Congress from Oregon, 
  opening statement..............................................     4
Scott, Hon. Austin, a Representative in Congress from Georgia, 
  opening statement..............................................     1
    Prepared statement...........................................     3

                               Witnesses

Weil, Ph.D., David, Administrator, Wage and Hour Division, U.S. 
  Department of Labor, Washington, D.C...........................     7
    Prepared statement...........................................     9
    Supplementary information....................................    43
    Submitted questions..........................................    46
Avakian, Hon. Brad, Commissioner, Oregon Bureau of Labor and 
  Industries, Portland, OR.......................................    13
    Prepared statement...........................................    15
    Submitted questions..........................................    48

                           Submitted Material

Walden, Hon. Greg, a Representative in Congress from Oregon, 
  submitted statement............................................    41

 
                    HEARING TO REVIEW THE IMPACT OF
                     ENFORCEMENT ACTIVITIES BY THE

                    DEPARTMENT OF LABOR ON SPECIALTY
                              CROP GROWERS

                              ----------                              


                        WEDNESDAY, JULY 30, 2014

                  House of Representatives,
Subcommittee on Horticulture, Research, Biotechnology, and 
                                       Foreign Agriculture,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Subcommittee met, pursuant to call, at 10:01 a.m., in 
Room 1300, Longworth House Office Building, Hon. Austin Scott 
[Chairman of the Subcommittee] presiding.
    Members present: Representatives Scott, Hartzler, Yoho, 
LaMalfa, Schrader, DelBene, Kuster, and Costa.
    Staff present: John Goldberg, Josh Mathis, Kevin Kramp, 
Mary Nowak, Nicole Scott, Tamara Hinton, Keith Jones, and Liz 
Friedlander.

  OPENING STATEMENT OF HON. AUSTIN SCOTT, A REPRESENTATIVE IN 
                     CONGRESS FROM GEORGIA

    The Chairman. Good morning. This hearing of the 
Subcommittee on Horticulture, Research, Biotechnology, and 
Foreign Agriculture to review the impact of enforcement 
activities by the Department of Labor on specialty crop 
growers, will come to order.
    I am going to read an opening statement followed by my 
colleague Mr. Schrader, from Oregon. And again, I would like to 
thank you all for being here today to discuss an issue that has 
become an increasingly difficult challenge for farmers in their 
day-to-day operations. The purpose of today's hearing, of the 
Subcommittee on Horticulture, Research, Biotechnology, and 
Foreign Agriculture, is to address the growing concern of the 
Department of Labor's use of the so-called hot goods provision 
under the Fair Labor Standards Act of 1938.
    The original purpose of this provision which, again, was 
written in 1938 was to protect workers from poor working 
conditions and negligible employers. Let me be clear, neither I 
nor anyone else on this Committee condones violations in regard 
to the Fair Labor Standards Act in any way. We believe it is 
important to provide fair wages for agricultural workers yet 
this law was not intended for use with regards to fresh fruits 
and vegetables which perish more easily than a manufactured 
good.
    That said, we are aware of multiple and effective tools 
that the Department of Labor can use without having to resort 
to their discretionary authority under the hot goods provision. 
To be clear, the Labor Department has authority to compel 
specialty crop producers and packers to reimburse workers when 
wages fall short of the minimum wage requirement without using 
the hot goods provision.
    This issue that we will discuss today is the Department of 
Labor's abuse of this discretion when applying hot goods 
provision to perishable agricultural commodities. In these 
cases, producers are not only liable for civil fines and back 
wages to workers, but the fines and penalties pale in 
comparison to the economic damages brought about by the 
Department of Labor's destruction of their crops.
    The Department does not set fire to these crops, but they 
do create a scenario under which the crops would naturally 
perish. The Department relayed to us that they used this 
provision sparingly in the past. What they have failed to 
acknowledge is the inexcusable use of a tool which Congress 
never granted or intended; that is, the tool of fear, and 
intimidation.
    The Department has used this fear far too often to extort 
concessions from producers with little, if any, proof of 
wrongdoing. This Committee recognizes the importance, ``to 
assure work-related benefits and rights'' as the Department's 
mission statement refers. I hope we all would agree that these 
rights are not only established in law, but in the fabric of 
the rights guaranteed to us in our Constitution.
    The Department's actions are so intrusive that they 
threaten the ability of employees to enjoy these rights by 
extorting employers into bankruptcy and closure. We fear that 
this is the direction the Department is pursuing regarding 
berry producers in the Pacific Northwest. In at least one of 
these cases, the producer courageously chose to fight this 
rogue agency, and prevailed in Federal Court against the 
Department, where the Department of Labor was found to have 
forced the producer to admit guilt under duress.
    We find ourselves in a situation where the Department is 
attempting to intimidate this producer by using what it 
believes to be the apparently inexhaustible supply of taxpayer 
funds to bankrupt this producer through a seemingly endless 
appeals process in the courts. And what has not been 
adjudicated is the original claim by the Department of Labor 
that the producer had more than 1,300 so-called ghost workers 
who never received compensation. Thirteen hundred workers would 
be like having the entire high school, where I graduated, in 
the field.
    Where did this claim come from? What proof does the 
Department have? How many of these ghost workers have come 
forward? By last count a mere 72 have come forward. Rather than 
acknowledge the arbitrary nature of the Department of Labor's 
accusations regarding this farmer, this rogue agency will 
instead argue that the problem is with the workers and the 
farmers and not their methodology. I think it is clear that the 
problem is with the agency. Although this case is specific to a 
certain region, the Committee is convinced that without proper 
examination of the Department of Labor's actions the pervasive 
nature of these actions will begin to affect farmers 
nationwide. In fact, in my state, in Georgia, producers have 
reported to my office that although a hot goods order has not 
been used, it has been threatened several times.
    In examining the inexcusable nature of the Department's 
actions and the arbitrary nature of its evaluation methods, I 
hope that we can gain a greater understanding of this 
escalating threat and the avenues for remedy.
    Before us today are two witnesses. Dr. David Weil is the 
Administrator of the Wage an Hour Division of the U.S. 
Department of Labor and Mr. Brad Avakian, is the Commissioner 
of the Oregon Bureau of Labor and Industries. Gentlemen, we 
look forward to both of your testimony.
    [The prepared statement of Mr. Scott follows:]

 Prepared Statement of Hon. Austin Scott, a Representative in Congress 
                              from Georgia
    Good morning.
    Thank you all for being here today to discuss an issue that has 
become an increasingly difficult challenge for farmers in their day-to-
day operations.
    The purpose of today's hearing of the Subcommittee on Horticulture, 
Research, Biotechnology, and Foreign Agriculture is to address the 
growing concern of the Department of Labor's (DOL) use of the so-called 
``Hot Goods'' Provision under the Fair Labor Standards Act of 1938 
(FLSA).
    The original purpose of this provision, which again was written in 
1938, was to protect workers from poor working conditions and 
negligible employers. Let me be clear, neither I nor anyone else on 
this Committee condones violations in regards to FLSA, in any way. We 
believe it is important to provide fair wages for agricultural workers. 
Yet, this law was not intended for use with regards to fresh fruits and 
vegetables, which perish more easily than a manufactured good. That 
said, we are aware of multiple and effective tools the Department of 
Labor can use without having to resort to their discretionary authority 
under the ``hot goods'' provision. To be clear, the Labor Department 
has authority to compel specialty crop producers and packers to 
reimburse workers when wages fall short of the minimum wage requirement 
WITHOUT using the hot goods provision. The issue we will discuss today 
is the Department of Labor's abuse of this discretion when applying the 
hot goods provision to perishable agricultural commodities. In these 
cases, producers are not only liable for civil fines and back wages to 
workers, but the fines and penalties pale in comparison to the economic 
damages brought about by the Department of Labor destroying their 
crops. The Department does not set fire to these crops. They just 
create a scenario where the crops naturally perish.
    The Department relayed to us that they used this provision 
sparingly in the past. What they have failed to acknowledge is the 
inexcusable use of a tool which Congress has never granted or 
intended--the tool of fear and intimidation. The Department has used 
this tool far too often to extort concessions from producers with 
little if any proof of wrong doing.
    This Committee recognizes the importance, ``to assure work-related 
benefits and rights'' as the Department's mission statement refers. I 
hope we all would agree that these rights are not only established in 
law but in the fabric of the rights guaranteed to us in our 
Constitution. Yet, the Department's actions are so intrusive they 
threaten the ability of employees to enjoy these rights by extorting 
employers into bankruptcy and closure. We fear that this is the 
direction the Department is pursuing regarding berry producers in the 
Pacific Northwest. In at least one of these cases, the producer 
courageously chose to fight this rogue agency and prevailed in Federal 
court against the Department, where the Department of Labor was found 
to have forced the producer to admit guilt under duress. Now we find 
ourselves in a situation where the Department is attempting to 
intimidate this producer by using what it believes to be the apparently 
inexhaustible supply of taxpayer dollars to bankrupt this producer 
through a seemingly endless appeals process.
    Yet, what has not yet been adjudicated is the original claim by the 
Department of Labor that the producer had more than 1,300 ``ghost 
workers'' who never received compensation. Thirteen hundred workers 
would be like having the entire high school where I graduated in the 
field. Where did this claim come from? What proof does the Department 
have? How many of these ``ghost workers'' have come forward? By last 
count, a mere 72 ``ghost workers'' have come forward. Rather than 
acknowledge the arbitrary nature of the Department of Labor's 
accusations regarding this farmer, this rogue agency will instead argue 
that the problem is with the workers and the farmers and not with their 
methodology. I think it is clear that the problem is with the agency.
    Although this case is specific to a certain region, the Committee 
is convinced that without proper examination of the Department of 
Labor's actions, the pervasive nature of these actions will begin to 
affect farmers nationwide. In fact, in my state of Georgia, producers 
have reported to my office that all though a ``hot goods'' order has 
not been used, it has been threatened several times.
    By examining the inexcusable nature of the Department's actions and 
the arbitrary nature of its evaluation methods, I hope we can gain a 
greater understanding of this escalating threat and the avenues for 
remedy.
    Before us today are two witnesses.
    Dr. David Weil is the Administrator of the Wage and Hour Division 
of the U.S. Department of Labor and Mr. Brad Avakian is the 
Commissioner for the Oregon Bureau of Labor and Industries. Gentlemen, 
we look forward to both your testimony. I know recognize my colleague, 
Mr. Schrader for any opening comments he may have.

    The Chairman. I now recognize my colleague, Mr. Schrader, 
for any opening statement he may have.

 STATEMENT OF HON. KURT SCHRADER, A REPRESENTATIVE IN CONGRESS 
                    FROM THE STATE OF OREGON

    Mr. Schrader. Thank you, Chairman Scott, I appreciate 
having this hearing today. I think it is extremely important.
    I want to thank Dr. Weil and Commissioner Avakian for 
coming before the Committee so we hopefully can better 
understand these enforcement actions that have occurred on our 
Oregon farms.
    The Department of Labor has, frankly, continued to use, as 
you outlined, this hot goods provision despite the fact that a 
Federal Court has determined that this action in perishable 
products on farms is coercive in nature. That conclusion is 
very troubling to me, and should be troubling to everyone here. 
It is the reason we are taking the actions today.
    I want to provide some background, and context for today's 
hearing. Originally passed as a part of the New Deal, as 
Chairman Scott alluded, the Fair Labor Standards Act was 
intended to protect American workers and to stimulate the 
economy. The FLSA established the Department of Labor's Wage 
and Hour Division to ensure that workers are fairly compensated 
for their labor and to prevent the scourge of child labor. The 
FLSA continues to play an important role in protecting American 
workers and children from unscrupulous workplace practices, as 
it should. Illegally employing children or not fully 
compensating workers for their labor, is not condoned by 
anybody.
    However, my support for the FLSA should not be construed to 
represent any support of the recent actions taken by the 
Department of Labor. In the summer of 2012, the Department of 
Labor used a provision within the FLSA, the so-called hot goods 
provision, to quarantine and confiscate Oregon farmers' 
perishable products, thereby imperiling and threatening their 
very livelihood. In taking the actions it did, DOL ignored its 
own historical precedent, violated Constitutionally protected 
due process, and subjected family farms to crushing economic 
harm in these very tough times.
    Since the summer of 2012, I have been working diligently 
with Members of the Oregon Delegation and this Committee, to 
gather data from DOL on these enforcement actions and the 
utilization of the hot goods provision as a tool against 
agricultural Wage and Hour violations. I can firmly say over 
the last 2 years, I have been severely disappointed.
    Let me give you one example: The Department of Labor has 
repeatedly told my office that comprehensive data on the 
historical use of the hot goods provisions is unavailable. Yet, 
the Congressional Research Service, found very quickly and very 
clearly that the first such application of hot goods authority 
to perishable agricultural products occurred in the last few 
years since 2008. That is 70 years, folks, 70 years. It has 
also become crystal clear to me that the Department of Labor 
has been goaded by outside special interest groups in the last 
few years to use this hot goods authority without any regard to 
the unique application in the agricultural sector.
    Furthermore, the actions taken in Oregon were done with 
complete disregard to Constitutionally protected due process 
under the 5th and 14th Amendments. Historically, Department of 
Labor investigations and its process for adjudicating 
violations of Fair Labor Standards usually followed a couple of 
key principles. First, when all of the fact finding steps were 
completed, the employer or the employer's representative will 
be told whether violations have occurred and if so, what the 
violations are, and how to correct them. If back wages are 
owed, the employer will be asked to pay the back wages. Only in 
the absence of an employer voluntarily doing so, did the Wage 
and Hour Division seek to restrain the shipment of goods.
    This Department of Labor policy clearly understands that 
employers should be given the opportunity to work with the DOL 
inspectors to correct the violations and pay back wages before 
the threat of a hot goods objection. Application of the hot 
goods provision, however, has different impacts in different 
sectors. The Chairman alluded to that. Textiles, durable goods, 
even processed or frozen foods can sit idle in the supply chain 
for weeks or months on end without having their market values 
compromised. The same simply cannot be said for blueberries or 
other perishable ag commodities, the value of which can 
seriously decline in a matter of days.
    In the case of one of my constituents, in addition to the 
almost $170,000 in fines and alleged back wages paid directly 
to the Department of Labor, he lost another $90,000 in revenue 
based on rotting berries during the imposition of the hot goods 
objection. When improperly used in the perishable ag sector, 
the threat of hot goods objection becomes coercive. As millions 
of dollars of blueberries sat idle in this supply chain, my 
constituents were forced to make a business decision: Meet the 
Department of Labor demands, sign a consent judgment, waive 
their rights to contest the allegations, pay substantial fines, 
or lose their crops and potentially their farm.
    As the Department of Labor continues to defend this 
coercive action, it is important for everyone in the room to 
understand that all of this was done before the farmers were 
even informed about the specific charges they faced. That is 
just not right. The consent judgments that my constituents 
ultimately signed to remedy the alleged violations did not 
include any administrative review process, as I outlined 
before. These farmers had never even previously been cited for 
Wage and Hour violation before the Department of Labor jumped 
to its drastic and draconian action. But, when I had talked to 
the DOL staff in Washington, D.C., I was assured that it was 
only used as a last resort, and only on repeat offenders.
    Obviously, the Department did not follow its own policies. 
Fortunately, two of these farmers decided to fight this case in 
court. I am going to read a section here, with the chair's 
permission, on what the court found:

          ``While the defendants were aware of the coercive 
        nature utilized by the DOL [Department of Labor] at the 
        time the consent judgments were entered, the nature of 
        their operations combined with DOL's [Department of 
        Labor's] departure from its previous course of conduct 
        in using the hot goods objection with respect to 
        perishable goods complicated defendants' analysis of 
        how to proceed in challenging the DOL [Department of 
        Labor] and the judgments it obtained.
          ``The DOL [Department of Labor] had previously 
        allowed an alleged violator to place the proposed back 
        wages and penalty into escrow to allow the hot goods 
        objection to be lifted while the violations were 
        litigated. However, the defendants were caught off 
        guard in these cases when the DOL [Department of Labor] 
        changed its tactics and insisted on a consent decree 
        before lifting the objections. While the proposed back 
        wages and penalty were substantial, the potential 
        losses due to a continuing hot goods objection pending 
        litigation dwarfed the proposed judgments' impact on 
        defendants. The defendants, as discussed below, were 
        left with no choice but to accept the judgments. 
        Moreover, given the DOL's [Department of Labor's] new 
        posture it is not inconceivable that mounting an attack 
        on the judgment, without further information, could 
        have had uncertain repercussions for the defendants in 
        any future interactions with the DOL [Department of 
        Labor] in view of its more aggressive tactics. . . .
          ``It could be argued, as suggested above, that 
        defendants could have sought a TRO [temporary 
        restraining order] to lift the hot goods objections and 
        permit review ofthe DOL's [Department of Labor's] 
        assessment. . . .
          ``However, the DOL's [Department of Labor's] 
        imposition of the hot goods objection to highly 
        perishable goods and requirement of immediate admission 
        of defeat without any recourse to the courts unfairly 
        stacked the deck against the Ditchens and Pan-American. 
        Given the nature of the business in which defendants 
        engaged, it is not difficult to understand why they 
        would conclude that resort to such options without 
        further information would be extremely risky given the 
        potential staggering economic losses. Moreover, this 
        court can think of no good reason in support of the 
        DOL's decision to refuse the accommodation of having 
        defendants place the penalties and wages at issue in 
        escrow as a condition of lifting the hot goods 
        objection pending administrative and court review. 
        Given the economic duress placed upon defendants in 
        order to secure the consent judgments, the judgments 
        should be vacated . . .''

    That is pretty strong condemnation language by the court. 
To me, the Department of Labor is overzealous, and its 
inappropriate use, in my opinion, of this hot goods authority 
on Oregon farmers was completely uncalled for. It has led 
Chairman Scott and I to introduce H.R. 1387 that clarifies the 
law on this issue. This simple piece of legislation states that 
the Department of Labor can continue to use hot goods objection 
on any product other than perishable agricultural commodities. 
That is very consistent, I believe, with the original law and 
its intent.
    If the Department of Labor continues it inappropriate use 
of the hot goods provision, farmers' livelihoods are going to 
be seriously jeopardized across this country. To say I remain 
troubled regarding how the Department of Labor has pursued the 
hot goods provision, and its lack of cooperation as we have 
tried to get a better understanding of the ``whys'' and 
``hows'' is an understatement.
    The Department of Labor, as I have said, did not follow any 
appropriate process as set out by its own rules. They used 
faulty methodology in coming to its findings. They coerced 
farmers into forfeiting their rights by threatening their very 
livelihoods. They have denied American farmers, my fellow 
Oregonians, the very due process our Forefathers built our 
country on, and undermined their faith in their government. 
That is a sad commentary on the agency's performance.
    I yield back, Mr. Chairman.
    The Chairman. Thank you, Mr. Schrader.
    The chair would request that Members submit any opening 
statements that they may have for the record so that the 
witnesses may begin their testimony and assure there is ample 
time for questions. I do expect us to have at least two rounds 
of questions today.
    I would like to welcome our panel of witnesses to the 
table. We have two witnesses today, the first is Dr. David 
Weil, and the second is Mr. Brad Avakian.
    Dr. Weil, please begin when you are ready.

 STATEMENT OF DAVID WEIL, Ph.D., ADMINISTRATOR, WAGE AND HOUR 
              DIVISION, U.S. DEPARTMENT OF LABOR,
                        WASHINGTON, D.C.

    Dr. Weil. Thank you, and good morning, Chairman Scott, 
Ranking Member Schrader, and Members of the Subcommittee.
    Thank you for the invitation to testify at this hearing on 
the Fair Labor Standards Act's hot goods provision, an 
important tool that we use carefully and appropriately.
    Mr. Chairman, I want to assure you that the Department of 
Labor and its Wage and Hour Division that I proudly lead 
recognize the importance of the U.S. agricultural industry and 
the critical role it plays in not only putting food on our 
tables, but also creating jobs and helping our economy to 
prosper. The Wage and Hour Division's work is critical to 
ensuring a level playing field for the vast majority of 
businesses who play by the rules and in protecting the rights 
and working conditions of agricultural workers.
    All told, between Fiscal Year 2009 and 2013, Wage and Hour 
concluded nearly 7,500 agricultural investigations, collecting 
more than $20 million in back wages for more than 46,600 
agricultural workers. The FLSA was born during a time of great 
economic suffering when the Great Depression touched every 
corner of this nation. Congress included in the Act language 
commonly referred to as the hot goods provision, the basic 
purpose of which is to exclude from interstate commerce goods 
produced in violation of the statute's minimum wage, overtime, 
and child labor provisions.
    In encouraging Congress to adopt the hot goods provision, 
President Roosevelt outlined its objectives stating, ``So to 
protect the fundamental interests of free labor and free 
people, goods produced under conditions which do not meet 
rudimentary standards of decency should be regarded as 
contraband and ought not to be allowed to pollute the channels 
of interstate trade.''
    Congress crafted the hot goods provision to apply 
expansively to all goods. Courts have upheld our use of this 
provision many times in the context of preventing the illegal 
shipment of tainted goods in agriculture, garment, and many 
other industries. We know that the majority of employers are 
doing right by their workers and the law, but we continue to 
find violations impacting the wages and working conditions of 
some of our country's most vulnerable workers. In a majority of 
cases, Wage and Hour is able to reach a resolution with 
employers by working together. Occasionally, we do uncover 
labor violations that necessitate the use of the hot goods 
provision in order to obtain remedies for the affected workers, 
and protect the stream of commerce and responsible producers.
    The hot goods provision is only one of several tools 
available to Wage and Hour and while not a tool we use 
frequently, it has been an important part of our enforcement 
program since the Fair Labor Standards Act was enacted. We also 
know that the provision is a strong tool and accordingly, we 
have created careful procedures regarding when and how to use 
it. But it is also important to understand that we use our 
enforcement tools in conjunction with other methods of 
increasing compliance. Wage and Hour continues to recognize 
that enforcement alone will never be sufficient to achieve the 
agency's mission.
    Education and outreach to the employer community to provide 
and promote voluntary compliance has been and will continue to 
be one of our key strategies for promoting sustained and 
industry-wide compliance. This has been particularly important 
in the agricultural context where since Fiscal Year 2009 Wage 
and Hour has conducted nearly 600 outreach events and 
presentations that were specifically geared to providing 
valuable information and compliance assistance to the 
agricultural industry.
    I want to briefly share a success story that illustrates 
this integrated approach. Wage and Hour began investigations in 
New Jersey, North Carolina, and Michigan during the 2009 
harvest season and uncovered systemic labor violations among 
blueberries growers and farm labor contractors, including the 
illegal employment of children. In addition to recovering 
several thousand dollars in back wages and assessing penalties, 
Wage and Hour undertook a comprehensive approach to ending 
these practices.
    Before the 2010 harvest was to begin, our offices in these 
three states took proactive steps to ensure compliance with 
agricultural standards by conducting outreach to employers. We 
met with farmers, farm labor contractors, and industry 
associations to provide them with meaningful compliance 
assistance. The following year employers took important steps 
to ensure that children were not working in the fields. No 
child labor violations were found in the subsequent year in 
North Carolina, and New Jersey, and only one farm in Michigan 
had those violations.
    This is truly a win/win for everybody, and a great example 
of how our efforts are aimed at helping farms and farm workers 
prosper together. In enacting the Fair Labor Standards Act, 
Congress acknowledged the inherent competitive nature of the 
market, and recognized that without strong enforcement 
mechanisms, workers and employers would fall victims to ills of 
unfair competition and exploitive labor practices.
    When deployed carefully and in concert with other tools of 
outreach and enforcement, I strongly believe we can achieve the 
statutory objectives entrusted to me of providing a fair day's 
pay, for a fair day's work.
    Thank you again for the opportunity to testify today, and I 
am happy to answer your questions.
    [The prepared statement of Dr. Weil follows:]

 Prepared Statement of David Weil, Ph.D., Administrator, Wage and Hour 
          Division, U.S. Department of Labor, Washington, D.C.
    Good morning, Chairman Scott, Ranking Member Schrader, and Members 
of the Subcommittee. Thank you for the invitation to testify at this 
hearing on the Fair Labor Standards Act's (FLSA) ``hot goods'' 
provision, a statutory enforcement tool and safeguard of critical 
importance to our nation's workers, businesses and economy. It is an 
important tool that we use carefully and appropriately. Courts have 
upheld our use of this provision many times in the context of 
preventing the illegal shipment of tainted goods in many industries 
including agriculture, garment, and other manufacturing, among others.
    Mr. Chairman, the Department of Labor recognizes the importance of 
the U.S. agricultural industry and the critical role it plays in not 
only putting food on our tables but also creating jobs and helping our 
nation's economy prosper.
    I am pleased to be here today to talk with you about the Wage and 
Hour Division's work in protecting the rights of agricultural workers 
and ensuring a level playing field for the vast majority of this 
industry's businesses who play by the rules.
Background
    The Fair Labor Standards Act of 1938 was born during a time of 
great economic suffering, when the Great Depression touched every 
corner of this nation. In response to those circumstances, Congress 
recognized the critical need to establish a floor of basic labor 
protections, including setting minimum wage, overtime compensation, and 
child labor protections for America's workers, and also the need to 
level the competitive playing field for employers.
    The passage of this law was an unprecedented development--one that 
recognized that the establishment and enforcement of basic labor 
standards are necessary for promoting the economic security of workers 
and their families and for ensuring the integrity of our economy.
    To advance the critical mission of the FLSA, Congress included in 
the Act an explicit prohibition against the shipment and distribution 
in commerce of goods that were produced in violation of the FLSA's 
minimum wage, overtime or child labor requirements.
    Commonly referred to as the ``hot goods'' provision of the FLSA,  
15(a)(1), the basic purpose of the  15(a)(1) prohibition, as the 
Supreme Court has pointed out, is to exclude from interstate commerce 
goods produced under substandard labor conditions, which would compete 
unfairly with goods produced by complying employers, and which in their 
total effect might force complying employers out of business.
    In his 1937 message to Congress, President Roosevelt urged Congress 
to enact the FLSA and include in the bill the rules and legal 
prohibitions necessary to accomplish the objectives of the Act. More 
specifically, President Roosevelt's message identified the needs and 
objectives of the hot goods prohibition: ``And so to protect the 
fundamental interests of free labor and a free people we propose that 
only goods which have been produced under conditions which meet the 
minimum standards of free labor shall be admitted to interstate 
commerce. Goods produced under conditions which do not meet rudimentary 
standards of decency should be regarded as contraband and ought not to 
be allowed to pollute the channels of interstate trade.''
    President Roosevelt's message is cited approvingly throughout the 
legislative history of the FLSA and served as strong inspiration for 
passage of the Act.
    Prohibiting the shipment of goods produced in violation of the FLSA 
serves several fundamental statutory purposes. In addition to ensuring 
that employers who violate the FLSA do not enjoy an unfair competitive 
advantage over their law-abiding peers, the hot goods provision serves 
to incentivize employers to adhere to the FLSA's requirements. The hot 
goods provision also serves to protect the interests of those workers 
who have suffered substandard working conditions during the production 
of such goods.
    It is also important to point out that Congress crafted the hot 
goods provision to apply expansively to all goods for the purpose of 
removing those tainted goods from the stream of interstate commerce. 
There is no statutory exception for agricultural or perishable goods to 
the hot goods provision. In fact, in today's economy, most goods can be 
considered perishable if you consider the tremendous pressure upper-
tier businesses place on lower-tier suppliers to deliver goods on a 
precise schedule. Be they blueberries, automobile parts, high fashion 
clothing items, or consumer digital products, delay in delivery date 
can be extremely costly to all parties in the supply chain.
Wage and Hour Efforts
    The FLSA's passage in 1938 marked the creation of the agency I am 
honored to lead, the Wage and Hour Division (WHD), whose mission is to 
promote and achieve compliance with labor standards to protect and 
enhance the welfare of the nation's workforce. That is, we are charged 
with ensuring that working people receive a fair day's pay for a fair 
day's work.
    This is a critical directive in the agricultural industry where, 
for more than 76 years WHD has been working hard to strengthen 
compliance with Federal labor laws. We know that the majority of 
employers in this industry are doing right by their workers and the 
law, but we continue to find labor violations impacting the wages and 
working conditions of some of our country's lowest-paid workers who, 
due to a lack of knowledge of the law or a fear of exercising their 
rights, are vulnerable to disparate treatment and labor violations.
    The agricultural industry is the backbone of our economy, which is 
supported by growers, farm labor contractors and other businesses. The 
value of our nation's farms cannot be overstated, and it is in all of 
our interests to ensure that farmers and workers prosper together. 
That's where we come in--our job at the Wage and Hour Division is to 
ensure that agricultural employers keep their workers safe on the job, 
house them in safe and sanitary residential facilities, and pay them 
their legally required wages. We are also committed to protecting the 
interests of law-abiding employers and ensuring that they are not 
placed at a competitive disadvantage by businesses that break the law.
    As a law enforcement agency, we take seriously our responsibilities 
to ensure compliance with the law. WHD conducts thorough inspections of 
migrant housing units, transportation vehicles, employment practices 
and pay records to ensure compliance with all applicable agricultural 
labor standards. These enforcement efforts also include timely 
compliance assistance where, for example, our investigators reach out 
to agricultural employers in advance of their growing or harvest season 
to remind them of their legal responsibilities and help them ensure 
compliance throughout the season.
    During investigations, our investigators go to great lengths to 
gather accurate and sufficient evidence of an employer's level of 
compliance with all applicable laws. And when violations are found, WHD 
investigators work expeditiously with the employers to identify 
solutions and methods for coming into compliance. We also devote time 
and resources to educating employers about their responsibilities to 
help them prevent future labor violations from occurring.
    However, employers who refuse to comply with the law may face 
appropriate action based on what we find. By conducting effective 
investigations and using a variety of enforcement tools--including 
civil money penalties, liquidated damages, injunctions, and other 
appropriate remedies--WHD is able to bring employers into compliance 
and deter future labor violations, thereby safeguarding the rights and 
welfare of agricultural workers.
    In a majority of agricultural cases, WHD is able to reach a 
resolution with employers and we often work together to remedy the 
problems. Occasionally, however, we uncover labor violations that 
necessitate the use of enforcement tools like the hot goods provision 
of the FLSA, in order to obtain remedies for the affected workers and 
protect the stream of commerce from being adversely affected by 
illegally produced goods and to make sure that responsible producers in 
the agriculture supply chain are not put at a competitive disadvantage 
by producers who flout the law.
    The hot goods provision is one of several tools in WHD's 
enforcement toolbox. And, while not a tool we use frequently, the hot 
goods provision has been an important part of our enforcement program 
since the FLSA was enacted.
    In fact, one of our earliest hot goods enforcement actions occurred 
in 1946 when the Department obtained injunctions from Federal court to 
restrain vegetable packers in Mississippi from shipping their goods in 
interstate commerce because the vegetable products were processed and 
packed by minors, many under 14 years of age, in violation of the 
FLSA's child labor provisions.
    In more recent years, WHD has utilized hot goods actions in 
numerous agricultural sectors all across this country:

   In the 1980's for example, WHD brought hot goods actions 
        against sweet potato growers in North Carolina to obtain back 
        wages and compliance agreements from the employers.

   In 1990's, WHD utilized the hot goods provision to obtain 
        compliance in several cases involving child labor violations. 
        For example, WHD sought court action against onion growers in 
        Texas and strawberry growers in Louisiana, who employed 
        children, ages 6 to 11, to pick crops, in violation of the 
        FLSA. The employers were prevented from shipping the ``hot'' 
        goods until our enforcement matters were resolved. As a result, 
        they agreed to comply in the future, paid civil money penalties 
        and also signed compliance monitoring agreements with WHD.

   To give a more recent example, earlier this year WHD 
        recovered $428,000 in back wages and damages for low-wage 
        workers on a Hawaiian basil farm. After uncovering egregious 
        minimum wage and overtime violations, the agency requested the 
        employer to voluntarily refrain from shipping the basil 
        harvested in substandard conditions to off-island customers. 
        The agency agreed to shipment and released its objection once 
        the employer agreed to come into immediate compliance and 
        started paying the back wages due on behalf of the affected 
        workers.

    These are just a few examples of our decades-long commitment to 
strengthening compliance in the agricultural industry through the use 
of the hot goods provision of the FLSA.
    Beyond the use of a particular statutory tool, WHD has become more 
strategic in its efforts to strengthen labor law compliance in the 
agricultural industry and keep workers safe while on the job.
    WHD offices conduct strategic initiatives in industries across the 
country. These initiatives include directed investigations of employers 
throughout the supply chain, as well as compliance evaluations that 
inform the agency of the severity and likely causes of violations. Our 
initiatives also heavily focus on reaching out to employers, industry 
associations, and worker advocates to engage them in dialogue and 
identify strategies for addressing industry-specific problems.
    This multi-pronged approach to ensuring compliance is working--our 
strategic efforts are helping maximize WHD' impact and the results of 
all these efforts speak volumes in the agricultural industry.

    Between FY 2009 and FY2013, WHD concluded nearly 7,500 agricultural 
investigations, collecting more than $20 million in back wages for more 
than 40,000 workers nationwide.

    These are big numbers but please allow me to underscore the gravity 
of what they represent. These are real dollars and cents that were 
earned through the labor of real people--many of whom are your 
constituents and are also vulnerable low-wage workers. It is real money 
that has enabled them to put food on the table, pay the rent, care for 
their children, keep the lights on, and pay for other expenses.
    Furthermore, putting rightfully earned wages back into the pockets 
of working people means that they will turn around and spend it on 
goods and services, stimulating our economy and helping to create new 
jobs.
    These numbers also represent our success in making sure that law-
abiding employers are not placed at a competitive disadvantage against 
businesses that break the law. Robust and consistent enforcement of the 
law is critical to leveling the playing field, creating the right 
incentives and making those who comply with workplace laws stronger, 
not weaker, in the marketplace.
    I would like to share with you a real success story that has made a 
difference in the lives of hardworking people and serves as a great 
example of our strategic enforcement efforts in action.

   A few years ago, WHD implemented one of the most effective, 
        creative, and visible farm labor enforcement programs in the 
        history of the agency, focusing on agricultural industries in 
        NJ, NC and MI during their blueberry harvest seasons.

   Investigations conducted during the 2009 harvest season 
        uncovered egregious labor violations among blueberry growers 
        and farm labor contractors (FLCs) in the three states--
        including the illegal employment of children in several fields. 
        Other violations included unsafe housing conditions, 
        transporting workers in uninsured vehicles, failing to pay the 
        minimum wage, failing to properly disclose terms and conditions 
        of employment, failing to comply with farm labor contractor 
        registration requirements, and failing to keep all required 
        records. In addition to recovering several thousand dollars in 
        back wages and assessing penalties, WHD took a comprehensive 
        approach to ending the dangerous practices it had uncovered.

   In early 2010, before the blueberry harvest was to begin, 
        WHD offices in the three states took proactive steps to ensure 
        compliance with agricultural labor standards, particularly in 
        regard to child labor. WHD offices conducted outreach and 
        education (in English, Spanish and Haitian-Creole) to inform 
        employers of their legal responsibilities and ensure workers 
        understood their rights. WHD also met with farmers, FLCs, 
        community organizations, state and local agencies, and industry 
        associations--including the NJ Farm Bureau and the NC Blueberry 
        Council--to speak with them about our enforcement efforts and 
        to provide them with meaningful compliance assistance.

   As a result of WHD's enforcement and compliance assistance 
        efforts, employers took observable and important steps to 
        ensure that children were not working in the fields. No child 
        labor violations were found at the farms investigated in NC and 
        NJ, and only one farm in MI was found in violation of Federal 
        child labor requirements. This is truly a win-win for everybody 
        and a great example of how WHD's efforts are aimed at helping 
        farms and farm workers prosper together. This story also 
        reflects the commitment my staff has to providing employers 
        with the tools they needed to ensure their business practices 
        are in compliance with the law.
Compliance Assistance
    WHD has long maintained that enforcement alone will never be 
sufficient to achieve the agency's mission of protecting our nation's 
workers. Education and outreach to the employer community to promote 
voluntary compliance has been and will continue to be one of our key 
strategies for promoting sustained and industry-wide compliance with 
Federal wage and hour laws.
    We are equally committed to reaching out to agricultural workers 
and their representatives to inform them of their rights and to 
encourage them to contact us if they believe their rights have been 
violated.
    The common theme here is awareness. We believe that workers who are 
aware of their rights and employers who are aware of their legal 
responsibilities (and the consequences of breaking the law) are better 
positioned than we are, in many instances, to identify and remedy labor 
violations, or to prevent them from occurring in the first place.
    In furtherance of our goal to increase awareness, the agency has 
hired Community Outreach and Resource Planning Specialists (CORPS) to 
work in WHD District Offices across the country. These officers 
establish and maintain lines of communication at the local level; 
engage partners in dialogue about local industry practices and labor 
concerns; provide training and resources to stakeholders on wage and 
hour laws; and provide WHD with recommendations on how to better serve 
the needs of workers and regulated communities.
    With the addition of these dedicated CORPS, WHD has increased its 
outreach and education efforts to inform employers, employees and other 
stakeholders about Federal wage and hour laws and to engage their 
participation in promoting industry-wide compliance.
    This has been particularly important in the agricultural context 
where, since FY 2009, WHD has conducted nearly 600 outreach events and 
presentations nationwide that were specifically geared to providing 
valuable information and compliance assistance to the agricultural 
industry.
    WHD also regularly engages community organizations, industry 
associations, employer representatives and other stakeholders in 
dialogue about compliance-related matters. These stakeholder 
relationships are multidimensional--it is not just us talking to them 
about the importance of compliance or asking for their participation in 
outreach activities, we are also asking our partners about how we can 
improve our services and better serve workers and the regulated 
community.
    For example, WHD collaborates with Farm Bureaus, Growers' 
Associations, and other industry representatives to solicit feedback 
and input when developing educational and outreach materials. These 
stakeholders' opinions help to inform the content of the final products 
and help WHD remain focused on the topics most relevant to the intended 
audiences.
    This is the case with our newly developed compliance assistance 
materials, which we created in direct response to feedback received 
from agricultural employer groups and other industry stakeholders.

   We just released a new booklet that provides employers with 
        simplified and consolidated information on the applicable 
        statues and requirements governing agricultural employment. The 
        information is presented in easy-to-understand language and is 
        broken down into components that employers may quickly 
        reference as needed. Separate segments cover topics including 
        wages, housing, transportation, and field sanitation.

   This booklet is accompanied by a 10 minute video tutorial 
        that walks agricultural employers through compliance 
        requirements under the applicable laws, and provides real world 
        examples of compliant and non-compliant employment conditions 
        and practices.

   We have also released a revised informational pocket card 
        for agricultural workers. The card will more clearly inform 
        workers of their rights and provide them information on how to 
        file a complaint with WHD if they believe their rights have 
        been violated.

    We are very proud of these new compliance assistance materials 
because they represent the benefits and success of stakeholder 
cooperation and dialogue. These new resources will be valuable 
additions to WHD's robust library of compliance assistance materials, 
and will be distributed widely through our ongoing outreach efforts and 
events.
Conclusion
    Congress enacted the Fair Labor Standards Act of 1938 at a very 
dark time in our nation's history--a time where those fortunate enough 
to find employment were often exploited and had little available 
recourse for their grievances. And Congress, in its wisdom and 
knowledge of the inherent competitive nature of the market, recognized 
that without strong enforcement mechanisms--such as the hot goods 
provision--workers as well as responsible employers would fall victim 
to the ills of unfair competition and exploitive labor practices.
    I am proud to be leading an agency with such a critical mission in 
the 21st century economy. We will continue our focus on data-driven, 
evidence-based strategic enforcement efforts and will be engaging in 
even more education and outreach. The ultimate goal of all our 
strategic enforcement and compliance assistance efforts is to change 
employer behavior for the better--to discourage employers from cutting 
labor costs at the expense of workers' wages and working conditions, 
and to help move them towards positive, compliant business practices so 
that workers and employers can prosper together. Our hot goods 
enforcement actions are a small but important part of this overall 
mission. Our measure of success will be improving compliance levels in 
the agricultural industry, so that when we enter workplaces in the 
days, weeks, months and years ahead, we find fewer and fewer 
violations.
    Thank you again for the opportunity to testify today. I am happy to 
answer your questions.

    The Chairman. Thank you, Dr. Weil.
    Mr. Avakian.

         STATEMENT OF HON. BRAD AVAKIAN, COMMISSIONER,
      OREGON BUREAU OF LABOR AND INDUSTRIES, PORTLAND, OR

    Mr. Avakian. Mr. Chairman, Committee Members, thank you for 
inviting me today to discuss Oregon's perspective on the use of 
the hot goods provision in the investigations of perishable 
agricultural products.
    My name is Brad Avakian and I serve as Oregon's 
Commissioner of Labor and Industries, which in our state is a 
state-wide, nonpartisan, elected position. Our agency supports 
our local industries with technical assistance. We train much 
of Oregon's workforce, and we enforce the state's civil rights 
laws in housing, public accommodations, and employment. We also 
enforce the state's Wage and Hour laws making sure that workers 
get paid the wages that they have rightfully earned. As a part 
of that, we license all of the state's farm labor contractors, 
and we manage the state's farm labor unit.
    We have used strong wage enforcement, as a matter of basic 
fairness, not only for the workers, but also to make sure that 
the vast majority of the employers that do play by the rules 
enjoy a level playing field on which to compete. We conduct 
about 2,000 wage investigations a year, and in addition to 
that, we field about 20,000 calls a year from Oregon businesses 
seeking help navigating their way through complicated state and 
Federal laws.
    Our timber, agricultural, and nursery industries play a 
critical economic role in our communities. They employ over 
54,000 workers. We need strong wage enforcement, but we also 
must ensure due process for Oregon growers and it is for this 
reason, we have deep concerns about the use of the hot goods 
provision with perishable agricultural goods on our farms.
    The imminent perishable nature of produce often renders 
contesting a hot goods motion moot. Because if the produce 
spoils, its value is converted to nothing. The farmer then has 
diminished or no ability at all to pay the employees' wages if 
wages are truly due. In fact, the actions of a farmer facing 
the choice of having their blueberries spoil in some warehouse 
during a protracted legal process on a hot goods motion, is far 
from voluntary when he or she is faced with signing a hot goods 
consent judgment.
    This imbalance of power between the government and the 
accused in this kind of a hot goods action, we think obscures 
any meaningful due process, and in addition, risks violating 
Constitutional search and seizure, and commerce clause 
protections. In addition, requiring farmers to waive their 
rights of appeal, just runs contrary to basic rules of 
fairness.
    Now, when applied appropriately, we do think that the hot 
goods provision is an effective tool in wage enforcement, but 
it should be limited to the enforcement of non-perishable items 
as originally intended and as those traditionally associated 
with industries like the garment industry.
    The United States Department of Labor is our sister 
organization and I must say that we value our partnership with 
them very much. We work to stay in close communication so that 
we can both effectively coordinate our investigative resources. 
We believe in strong wage enforcement. We also believe that 
meaningful action against employers that fail to pay their 
wages can be taken without violating the fundamental principles 
of due process.
    Mr. Chairman, I want to thank you again for your 
consideration of the issue, and for the Committee's interest in 
Oregon's perspective.
    [The prepared statement of Mr. Avakian follows:]

Prepared Statement of Hon. Brad Avakian, Commissioner, Oregon Bureau of 
                   Labor and Industries, Portland, OR
    Mr. Chairman, Representatives:

    Thank you for inviting me to discuss Oregon's perspective on the 
use of the ``hot goods'' provision of the Fair Labor Standards Act 
during the investigation of perishable agricultural products.
    My name is Brad Avakian and I serve as Oregon's Commissioner of 
Labor and Industries, a non-partisan statewide elected position. Our 
agency supports local businesses with technical assistance, helps train 
much of Oregon's workforce, and enforces our state's civil rights laws 
so that people are treated fairly on the job, in housing and in public 
accommodations.
    We also enforce the state's Wage and Hour laws, ensuring that 
workers receive the wages to which they're entitled. We license all the 
state's farm labor contractors and manage the state's farm labor unit. 
Last year, our enforcement efforts returned more than $2 million to 
Oregon workers who had not received the wages they had earned.
    We view strong wage enforcement as a matter of basic fairness not 
only to the individual employees, but also the vast majority of 
employers who deserve a level playing field on which to compete. Our 
agency conducts more than 2,000 Wage and Hour investigations each year. 
In addition, we responded to about 20,000 calls last year from 
employers helping them to avoid potential wage violations in the first 
place.
    In Oregon, our timber, agricultural and nursery industries play an 
important economic role in communities around the state. In fact, 
together, these sectors employ over 54,000 workers--which is one of the 
reasons for our interest in enforcement that's both strong and fair.
    Our agency is committed to having strong wage enforcement while 
still ensuring due process for Oregon growers. For this reason, we 
continue to have deep concerns about using the ``hot goods'' provision 
of the Fair Labor Standards Act with perishable agricultural goods on 
Oregon farms.
    The imminent perishable nature of the produce often renders 
contesting a ``hot goods'' motion moot, for when the produce spoils, it 
has no value. With the loss of the goods, the farmer has diminished or 
no ability to pay employees if wages are truly due. In short, the 
actions of a farmer facing the choice of having blueberries spoil in a 
warehouse during a protracted legal process are far from voluntary when 
he or she signs a hot goods consent judgment.
    The imbalance of power in this type of hot goods action obscures 
any meaningful due process during the enforcement action and risks 
violating Constitutional search and seizure and commerce clause 
protections. Requiring farmers to waive their rights of appeal--even if 
future findings of fact or law would exonerate the farmers--runs 
contrary to basic rules of fairness.
    When applied appropriately, use of the ``hot goods'' provision can 
be a powerful and effective tool in wage enforcement. But ``hot goods'' 
should be limited to the enforcement of non-perishable items such as 
those traditionally associated with the garment industry.
    We value our partnership with the U.S. Department of Labor and work 
to stay in close communication with them so that we can most 
effectively coordinate investigative resources. The Oregon Bureau of 
Labor and Industries believes in strong wage enforcement for our 
state's most vulnerable workers. We work to strengthen our workforce 
and believe that we can take meaningful action against employers 
failing to pay wages without violating fundamental principles of due 
process.
    Thank you again for your consideration of this issue and the 
critical work of ensuring fair enforcement of important wage and hour 
protections.

    The Chairman. Thank you, Mr. Avakian.
    I have a couple of questions and I would like to remind 
Members that they will be recognized for questions in order of 
seniority for Members who were here at the start of the 
hearing. After that, Members will be recognized in order of 
arrival. I certainly appreciate Members' understanding of that. 
I now recognize myself for 5 minutes.
    Dr. Weil, what is the budget for the Wage and Hour 
Division, the budget request for 2014?
    Dr. Weil. Thank you. I want to give you the precise number, 
$220 million, Mr. Chairman.
    The Chairman. Okay, I show your request as $243 million, 
but that is fair enough. So you said that you have a $240 
million budget. Do you pay your legal fees out of that budget, 
or are they paid out of the Department of Justice?
    Dr. Weil. I am pausing only because we have a solicitor's 
office that undertakes legal actions for the Wage and Hour 
Division as it does for other agencies which has its own 
budget, and they provide us legal assistance in all matters as 
they do for other agencies of the Department of Labor.
    The Chairman. In other words, you have $\1/4\ billion and 
there is another agency's pot that could also be dipped into 
when bringing these charges against a U.S. farmer?
    Dr. Weil. Well, we have resources to undertake our mission 
and our statutory obligations in regards to enforcement, 
voluntary compliance, and our other activities.
    The Chairman. Where the farmer has to use their private 
money and their private assets to defend themselves. Let me 
read you a definition, if I could. ``Extortion is the criminal 
offense of obtaining money, property, or services from a 
person, entity, or institution through coercion. Coercion is 
the practice of compelling a person or manipulating them to 
behave in an involuntary way whether through action or inaction 
by use of threats, intimidation, trickery, or some other form 
of pressure, force, or duress.''
    Dr. Weil, we have acknowledged that you have $\1/4\ billion 
budget that is government funds. Certainly, the farmer has to 
pay for it out of their private funds. The U.S. District Court 
specifically said that your Department forced a farmer to sign, 
under duress, that they would not seek legal remedy in the 
court that is guaranteed by the United States Constitution.
    Do you believe that when the farmer uses their private 
funds, their personal dollars, their family dollars that they 
have worked for generations to build and to grow that farm 
with, do you believe that when you have in excess of $\1/4\ 
billion to use against them that when that farmer defends 
themselves and the court rules in favor of the farmer, do you 
believe that the agency should return the farmer's legal fees 
to them?
    Dr. Weil. Thank you for your question, Congressman.
    I would begin by saying the budget that you referenced is 
to allow us to enforce a set of statutes that cover 135 million 
American workers in 7.3 million workplaces, directed towards 
every sector of the economy and it is in that context we deploy 
those resources very carefully through the range of enforcement 
and outreach tools that we have available to us.
    The Chairman. Sir, let me rephrase the question then. When 
you, when your agency, when the people in your agency who I 
would respectfully submit that if they did not work for the 
Federal Government, they would be held in criminal court, for 
engaging in the coercion and the duress that the United States 
District Court said was used against this farmer. What recourse 
should the farmer have against your agency when the court rules 
in favor of the farmer?
    Dr. Weil. Well, I would begin--first of all, I can't 
directly comment on the particular case because, as you know, 
it is being litigated. I will say we undertake all of our 
enforcement activity, including in agriculture, and with 
respect to the hot goods as well as any enforcement activity, 
with very carefully crafted procedures and with a very well-
trained investigative workforce.
    The Chairman. Dr. Weil, with due respect, if you were 
operating in a fair and equitable manner we would not be here 
today. And this, when the government, when people in charge of 
agencies use the laws in a manner that the United States Courts 
say have infringed upon the American citizen's Constitutional 
rights, then with due respect, there should be consequences for 
the people that lead that agency, and for the people who 
engaged in that duress against the American citizen.
    And I would respectfully submit that if there were we would 
not be here today and the conduct of your agency would be much 
better.
    With that I yield to my colleague, Mr. Schrader.
    Mr. Schrader. Thank you, Mr. Chairman. Dr. Weil, Dr. Wile 
or Wheel?
    Dr. Weil. Weil.
    Mr. Schrader. Excuse me, sir. Dr. Weil.
    Dr. Weil. Thank you, Congressman.
    Mr. Schrader. How often has the hot goods provision been 
used prior to this last decade on perishable agricultural 
products?
    Dr. Weil. In the period 2001 to 2013 we have used it 28 
times.
    Mr. Schrader. How about prior to that? I was asking prior 
to the last decade.
    Dr. Weil. I don't have in front of me figures regarding 
prior use of that. I know the first time hot goods was invoked 
in the agricultural industry, and this was towards a processor, 
was in 1946.
    Mr. Schrader. Was it a processor, that is obviously a 
perishable situation? We are talking about either frozen, or 
packed, or canned type of products?
    We are concerned at this hearing about the use of hot goods 
with regard to perishable products. I think we would all agree 
that as Commissioner Avakian indicated, it is a fine tool to 
use on non-perishable products because the value of the product 
doesn't deteriorate. But we are talking perishable. So the 
answer to your question is zero prior to your use in this last 
decade.
    Why were these three growers targeted in Oregon in 2012? 
Why were they picked on? Why did you pick out these three?
    Dr. Weil. Sure, and again, I can't speak to the particulars 
of this case in litigation, but I would be pleased to speak 
about how we target our investigation resources generally.
    We undertake what are called directed investigations 
throughout the country based on a very careful assessment of 
facts about the prevalence of violations of the Fair Labor 
Standards Act, across different industries in different parts 
of the country. All of our regions in our district offices 
engage in a review of industries in their area in terms of 
respective violations.
    Mr. Schrader. Why then, all of a sudden, this new-found 
interest in using hot goods in perishable products? Why was 
that determined to be something that hadn't been done before, 
and the last few years seems to have been popular with the 
Department?
    Dr. Weil. Well, I would first point out and I would be 
happy to look back prior to the period where you ask your 
question, but from 2001 to 2008 during President Bush's 
Administration, we used the authority 17 times. And then we 
used it 11 again up until--in terms of closed cases since 2009.
    Mr. Schrader. These were all perishable products?
    Dr. Weil. These are in agriculture.
    Mr. Schrader. In perishable products?
    Dr. Weil. Well, yes, I mean, I would certainly acknowledge 
agriculture as perishable products.
    Mr. Schrader. Well, I guess I would like after the hearing 
for you to get me that information. There is a big difference--
--
    Dr. Weil. I would be happy to.
    [The information referred to is located on p. 43.]
    Mr. Schrader. As I have tried to make crystal clear my 
question relates not to processed products but to fresh 
products. Have either of these farmers, any of these farmers in 
Oregon, have a past history of violation of Labor laws?
    Dr. Weil. While we used, as I said in terms of setting up 
our directed investigation protocols, part of what we look at 
is past behavior of individual employers. Our overall concern 
is driven by the prevalence of violations in a sector.
    Mr. Schrader. Did these farmers have past violations, on 
child labor laws?
    Dr. Weil. Again, I don't want to talk about the particular 
ones in litigation. In general, in agriculture----
    Mr. Schrader. The answer, I can give you the answer, 
actually. The answer is no. And it was clear to the Department 
when they came on the farm that these were good actors with no 
previous violations. Is it standard practice now for the 
Department of Labor to quarantine perishable products when you 
are doing an investigation without due process for these guys?
    Dr. Weil. So our procedure is to assure compliance with the 
law. We have used it in closed cases 11 times over a period of 
time, or 28 times over a period of time. We have done 7,500 
agriculture investigations.
    Mr. Schrader. So is this your first choice then? This is 
something you go to right away?
    Dr. Weil. Absolutely not, Congressman, and let me clarify 
that.
    Mr. Schrader. Well, then why did you use it right away on 
these farmers that had no prior history of any violation? I am 
confused.
    Dr. Weil. Congressman, we use a procedure where when we 
find violations we undertake discussions with the grower or 
farm labor contractor involved.
    Mr. Schrader. So you concluded these people were guilty 
because of the investigation? It is my understanding in the 
American judicial system, in the administrative system, people 
are not judged guilty through an alleged violation. 
Investigations take time. Yet, you imposed the hot goods order 
against Oregon farmers prior to even concluding your 
investigation. Do you think that is fair?
    Dr. Weil. Congressman, I would characterize our 
investigations procedure different than you did. In any 
investigation----
    Mr. Schrader. I am just describing what actually happened. 
I know what you would like to do, but I am describing what 
actually happened. It is incontrovertible. A United States 
District Court said so.
    Dr. Weil. Sure. No, and Congressman, I am very proud of the 
investigators, the 1,100 people who work for my agency because 
they are trained in any investigation to undertake their 
evaluations of violations prior to meeting with the employer.
    And then when they meet with the employer they have a 
systematic discussion of what they found in the course of their 
investigations that are based on discussions with workers, the 
employer----
    Mr. Schrader. I am sorry to interrupt you again, but that 
is not what happened in Oregon. You know, this hot goods threat 
was levied as the court described very clearly, without the 
opportunity for the farmer to protect his livelihood, his 
investment, his crop. It was coercive, completely coercive. I 
would use the word extortion.
    The Department of Labor, in my opinion, extorted money from 
these Oregon farmers. Completely inappropriate. I don't see how 
you can stand and defend that. I think the men and women that 
work in the Department of Labor are great folks, trying to do 
the right thing, but were obviously told, given a directive, to 
impose this arcane and inappropriate use of hot goods in 
perishable commodities. You are violating people's due rights. 
That is not good advertisement for what the United States 
Government is all about. We the People are being attacked by 
our own government without due process.
    Does it bother you that a Federal judge has clearly 
indicated this is a coercive tactic used on perishable 
agriculture products? Does that bother you, Doctor?
    Dr. Weil. Congressman, courts have upheld the use of the 
hot goods provision since the passage of the Fair Labor 
Standards Act beginning with the Supreme Court in 1941.
    Mr. Schrader. We are talking about perishable products 
again. You keep diverting over to other goods. We will all 
acknowledge, there are other goods, that is fine. But we are 
talking about perishable products.
    What courts have upheld the use of hot goods in non-
perishable products? We have this recent decision that clearly 
states it has not been used before, and this is the first case 
that unfortunately has to come before the court of the United 
States, again, using taxpayer dollars, trying to defend the 
basic rights of people when it should be crystal clear to the 
Department that this is an inappropriate use.
    Dr. Weil. Congressman, the statute does not exclude any 
sector based on perishability. As you know, the statute has 
only two very specific exclusions in terms of common carriers, 
and those who receive goods who are not knowledgeable about the 
good faith----
    Mr. Schrader. So what about the courts? This is a United 
States District Court. It said that the usual practice had been 
to lift the hot goods provision, the quarantine, if you will, 
once the back fines and alleged wages were paid into escrow. 
Why was that not acceptable to the Department of Labor in this 
case?
    Dr. Weil. And again, as you know, I can't comment directly 
on the case because it is in litigation. We have very clear 
procedures. I want to go back to the fact that----
    Mr. Schrader. Well, this was your policy.
    Dr. Weil. Yes, sir.
    Mr. Schrader. The court did its research, too, not just 
myself, and the Committee. They did their research. They said 
the historical precedent had been once those fines and the 
alleged wages were held in escrow, while an investigation could 
continue, while the farmer could contest that, get the facts to 
be able to understand what was going on, the hot goods 
objection was lifted.
    Why did that not occur in the Oregon case?
    Dr. Weil. We have a practice. We do use escrow in certain 
cases. It is judged on a case-by-case basis by the 
investigator, in consultation with the district office and the 
regional office of our agency.
    Mr. Schrader. So why did you persecute these particular 
farmers then? I guess I am curious. Why not do the escrow? That 
seems very fair, respects due process, and still gets you the 
money and potentially these ghost workers the money they are 
due.
    Dr. Weil. The use of escrow is undertaken in cases where it 
is the judgment of the investigator, again, in consultation 
with other offices, our regional offices, as well as our 
solicitor's office, that there is progress in negotiations in 
good faith on the part of the employer where back wages can be 
put in escrow and goods can be allowed----
    Mr. Schrader. Well, they did that. They did that. So why 
wasn't the quarantine that was imposed not lifted?
    Dr. Weil. Well, in the--I can't comment on the particulars 
of this case. I can comment that our procedures are very clear 
in what instances we uses escrow, and it is where we are having 
progress towards resolution which we fully acknowledge.
    Mr. Schrader. You had policies here. I mean, you are 
violating your own policies. You are violating your own 
policies--your Department violated what you just said. It is 
sad. This is indefensible. You keep digging a bigger hole for 
the Department of Labor with your testimony, sir.
    Dr. Weil. Well, I don't think so. What I am trying to 
clarify is that we have very clear procedures and practices 
that we do institute, and certainly under my watch, I am very 
aware about the issue of perishability that you are raising.
    And that is why in order to both protect workers and 
protect the employers who are complying with the law, the vast 
majority of employers are farmers who are living within the 
statute, are also being protected by our procedures which, 
again, in only 28 of 7,500 investigations have we actually 
used. We have used. We have used----
    Mr. Schrader. You can't even describe whether or not these 
were all perishable cases. I would hope that in the future the 
Department of Labor would be a lot more respectful of our 
Constitutional guarantee of due process if they are going to 
use this hot goods provision. I strongly advocate it not be 
used in a perishable cases, or if it is, that once the farmers 
pay their fine, their alleged fine and their alleged back 
wages, that the Department would at least let these products go 
forward so American commerce could resume. We are in tough 
times now, Dr. Weil.
    And I will yield back.
    The Chairman. Thank you, Mr. Schrader.
    We are going to try to hold to the 5 minute limit. Then we 
will, as I said, we will have multiple rounds of questioning.
    And I would now like to recognize Mrs. Hartzler.
    Mrs. Hartzler. Thank you, Mr. Chairman.
    Dr. Weil, this is a question for you. If a farmer offers 
all of his or her workers a compensation package based on 
performance, and those workers were to take advantage of that 
opportunity by working harder to receive the higher 
compensation, is that a violation of the Fair Labor Standards 
Act? Yes or no is fine.
    Dr. Weil. No, that would not be a violation as long as they 
earned at least the minimum wage for the individual worker.
    Mrs. Hartzler. In a recent enforcement action the 
Department of Labor determined that anything over 60 pounds of 
blueberries picked per hour to be abnormal when expert sources 
and research has proven that normal is anywhere between 100 and 
200 pounds. Is it normal practice for the Department of Labor 
to ignore the research of experts in agriculture production in 
harvesting when taking enforcement actions against farmers?
    Dr. Weil. Congresswoman, we undertake, in order to make an 
assessment of whether the piece rate that is being provided and 
the actual work done complies with minimum wage standards 
through a combination of interviews with workers in the fields, 
at the actual employer involved, a review of payroll records, 
and a discussion with the employer and any farm labor 
contractors in order to ascertain whether individual workers 
have been paid according to the minimum wage.
    We are increasingly using time studies based on the 
activities of workers in the field at the time of the 
investigation because, as you know, there is an enormous 
variability in the rate of any farm activity that can be done 
based on particular conditions, harvest, even sometimes 
subsequent rounds of harvesting, the same crop can yield 
different kinds of rates of output.
    And so that is why we have to look very closely and rely in 
particular on employers keeping good records so that we can 
ascertain whether a piece rate meets the minimum standards, or 
goes beyond that.
    Mrs. Hartzler. So as you recall, many of these workers are 
paid based on productivity, or at an hourly rate, so are these 
works compensated by the Department of Labor for the time they 
are unable to work due to these interviews you just talked 
about?
    Dr. Weil. We try to, to the best of our ability, and again, 
that begins with our hope that employers are keeping good 
records which assist both them and the workers in making a 
judgment about whether in the period of time we are 
investigating, whether workers have been compensated for their 
time at least meeting the minimum standards of the Fair Labor 
Standards Act.
    Mrs. Hartzler. Now, a lot of these workers have a contract 
labor agreement with the employer ahead of time based on 
compensation, based on productivity, and not necessarily 
hourly. So does the Department of Labor have authority to 
change the terms of these compensation agreements?
    Dr. Weil. No, we do not. And in fact, our whole statute and 
our procedures in the agricultural area are built around the 
fact that we know that piece rates are a common practice used 
throughout agriculture in lots of different industries and what 
we are trying to ascertain, again, is whether workers have been 
compensated to the minimum standards provided in the law, which 
is the minimum wage in the Fair Labor Standards Act.
    That requires us to have very careful specific procedures 
to ascertain whether that has been attained, and you are quite 
right, in agriculture, that often is the piece rate. So that is 
the basis we make our comparison in trying to very carefully 
see if each worker has been paid according to the piece rate 
compensation system in such a way that it meets the minimum 
standards required by the law.
    Mrs. Hartzler. Now, in a recent enforcement action the 
Department of Labor insisted that a farmer waive all rights for 
future action on the issue including appeal. Now, is this the 
policy of the Department to intimidate farmers into waiving 
their Constitutional due process rights?
    Dr. Weil. I think you are describing a consent judgment, 
which is a very common occurrence where a court reaches 
agreement with all of the parties, where parties agree to that, 
and one of the provisions of a consent judgment is that the 
final agreement will be respected by the parties.
    So if you are speaking about a consent judgment, which is 
entered in voluntarily by the parties in conjunction with a 
court, those typically say that those--the agreement or the 
terms of the agreement----
    Mrs. Hartzler. Well, I have 7 seconds left. What was there 
on the ground, or in this case, or has the Department ever 
asked a farmer, or said, here is your fine, but if you promise 
not to appeal, it will be X amount. It will be less?
    Dr. Weil. That would not be, the procedure would not be 
undertaken in that way. Certainly, in regards to what I would 
want our investigators to do, and the way they do carry out, 
that we would get to that stage through a different process 
than your question implies.
    Mrs. Hartzler. Okay. I yield back.
    The Chairman. Thank you, Mrs. Hartzler.
    I can tell you that is exactly what has been done by other 
agencies. I know where they levied a multi-hundred thousand 
dollar fine and said, but if you will write us a check for 
$25,000, for example, we will waive all of the other fees. That 
has been done, I know by the EPA in my district with regard to 
paperwork violations.
    Ms. DelBene.
    Ms. DelBene. Thank you, Mr. Chairman.
    I would like to thank Chairman Scott and Ranking Member 
Schrader for holding this hearing, and thank you Dr. Weil and 
Commissioner Avakian for being here today.
    No one here would condone violations of the Fair Labor 
Standards Act, but the actions taken by DOL in regards to these 
cases appear to be egregious. My district in Washington State 
is one of the largest berry growers per capita in the country. 
This is especially true for raspberries, and increasingly so 
for blueberries. I am very concerned that we will see these 
actions repeated in my district against farmers who play by the 
rules.
    It seems like your investigative method leaves our 
constituents with a false choice, admit guilt where there may 
not be any, and pay a hefty fine to save your crop, or fight 
the case and lose the crop.
    For example a blueberry farmer in Washington State was 
cited for employing underage children which that farmer denied. 
However, that farmer, the employer, could not verify or dispute 
the violation claimed by DOL because DOL refused to release 
their notes. Hot goods was invoked on 26,000 pounds of 
blueberries and a 30 day hot goods hold was placed on the rest 
of the crop worth about $35,000. The employer was forced to 
admit guilt.
    So, Dr. Weil, the scenario, and we have heard many of these 
scenarios before, you have someone in a situation where they 
have no place to go for due process. They have to potentially 
give up their crop. Does that seem fair? Is that an appropriate 
action to be taken?
    Dr. Weil. Thank you, Congresswoman. I feel like I should 
clarify the process because I want to be clear.
    Ms. DelBene. I just want to say this: the fundamental part 
here is that you have created a situation where a grower may 
have only a few days to go to court, win a judgement, and make 
their crop available in the market for them to meet the asking 
price without suffering a loss, or a decline in value.
    Do you ever think it is okay to do that? Do you understand 
the situation you are putting a farmer in who may very well 
have a strong defense, and if they defend themselves they may 
not get their crop back in a saleable condition?
    Dr. Weil. And thank you.
    What I wanted to clarify is our investigators cannot block 
shipment of the goods. They are not allowed to do that. When 
they find violations in the course of an investigation, when 
they meet with the employer, they ask the employer to 
voluntarily restrain shipment of those goods until the 
situation can be resolved.
    If a resolution can be made, which it is in the vast 
majority of cases, the shipment of goods are released and 
everything proceeds with both compliance, assuring both the 
workers that they have received what they are entitled, and 
that other farmers who are complying with the law are not put 
at a disadvantage----
    Ms. DelBene. But an agreement means an admission of guilt 
for someone who may feel like they have a case and are not 
guilty of the violation they have been accused of?
    Dr. Weil. If the parties feel that they are not--that the 
violations are inappropriate, they are within their rights, and 
if we feel we need to not allow the goods to flow, we need to 
go to a Federal Court.
    And in a Federal Court both the employer, the grower, the 
farm labor contractor, and the----
    Ms. DelBene. But you understand that every day for a 
perishable product like a berry, is prevented from going to 
market its marketability declines, in the end even while a 
court may find that they are not guilty of the infraction?
    Dr. Weil. Right.
    Ms. DelBene. Are you going to pay them back for the product 
that they weren't able to take to market?
    Dr. Weil. We are very aware, and again, this is why we use 
it only in very specific instances, of the perishability of the 
product, and that is why we move quickly to resolve the problem 
as quickly as possible for the benefit of the workers and of 
the growers involved.
    Ms. DelBene. But it is not. In a perishable case, without 
defining what quickly means, that product is gone. That farmer 
who, if found not guilty, now has lost their product unfairly, 
and that can't be returned to them. Isn't there another method 
that can be used without taking their crop?
    Dr. Weil. Again, we can ask the parties to voluntarily 
refrain from shipment, but we do not seize the goods. We are 
not allowed. We are not authorized by the statute to seize the 
goods. We can go to a court in the case that we can't resolve, 
which are, what are, when we have used this authority in 
significant cases. I would point out that the average hot goods 
case has back wages due that are six times the level of overall 
agricultural cases; that the number of employees affected are 
eight times----
    Ms. DelBene. But Dr. Weil, I just want to point out that we 
are not talking about all hot goods cases. We are talking about 
a very specific cases of perishable, only perishable goods 
because once again, the value will be gone by the time it comes 
to resolution.
    I have run out of time so I yield back. I think it is 
important for you to distinguish between perishable commodities 
and those that are not, because we feel like there is a big 
difference between these two perishable categories.
    Thank you, Mr. Chairman, and I yield back.
    Dr. Weil. I understand that. Could I just clarify, 
Congresswoman, that the statistics I gave you were specific for 
agriculture.
    Ms. DelBene. It is not just agriculture. Perishable goods, 
not all of agriculture has the same deadline that, for example, 
for certain fruits and vegetables have.
    Thank you, Mr. Chairman.
    The Chairman. Before I recognize Mr. Yoho, Dr. Weil, she 
asked you a very specific question in whether or not the agency 
would reimburse the farmer for the loss of their value and the 
answer to that is no. You did not answer the question, but the 
agency has never reimbursed the farmer for the loss, have they?
    Dr. Weil. The agency has enforced the Act which is our 
primary responsibility.
    The Chairman. Have you ever reimbursed the farmer for their 
loss from your action?
    Dr. Weil. I would have to--I am not aware of a situation 
like that.
    The Chairman. Thank you. Mr. Yoho.
    Mr. Yoho. I want to continue on that, Mr. Chairman, and I 
appreciate it because this is something that needs 
clarification. That was one of my questions. If a hot goods 
provision is used against a farmer and a perishable crop is 
prevented from being sold, and you said it is voluntarily, but 
as we have heard and I have experienced in our area with 
blueberries, watermelons, row crops.
    If that is voluntarily giving up and the investigation goes 
on, and that farmer is found not guilty that he did not break 
any laws, who is responsible for the price of that crop? If 
charges are brought against him and he voluntarily gives it to 
you, turns it over, but then with the investigation, they say, 
well there is no violation here, and that crop is gone, the 
value is zero, who pays for that crop?
    Dr. Weil. We would not, Congressman, enter into--the whole 
use of the hot goods would occur after an investigation is 
completed. And where there is----
    Mr. Yoho. Well, in the case of the Oregon farmer with the 
blueberries, wasn't it Dr. Schrader, the blueberries, that 
crop, was that not held up and not sold?
    Dr. Weil. There was an investigation.
    Mr. Yoho. Did the crop get held up?
    Dr. Weil. Well, again, I don't want to talk about the 
particulars of that case because it is in litigation. In any of 
our agricultural cases where we have invoked the hot goods, the 
sequence would be: We find significant and systemic violations. 
We enter into discussions with the employer and the farm 
labor--or the farm labor contractor about our findings. In the 
course of those findings, or in the course of those 
discussions, we would indicate that we think there are goods 
that are hot, that might also be because of not just back 
wages, but because of child labor violations.
    Mr. Yoho. Well, I have had situations where they have come 
on the watermelon farms you have a short time you brokered 
those melons and if something comes up like this and you are 
out there and you say, ``Hey, we have labor violations there,'' 
that farmer, according to you, has the right to voluntarily 
relinquish his crop or sell it.
    If he voluntarily relinquishes it, on the threat of he is 
in violation, and then it is proven he is not and that crop 
doesn't go anywhere, there is a lost crop. Somebody has lost 
some money on that and there should be restitution back to the 
farmer if he is found innocent.
    I want to move on to something else. You stated between 
Fiscal Year 2009 and 2013 Wage and Hour concluded nearly 7,500 
ag investigations. Do you have figures for the years of 2005 to 
2009, the amount of active investigations that were concluded? 
And if not, can you get me those.
    Dr. Weil. I could. I would be happy to get you those.
    [The information referred to is located on p. 44.]
    Mr. Yoho. I would love to see those. Again, I come from a 
large agriculture area.
    Dr. Weil. Yes, sir.
    Mr. Yoho. And there is that big differentiation between 
perishable and non-perishable like a peanut. You know, you can 
plant or harvest a peanut, and you don't have to rush it right 
away like you would a blueberry to a storing locker.
    What we have seen in our area is there has been an 
escalation in the Department of Labor investigations in these 
fields where there is migrant labor. And I understand why you 
are doing that.
    But there has almost been like a rabid response--I have 
been around agriculture since I was 16 years of age, and we 
have seen just a ramp-up in the amount of investigations with 
this Administration.
    And I base that on talking to a person at HHS and the 
Department of Labor. And I asked them if they have increased 
the amount of investigations. And they said, ``Oh, yes. Under 
this Administration, we were ordered to increase those.''
    And I want to know why that is.
    Dr. Weil. Well, let me speak about what we have done in 
terms of Wage and Hour in targeting our investigations.
    And it is very true since the beginning of the 
Administration we have focused on sectors of the economy where 
we find evidence--and, again, we are very data-driven--of 
higher levels of violations and have focused our attention, 
given the fact that we have only 1,100 investigators and 7.3 
million workplaces to investigate, on industries, including 
some agricultural industries, where we find high levels of 
violation.
    So the trend you are describing is part of a larger 
emphasis on focusing our very limited resources on the 
industries and employers where we believe the violations are 
highest. And that is very consistent with the basics of our 
statute in terms of both protecting workers and responsible 
employers who are playing by the rules.
    Mr. Yoho. And I get the same feedback from the producers in 
our area, that the Department of Labor treats our producers 
like they are guilty and needed to be proven innocent. And I am 
hearing that in Florida. I am hearing that in Washington and 
Oregon and where Mrs. Hartzler is from.
    And I will save my questions for the next round.
    The Chairman. Dr. Weil, before I recognize Ms. Kuster, I 
think profiling is illegal.
    Ms. Kuster.
    Ms. Kuster. Thank you, Chairman Scott and Ranking Member 
Schrader, for holding this hearing.
    And thank you to our witnesses today.
    I believe that enforcing our labor standards and ensuring 
the equitable treatment of farmworkers is incredibly important, 
but I am concerned about the heavy-handed actions taken by the 
Department of Labor when it comes to the cases that we have 
heard about today in Oregon.
    I have spent a lot of time over the past year talking to 
farmers in New Hampshire, and I have heard quite a bit about 
the difficulties they face trying to comply with shifting 
requirements and disagreeable staff at the Department of Labor.
    I believe in enforcing our Wage and Hour laws, but I also 
think that the Department of Labor needs to start making a 
greater effort to work with the states and with the farmers in 
this process.
    My questions this morning are for the Commissioner.
    Can you talk to me about your concerns with the approach 
that the Department of Labor took in these cases and whether 
there are other tools that could be used to ensure that farmers 
are adhering to our labor standards.
    Mr. Avakian. Mr. Chairman, Congresswoman, there are many 
different investigative tools and prosecutory tools that can be 
used, other than hot goods, in the thousands of investigations 
we do and in what I am sure is the tens of thousands of 
investigations that the United States Department of Labor does. 
Statistically speaking, virtually none of those use the hot 
goods.
    And so you do a full investigation, oftentimes based on 
probable cause that a violation is occurring somewhere. After 
you have a substantial amount of evidence that a violation has 
occurred, you issue charges. And then you enter a prosecutorial 
process in which the respondent, like a defendant, has a chance 
to then defend themselves.
    That would be the typical process used. And that works very 
well with respect to prosecuting bad actors and protecting 
workers.
    In this particular case, we have, I suppose, two primary 
concerns. One is that, first, we disagree that--we think that 
there is an inherent problem with the use of the hot goods 
provision with respect to perishable items, even if you do go 
through the right process of getting a hot goods order.
    But in the cases in Oregon, it involved not the obtainment 
of a hot good order, but the threat of one, and that the 
farmers could avoid the legal process of the hot goods motion 
if they simply paid up and paid up quickly. That disparity in 
power is what causes the Constitutional due process and, we 
think, search and seizure and commerce clause problems.
    The second concern we have is, post the Federal District 
Court's order vacating the consent judgments in Oregon, we do 
not know what the status of the damages are, where the money 
is, and are unclear why, given the order vacating the 
judgments, the money has not been returned to the farmers.
    Ms. Kuster. Well, it seems to me, as an attorney and a 
litigator, and as a practical matter, doesn't it make more 
sense to you that, if the goods were sold, then the farmer 
would be in a position to pay whatever fines were due if that 
person was found to be in violation?
    The whole point of our judicial process, innocent until 
proven guilty, is that you have the opportunity to make your 
case. And I am quite confident that the legal sanctions would 
be sufficiently strong to discourage violations. My time is up, 
but I am just wondering, doesn't that just make more common 
sense?
    Mr. Avakian. Mr. Chairman, Congresswoman, yes. It makes 
common sense. But you also are implicitly hitting on a very 
important legal concept that also is related to the deprivation 
of due process rights here.
    In a hot goods action, if, hypothetically, the government 
were to take the goods, sell the goods, or in some way obtain 
the money that it is worth, that would be one thing, because 
then the money could be used to pay the workers or could be 
held in trust while the investigation is completed and, if the 
investigation exonerates the farmer, the money could be 
returned.
    The difficulty here is what--the legal term of conversion. 
In this type of a situation where the blueberries, for 
instance, are held in a warehouse for more than 3 or 4 days and 
possibly spoiled, the value of the goods has been converted to 
zero.
    Ms. Kuster. Right.
    Mr. Avakian. And there--not only is not then money 
available in order to pay the workers, but there is no value of 
the product left either for the government, for the farmer, or 
for the workers. And that conversion of the goods is what 
creates the imbalance of power leading to the deprivation of 
Constitutional rights.
    Ms. Kuster. Thank you very much. And thank you for making 
the trip out here. That was precisely my point, but you said it 
much more clearly.
    And thank you, Mr. Chairman. I yield back.
    The Chairman. Thank you. Mr. LaMalfa.
    Mr. LaMalfa. Well, we have burned over an hour already in 
this Committee.
    Dr. Weil, since we can't talk specifically about a case, 
have you ever had like a traffic violation or some sort of 
thing where you have had to--received a ticket for something to 
do with your car, whether it was parking or speeding or some 
other thing like that? You ever got one of those?
    Dr. Weil. I feel I should have advice of counsel before 
answering that question.
    Mr. LaMalfa. That would fit with the hour so far.
    Dr. Weil. Yes, I have. I have.
    Mr. LaMalfa. And so have you ever felt like some of those 
were maybe not just and you send the ticket in there with a 
payment and you want to fight it in court? You ever done that?
    Dr. Weil. I have, on occasion.
    Mr. LaMalfa. Yes. Me, too.
    But I always get this yucky feeling when I send the check 
in with the thing--with the notice, the summons, whatever you 
call it, that my chances of getting my check back aren't very 
good because I am probably going to be found guilty anyway.
    I think that is the same feeling, only multi-extrapolated, 
that these growers face, is that, ``I am probably not going to 
get a good shake at due process here.''
    And then, when you invoke hot goods and you have a 
perishable product--I am a farmer in my real life, too. I 
happen to farm rice. So perishability is a lot different than 
it is for fruit growers and other crops of that nature, milk, 
like that.
    And so you have bought berries at the store. Right? 
Blueberries, strawberries, raspberries especially. Right?
    Dr. Weil. Yes, sir.
    Mr. LaMalfa. And so, when you get them home, if you kind of 
forget about them in the back of the refrigerator for a couple 
of days, you get--that white fuzz starts growing on them. 
Right? And so you think, ``Boy, that was sure a short shelf 
life for my berries.''
    And so actions like this just take a big chunk off the back 
end of the shelf life of the farmer's product that he is trying 
to get to the market. And I don't see how in the world that--if 
you brought an action to them, that it would be seen as fair in 
any fashion.
    And why in the world--answer me this question. Why would 
they want to voluntarily hold on to that crop, whether it is in 
the field or maybe a warehouse that they are paying by the hour 
or by the day to keep it cold-stored and maybe it is a 
warehouse that has a fast turnover and you have to get this 
product out because the next farmer is coming in?
    Why would they voluntarily keep that if they feel that they 
are in the right and they have to get this product to market 
before the white fuzz starts growing on it that we have all 
experienced in our refrigerator?
    Dr. Weil. So--and my staff knows I love analogies as well.
    So if I could go back to your first analogy and then go to 
your second analogy, when I make the decision whether or not to 
contest a traffic ticket in my hometown, I do it on the basis 
of a trust that, if I do decide to contest that ticket, I will 
get due process.
    Our procedures are to provide growers or employers, 
generally, that same confidence in the process. That is why we 
have these procedures that are very carefully undertaken----
    Mr. LaMalfa. But, sir, the government is not holding on to 
your car in impoundment in this case so you can't get back and 
forth to work or drive to get your kids to school or whatever 
is going on----
    Dr. Weil. And neither do we seize the goods. We are not 
allowed to seize the goods. We do not----
    Mr. LaMalfa. You talk about voluntarily holding on to the 
goods. Why would they do that when they have that time line? 
You get the time line. Again, you get how stuff rots in the 
fridge or cold storage. Why would they do that?
    Dr. Weil. And that is why our investigators move with 
alacrity in those situations----
    Mr. LaMalfa. Alacrity?
    Dr. Weil.--because we know that the goods are perishable. 
And we are very cognizant of that, and that is why we have used 
this particular provision in very few of the 7,500 cases 
involved in it. I----
    Mr. LaMalfa. But when you are that case, it is a big deal. 
When you are that case. And so you either sign on the dotted 
line saying, ``I basically admit guilt, and I pay a fine or put 
it in escrow.''
    See, what I do not understand is that--how come you can't 
recognize the timeliness of this and still have your 
investigation ongoing? And if they are fine--or if they are 
guilty, you can fine the heck out of them later.
    Dr. Weil. Right.
    Mr. LaMalfa. But you go though your investigation. But why 
would you have the grower held up with the perishable product 
that is going to have fuzz growing in the customer's 
refrigerator?
    They may not buy that brand anymore from that store anymore 
because they don't like that berry now because of this holdup 
on a hot good that is a perishable product. That makes no sense 
to me.
    Do you get that, sir?
    Dr. Weil. I understand what you are saying, Congressman. 
And that is why very often, when we feel the discussions are 
moving in a positive direction, we use escrow for precisely the 
reasons you have describe.
    Mr. LaMalfa. How many days between these discussions and 
escrow? What if it is on a weekend? How does all this work?
    Dr. Weil. It would depend on the particular instance that 
we are discussing. But there is--in the vast, vast majority of 
cases, those goods move, including the cases in Oregon. Those 
goods moved. They were not withheld, ultimately. There was a 
resolution----
    Mr. LaMalfa. Under a possible threat of being taken to 
court and having a procedure done in court to cost them more 
and more money, unless they just give in and go with it.
    Mr. Chairman, I will yield back until the next round of 
questions.
    The Chairman. Dr. Weil, you stated that you had only used 
this 28 times. Is that correct?
    Dr. Weil. That our--our records in our investigation show 
the hot goods provision being used 28 times since 2001. Yes, 
sir.
    The Chairman. How many times have the people in your agency 
threatened to use it?
    Dr. Weil. My understanding of how we keep these records is 
that these indicate times that the hot goods provision have 
been invoked by our investigators.
    The Chairman. In other words, you have no idea how many 
times your investigators have threatened the farmer with them?
    Dr. Weil. It would be against our protocols--again, I 
wouldn't--I wouldn't call it threatening employers or farmers.
    It would be getting to the point where they are being asked 
to restrain shipment of the goods because of the findings of 
the investigation.
    The Chairman. If an 800 pound gorilla comes up to you and 
says, ``Give me your wallet or I am going to take your car'' 
and you hand over the wallet, did you voluntarily give the 
wallet?
    Dr. Weil. I--I----
    The Chairman. It is a hypothetical. We won't waste time on 
that. But I will get to some specifics, if you will.
    Dr. Weil. Yes.
    The Chairman. First of all, the only reason that this is 
still in court is because the agency is using taxpayer dollars 
to appeal the ruling of the court, which the farmer--again, the 
American citizen--had to use their private dollars to defend 
themselves against their government.
    And that--the government is the 800 pound gorilla in this 
case, and the farmer won. And I quite honestly think you are 
trying to teach that farmer a lesson in that, ``If you stand up 
for your rights, we are going to pummel you,'' as the 800 pound 
gorilla.
    You stated that there have been 7,500 investigations.
    Dr. Weil. Yes, sir.
    The Chairman. And that there was $20 million collected from 
those investigations, for 46,600 workers. So your average 
investigation yields $2,666.
    How much do you spend on those investigations? How much 
have you spent of taxpayer funds on this court case?
    Dr. Weil. On the 7,500 cases or on the cases----
    The Chairman. On the 7,500 investigations, how much have 
you spent?
    Dr. Weil. I would be happy to provide you those figures. I 
couldn't say offhand.
    [The information referred to is located on p. 44.]
    The Chairman. I would appreciate that.
    And I would also appreciate--I would like to know how much 
the government has spent in this case that, again, the court 
has already ruled in favor of the farmer and the farmer is 
having to use their private funds because you, as the 800 pound 
gorilla in this case, have chosen to push them into the appeals 
process.
    You know that you can spend them into bankruptcy. You know 
you can spend that farmer into bankruptcy. And there should be 
recourse for the citizens of this country when the 800 pound 
gorilla does anything and everything that they can to take 
everything that they have. There should be recourse.
    And there is an Equal Access to Justice Act that is out 
there. And, quite honestly, I think that the farmers should be 
compensated for everything that you have done to them, and it 
should come out of the budget of your agency. And if that 
happened one or two times, then a lot of this stuff would stop.
    Mr. Avakian, thank you for being here.
    Have you ever seen--when is the first time that you saw the 
hot goods orders used with regard to perishable products?
    Mr. Avakian. Mr. Chairman, the three farms that it was used 
on in Oregon that Congressman Schrader spoke about is the first 
time that we experienced the use of hot goods in Oregon, to my 
knowledge.
    The Chairman. And what dates were those?
    Mr. Avakian. It was 2 years ago. Forgive me for not coming 
up with the exact dates.
    The Chairman. And they used it on three separate farms?
    Mr. Avakian. That is correct.
    I might add, Mr. Chairman, too, that, at the time, we took 
a very strong position against the use of hot goods, 
articulated that to the U.S. Department of Labor, and they have 
not used the hot goods provision in Oregon since, to my 
knowledge.
    The Chairman. Thank you for standing up for the farmers.
    And what are the common denominators--they have 
acknowledged in their testimony here today that they have 
specific things they are looking at and who they are going to 
target with their investigations.
    Have you seen a common denominator with who they are 
targeting in their profiling of who they are going after?
    Mr. Avakian. No, Mr. Chairman.
    The Chairman. I yield the remainder of my time.
    Mr. Avakian. Mr. Chairman, just to clarify, I do not have 
any knowledge one way or the other with respect to that.
    The Chairman. Mr. Schrader.
    Mr. Schrader. Thank you, Mr. Chairman.
    Commissioner Avakian, the Department of Labor has indicated 
that this hot goods authority is absolutely necessary to compel 
compliance among producers with perishable goods. They refuse, 
apparently, to think of alternatives.
    In your judgment, in your experience, could compliance of 
potential violators be achieved with alternate means besides 
imposition of hot goods on perishable products?
    Mr. Avakian. Mr. Chairman, Congressman Schrader, oftentimes 
when you are trying to catch a bad actor, it is not an easy 
thing to do.
    And, as I said earlier, it is important to aggressively 
prosecute bad actors not only to protect workers, but to make 
sure that the businesses that do follow the rules have a level 
playing field.
    And you want to use every tool at your disposal in order to 
protect the good businesses as well as the workers. However, in 
our system, administrative or judicial, there is always a 
balance between respecting the Constitutional rights of people 
that are in that type of an investigative or prosecutorial 
process with the need to protect the workers.
    In our judgment, the use of hot goods with perishable items 
creates a situation in which there is much, much too much, 
leverage on the part of the government to extract whatever type 
of agreement would be necessary from a suspected, not proven, 
bad actor. And that huge imbalance of power creates a 
Constitutional due process problem.
    And so we do believe that, whether or not that kind of 
leverage would be effective in getting a result, it is just 
inherently the wrong method to use and that we should rely on 
the other tried and true and tested methods that we use in 
investigations and prosecutions.
    Mr. Schrader. In the case with the Oregon farmers in 2012, 
the Department refused consistently to give virtually any 
details of their investigation and the alleged violations.
    What is the policy for the Oregon Department of Labor in 
disclosing details of alleged violations to individuals?
    Mr. Avakian. Mr. Chairman, Congressman Schrader, we do--
between our Civil Rights Division and our Wage and Hour 
Division, we do, on average, over 5,000 investigations a year.
    We receive over 60,000 calls a year from Oregonians with 
questions about their rights on the job or in housing and, like 
I said, respond to about 20,000 calls a year from Oregon 
businesses that are looking for cooperative help in navigating 
the regs in state and Federal laws.
    So we have a good deal of experience in fielding questions 
from business and from the public in these types of situations.
    Generally speaking, what we look for is whether or not 
there is probable cause that some type of violation is 
occurring. So either somebody calls and gives us their story of 
what is happening to them on the job or we get a tip from a 
third party that there may be violations occurring.
    And if we believe it is credible evidence, we send an 
investigator or a team of investigators in order to interview 
the worker, to get documents from the employer, interview the 
employer.
    If we believe that there is substantial evidence that a 
legal violation has occurred, we issue formal charges and, at 
that point, enter a prosecutorial system in which we, on behalf 
of the people of Oregon, are trying to obtain damages for the 
individual we believe was harmed.
    And, in that process, the employer has the ability to 
defend themselves in front of an administrative law judge, with 
my position of Labor Commissioner being the eventual decider of 
the case. That is the process we use.
    Mr. Schrader. That sounds like a very different process 
than what we have heard outlined with the Federal Department of 
Labor at this time.
    How closely does the Federal Department of Labor work with 
you in investigations? My understanding, based on your 
testimony, there is more investigations ongoing in Oregon as we 
speak, several other farms being checked into. How much lead 
time did you get on these folks coming to Oregon? How do you 
work with the Department of Labor?
    Mr. Avakian. Mr. Chairman, Congressman Schrader, in the 
cases of the three blueberry farms a couple years ago, we 
didn't know about those investigations until they were 
occurring.
    I must say that Dr. Weil has very graciously in recent 
weeks called me personally, extended his hand in a cooperative 
effort for our agencies to work together in the future to use 
the best of our resources as efficiently as possible, and I am 
quite encouraged by the reaching out that he has done in recent 
weeks.
    Mr. Schrader. So, how much notice did you get for the 
investigations that are ongoing right now? You talked with Dr. 
Weil a few weeks ago, apparently. How much--did he talk to you 
about the investigations that, obviously, the Department plans, 
months, maybe a year, in advance. Did he talk to you about 
coming out to Oregon at that time?
    Mr. Avakian. Mr. Chairman, Congressman Schrader, I think 
you are referencing some recent investigations in the last 
couple weeks on ten or eleven blueberry farms in Oregon.
    We didn't have any idea of those investigations until they 
were occurring. So we are looking forward to a very cooperative 
future with the Department of Labor.
    Mr. Schrader. It doesn't sound like things have changed 
very much, with all due respect.
    Dr. Weil--if the Chairman will indulge me just a little bit 
here--two points I would like to hone in on here going forward.
    You have testified that your agency has done over 600 
education events across the country trying to inform producers, 
manufacturers, whoever, about their rights.
    The Department of Labor has had a Memorandum of 
Understanding with the Oregon Farm Bureau along those lines. It 
was actually canceled by the Department of Labor a few years 
ago. It was specifically designed to help farmers know how to 
comply with the Wage and Hours laws of our country.
    In 2012, the Oregon Farm Bureau had asked the Department of 
Labor, the Portland Director Genkos, with the Western Director, 
Rosales, present, to review the MOU for education. You know 
what they were told? And I will quote you here: ``We are an 
enforcement agency, not an education agency.''
    How do you reconcile that with your statement and what you 
alluded to before?
    Dr. Weil. Thank you, Congressman.
    The spirit of what I spoke about at the beginning, the 600 
outreach cases that I discussed, are specific to agriculture. I 
can describe to you 24 different outreach efforts that we have 
done just in the western region, many in Portland, over the 
recent period of time where we have done outreach specifically 
to employers and farm labor contractors.
    Mr. Schrader. Why in my region is that not happening?
    Dr. Weil. That is--many of these are in Portland. And I 
would be pleased to provide you a list of these events.
    [The information referred to is located on p. 44.]
    Mr. Schrader. It seems like the director out west and in 
the Portland area in particular is not reading your memos and 
does not agree with you. I would appreciate it if you would 
reach out to them and talk with them in a little more detail.
    Dr. Weil. I would be happy to do so.
    Mr. Schrader. The other concern I have that was alluded to 
in testimony is: Where is the money? Where is the farmers' 
money? The court vacated your decision. Where is their money?
    Dr. Weil. Well, the court--that particular instance is 
still in litigation; so, I am not quite sure.
    Mr. Schrader. Well, where is the money? I mean, your agency 
has their money. Where is it?
    Dr. Weil. The money is kept in the Treasury----
    Mr. Schrader. It is $\1/4\ million.
    Dr. Weil. Oh. It is kept in the Treasury until resolution--
--
    Mr. Schrader. It has not been returned to them even though 
the court has vacated your decision?
    Dr. Weil. Well, that indicates it is in litigation, as you 
know. And so it would be inappropriate at this point until the 
process has run its course or----
    Mr. Schrader. No. I respectfully disagree on that account.
    How did you determine how many workers there were? You 
know, the farmers contested successfully in court that they 
paid all their workers what they were due.
    How did you determine that there were 1,100 additional 
workers out there? You talked about time--this is one of your 
time studies that you did?
    Dr. Weil. Sure. Again, I can't speak about the particulars 
of this case. I can say, in any agriculture investigation, 
there is a process where investigators go to the fields in 
order to ascertain the number of workers who are present----
    Mr. Schrader. How do they do that, generally speaking?
    Dr. Weil. By, basically, going to the fields, counting 
workers, speaking to workers, and then speaking with employers, 
looking at payroll records and, basically, triangulating----
    Mr. Schrader. And how do you figure out that there are 
missing workers? What does the agency do to figure out there 
are missing workers?
    Dr. Weil. Well, the calculations are based on an assessment 
of the number of workers in the field at the time of the 
investigation----
    Mr. Schrader. How do you get that calculation is what I am 
asking?
    Dr. Weil. Oh, I see. By counting people. I mean, by----
    Mr. Schrader. If they are not there, how do you count them?
    Dr. Weil. If they are not there, they would not be counted.
    Mr. Schrader. So, then, why is the agency worried about 
1,100 workers that were not there?
    Dr. Weil. Well, again, that regards the particulars of the 
specific cases in litigation----
    The Chairman. Well, I can actually tell you that you don't 
know your own procedures. You actually have a model that you 
use. There is a model that you use.
    The model figured out that it was impossible for workers to 
pick more than 60 pounds of berries in an hour. The model 
determined that. They didn't go to the field. They didn't talk 
to the workers about, ``How many can you pick in an hour?'' 
That wasn't done. It was based on a model. There was no time 
study done at all.
    As a matter of fact, there was a time study done after the 
fact by a former Department of Labor investigator. He 
determined, in a third picking--not the first, which is usually 
the most bountiful, but the third picking--that the lowest 
amount of berries picked was over 100 pounds. Top picker, 196 
pounds. That is the real world, not a model. That is the real 
world.
    How many workers do you suppose this investigation has 
found out of these 1,100 alleged workers identified with this 
bogus model that you have used?
    Dr. Weil. Representative Schrader, I cannot speak to the 
particulars of that. I cannot--I cannot----
    Mr. Schrader. I thought you might say that. I can tell you: 
70, 74.
    And how does the Department determine if a worker, 
generally speaking, was on the farm and should get paid? How do 
you find that worker?
    Dr. Weil. That is very clear, sir.
    Mr. Schrader. Oh, good.
    Dr. Weil. When we undertake investigations, we go out to 
the fields. We interview workers in the fields. We also look at 
the payroll records of the growers. This is precisely why 
record-keeping is an absolute bedrock----
    Mr. Schrader. How do you find workers that you claim are 
not on the payroll?
    Dr. Weil. It is one of the challenges of enforcing the law 
entrusted to our agency----
    Mr. Schrader. How do you find them? What do you do?
    Dr. Weil. We use----
    Mr. Schrader. I am asking just a basic question.
    Dr. Weil. Yes, sir.
    Mr. Schrader. It is not a trick question.
    Dr. Weil. I am attempting to, sir.
    We use the payroll records that the employer is supposed to 
keep. Often in significant and difficult cases where one of the 
major problems is farmers have failed to follow the statute's 
requirements of record-keeping, it makes it difficult to follow 
up on those workers.
    That is precisely why in the agricultural industry not only 
do we need to move quickly----
    Mr. Schrader. You are not answering the question, Doctor.
    I am asking you: How do you find these workers that you 
claim were on the farm? What is the policy?
    Dr. Weil. If we don't----
    Mr. Schrader. Apparently, you don't have a policy.
    Dr. Weil. Yes, sir. If we don't----
    Mr. Schrader. It is not very clear and it is not simple, 
like you said 2 minutes ago.
    Dr. Weil. If we don't have payroll records maintained by 
the employer as required by the law, we have to use other means 
to find those workers. We use--for instance, we have agreements 
with the Mexican consulate to have them help us locate workers 
who were denied their--the wages----
    Mr. Schrader. I can tell you in this case in Oregon how you 
did it. You are apparently, with all due respect, not very 
knowledgeable about your policy or you don't have a policy, 
either of which is a shame.
    They advertised in the local paper or on the radio: ``Hey, 
did anyone work at such-and-such farm during this time 
period?''
    And to the credit of the members of my community in the 
State of Oregon, there were only 70 folks who said, ``Yes. I 
worked there. Please give me some money.''
    Dr. Weil. Right.
    Mr. Schrader. Out of 1,100 opportunities, only a few people 
walked up. Maybe a couple of them were on the farm. I don't 
know. There is no way to actually know.
    Where is my farmers' money? Does that money revert back to 
the Treasury and not go to those farmers at some point in time?
    Dr. Weil. Congressman, because of the nature of the 
migratory workforce in agriculture, the challenges you describe 
are very real. And that is why we have to use a number of 
different methods to try to locate workers, in general, in the 
agricultural industries, which are sometimes hard to find, 
particularly----
    Mr. Schrader. Where is the money?
    Dr. Weil.--where the employer has not kept adequate 
records.
    Mr. Schrader. Mr. Weil, you keep not answering the 
question, and that does not help you in your case.
    I yield back, Mr. Chairman.
    The Chairman. Mr. Yoho.
    Mr. Yoho. Mr. Chairman, thank you.
    I would like, Mr. Chairman, to have this put into the 
record, that I have requested from the Department of Labor--Dr. 
Weil--to have the figures for the investigations, numbers for 
Fiscal Year 2005, 2009. And, sir, if you would kindly give me 
that.
    Dr. Weil. Yes, sir.
    Mr. Yoho. And I want to kind of build a little bit on this 
because this is something that has happened in our state.
    If a producer from a state uses a labor contractor for his 
labor needs that is certified by the Federal Government or the 
state, are they certified by both entities, Federal Government 
and state or just state? The labor contractors.
    Dr. Weil. By the Federal Government, sir.
    Mr. Yoho. So they are certified by the Federal Government.
    Is there an additional--Mr. Avakian, is there an additional 
certification they must get from a state--your state?
    Mr. Avakian. Mr. Chairman, Congressman, our state certifies 
farm labor contractors.
    Mr. Yoho. In addition to the Federal Government?
    Mr. Avakian. I actually don't know about the Federal 
Government's involvement with the certification----
    Mr. Yoho. Well, he just said that they----
    Mr. Avakian. But we do.
    Mr. Yoho. Whose responsibility--if I am the producer and, 
say, I use between 45 and 50 workers in a growing season and I 
am contracting with a contractor that is certified by the 
Federal Government and he gives me a bill at the end of the 
week, ``This is the amount of hours'' or, if it is a day rate, 
``This is the amount that we pay out daily,'' whose 
responsibility is it to track the hours of the individuals if 
it is a fluctuating workforce? Is it the farmer or is it the 
contract laborer?
    Dr. Weil. In terms of Federal procedures, that is a 
determination of joint employment that you are raising. And in 
cases where an economic realities test would speak to the fact 
that both parties are essentially employers, both parties would 
be required.
    Mr. Yoho. But I am hiring the contractor for the labor. He 
is hiring the laborers. So you are saying that I am also hiring 
the laborers individually and not just through the contractor; 
so, my responsibility is to track all the hours, as the 
producer?
    Dr. Weil. As you know, in agriculture, those kinds of 
relationships very common----
    Mr. Yoho. They are.
    Dr. Weil.--and joint employment is often found as part of 
agriculture.
    Mr. Yoho. But what does the law say? I mean, are you saying 
both of us are responsible, according to the law, or just the 
contractor?
    Dr. Weil. If on the basis of the particular facts and 
particularly in terms of the activities undertaken by both 
parties they are both exerting employment-type relationships 
with the workers in the field, they would both be responsible. 
They would both be jointly----
    Mr. Yoho. But I am only paying one entity. I am paying the 
contractor.
    The reason I bring that up is there is a case right now 
where we have a guy--they went after the contractor. He did not 
have the money. And so they sued the farmer. It went on for 4 
years. It has ruined the farmer. And he just got a settlement--
or a judgment of $100,000 that has pretty much ruined him. 
Young fellow. Young farmer.
    And it was brought on by a nonprofit, Florida Rural Legal 
Services, that--it just seemed like intimidation, is what it 
was, because it came down to--and this is one of my other 
questions.
    If you have an investigator found to offer a decreased fine 
for a violation if you pay now--and you said they are not 
allowed to do that--if you were to find that, that one of your 
investigators did that, do you have the authority to fire that 
employee?
    Dr. Weil. If we--if--certainly, if an investigator was 
undertaking activities that are against the procedures that we 
have established and the training and the guidelines in the 
Field Operations Handbook and a number of different 
subregulatory pieces we have, an investigator not following 
those protocols would obviously be subject to discipline.
    Mr. Yoho. Can you fire them?
    Dr. Weil. Well, it would, again, be based on the particular 
facts of a case. But in a case of a significant violation, 
disciplinary actions could include firing that worker. Yes, 
sir.
    Mr. Yoho. Because we hear all the time you can't fire a 
government employee. And certainly--I was on Foreign Affairs 
when Ms. Clinton said you can't fire anybody in the government. 
And that is something the public doesn't like because we are 
accountable in the private sector.
    I have one last question. The laws and the regulations that 
get written that come out to the farmer a lot of times don't 
seem like they are benefiting the farmer to make them more 
productive--or not more productive--to protect their rights.
    I know we want to protect the rights of the worker and we 
also should protect the ability of the farmer to farm, to 
produce a product, to hire the worker. But, I mean, we have 
people that come down out of the Department of Labor 
investigating Porta Potties on a farm and are using GPS 
measuring devices and, if they are over 10 apart--or 10 
beyond what they are supposed to, it is an automatic fine.
    If they have a trash can in their field for trash and the 
hole is bigger than 4" on top diameter, it is a fine. If you 
take a plastic bottle out in the field picking watermelons, 
this is a fine. But if I take an open container of water, it is 
not.
    I mean, these things just don't seem like common sense. You 
know, I want somebody to have water in the field. I think 
sometimes we overlook what we are trying to accomplish.
    I want people hydrated in the fields and whether they have 
a bottle of water or an open glass of water, does it really 
matter? And if the hole in my garbage can is 6" versus 4", does 
that really matter?
    Dr. Weil. If I may respond, Congressman?
    The Chairman. His time has expired. I apologize.
    Mr. Costa.
    Mr. Costa. Thank you very much, Mr. Chairman. I appreciate 
you holding this hearing as it relates to the impact of 
enforcement activities on specialty crops of which we grow 300 
in California.
    I have votes that are imminent down the hall in the Natural 
Resources Committee. So I don't know if I am going to be able 
to complete my 5 minutes of questions. I will submit them. But 
let's have a go at it here.
    Administrator Weil, as you know--or I hope you know--75 to 
80 percent of California's farm work is done through farm labor 
contractors. I want to pursue the same line of questioning that 
our previous colleague was asking.
    These contractors are employers for all the workers. But 
when the Department of Labor goes after a contractor based on 
these FLSA allegations, the Department will also put hot goods 
order on the grower or the packinghouse to whom the contractor 
is supplying the workers, forcing the grower or the packer to 
pay off contractors' back wages, even though they are not the 
employer and not required to make these payments.
    What steps is the Department of Labor taking to determine 
who the actual employer is before extracting these payments 
from the grower or the packers? And why are you going after 
those folks who, obviously, are not employing the workforce?
    Dr. Weil. Thank you, Congressman.
    We have established economic realities tests and factors 
that we look at in order to ascertain whether or not there is 
joint employment present not only in agriculture, but in 
general.
    Mr. Costa. Well, but--hold on.
    The second joint employment process is a situation in which 
the contractor may have workers in multiple farms, multiple 
packinghouses. That is the way the workforce is employed.
    And so what--under the law, what gives you the approval to 
make--to attach both?
    Dr. Weil. Both the law and regulations create the series of 
tests and courts have also provided a set of tests regarding 
who decides on what fields will be harvested, time of work, the 
type of work that should take place, how to perform the work.
    Mr. Costa. Yes. But these hot goods----
    Dr. Weil. All of these activities would determine----
    Mr. Costa. You are confiscating or putting a hold on these 
hot goods. You are taking the very livelihood of these packers 
or these growers. I mean, because these are highly perishable 
crops.
    I mean, after a berry crop is harvested, how much time does 
the farmer have before he or she starts suffering economic 
harm? It is almost immediate. These are perishable products.
    Were a farm is prevented from selling its harvest and then 
forced to take months to defend itself in court against claims 
by the Department of Labor, how do you survive?
    Dr. Weil. As I have said, the investigator does not have 
the right to seize the good. The investigator, based on the 
findings of his investigation in consultation with the district 
and regional office, makes a determination and asks if the 
grower or the contractor will voluntarily not ship goods until 
resolution of the violation and compliance is found.
    Mr. Costa. Mr. Chairman, I have to go vote, but I am 
frustrated because I would really like to have an opportunity 
to ask questions of both of these two witnesses. I would like 
to submit these questions for the record. I would like to 
revisit this.
    And thank you very much. I have to go.
    The Chairman. Thank you, Mr. Costa. And I apologize. I know 
sometimes the schedules run together.
    We will get both of you his written questions and would 
appreciate your responses, and they will be included as part of 
the official testimony.
    I don't have any further questions at this stage. Before we 
adjourn, I would invite the Ranking Member, Mr. Schrader, for 
any closing remarks that he may have.
    Mr. Schrader. I will be brief. And I apologize for the 
length of my questions and testimony heretofore.
    But this is a big issue. It is a very big issue. And as 
Commissioner Avakian has testified and responded to questions, 
it is about due process. It is a shame when Americans have 
their own government violating basic due process.
    The Department of Labor has clearly done that.
    Doctor, it has been tough for you to even answer some very 
basic questions about policies for finding workers and where 
the money is, how you decide what farms you go into and onto.
    And the fact is that you weren't doing the education. Now, 
maybe there is something wrong with the Department of Labor in 
my region. Maybe that is the problem. I hope you look at that 
very, very seriously. And I hope the Department reviews its 
procedures.
    Clearly, there is not much, that this Congress usually 
agrees on. But it seems like this entire Committee--Republican, 
Democratic, North, South, East, and West of this great 
country--agree the Department of Labor is wrong in using this 
hot goods provision on perishable agricultural products.
    My esteemed colleague from Oregon, the Commissioner, also 
agrees it is inappropriate. I suspect most Labor Commissioners 
around this country would come to that same conclusion.
    We do have a bill that the Chairman and I have put out. I 
would hope there would be interest in Congress in cosponsoring 
this simple bill which would remove perishable products from 
the hot goods provision.
    It was never intended to be that way. I think our 
Forefathers were pretty smart in establishing a lot of the 
procedures and never could conceive that something like this 
could be twisted in such a fashion as to prosecute and 
persecute, coerce and extort money, from hardworking American 
family farmers.
    And I yield back, sir.
    The Chairman. Thank you, Mr. Schrader.
    And I again want to reiterate what I said at the start, 
that I nor do I believe anybody else on this Committee, 
Democratic or Republican, condones violations of Fair Labor 
Standards Act.
    I think that it has been pretty uniform among the 
Committee, as Mr. Schrader said, Democratic and Republican, 
that we believe this is an unfair use of the hot gods 
provision.
    I am somewhat taken aback that the Department of Labor 
won't simply say, ``We will use the other tools that we have 
instead of continuing to use the hot goods provision.''
    Certainly, I hope that our language will pass and that will 
leave you with reasonable tools to do what needs to be done to 
enforce the intent of the law.
    If I could, I would give the farmer back his money with 
interest. If I could, I would take his legal fees out of your 
budget and I would give it back to him. But I can't, and you 
know it. Every bureaucrat up here knows that we can't do those 
things.
    But I will tell you it has reinvigorated my desire to give, 
through the Equal Access to Justice language, the rights for 
the United States citizen who, when they have been abused by an 
agency, seek recourse from that agency for the damage that has 
been done to them.
    As for now, I would like to apologize to those farmers that 
this has been done to. I think that your Constitutional rights 
were violated. I think that you have been treated unfairly. And 
I want to say thank you for being willing to put your money and 
your assets at risk and to challenge this agency in the courts 
of this land as they need to be challenged.
    And the only reason this issue is still in court is because 
the Department of Labor has the unlimited resources of the 
United States Government to continue to appeal these decisions 
when they know good and well that the United States citizen 
does not.
    With that, we are adjourned.
    [Whereupon, at 11:50 a.m., the Subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
 Submitted Statement by Hon. Greg Walden, a Representative in Congress 
                              from Oregon
    Thank you, Chairman Scott, Ranking Member Schrader, and Members of 
the Committee for the opportunity to provide testimony today on the 
troubling enforcement tactics utilized by the U.S. Department of Labor 
on Oregon farmers.
    In August of 2012, the U.S. Department of Labor (DOL) implemented 
hot goods orders, stopping produce shipments on several blueberry farms 
in Oregon's Willamette Valley for alleged violations, none of which 
were provided in detail or in writing. In at least one case, in order 
to remove the hold on their produce, the farmer was required to pay a 
$170,000 fine and sign a consent judgment acknowledging guilt and 
waiving their right to appeal.
    Shortly afterward, I joined all of my colleagues from the Oregon 
Delegation--Republican and Democrats--in writing to the Secretary 
requesting details on these heavy-handed tactics.
    While the Department was able to inspect, fine and process a farm's 
case in about a week and a half, it took 6 months and repeated prodding 
to get a written response to our letter.
    Unfortunately, the vague response we received failed to provide 
details on how and when these tactics should be used to enforce labor 
laws and left questions and uncertainty for farmers across Oregon.
    Earlier this year a U.S. District Court ruled against DOL's action, 
stating that ``. . . the validity of DOL's calculations could not be 
determined through any sort of deliberate process.'' And that ``. . . 
such heavy handed leverage is fraught with economic duress brought 
about by an unfair advantage.''
    E-mails received via a Freedom of Information Act request by the 
Oregon Farm Bureau detail confusion between the various levels of the 
agency regarding inspectors' calculations. These documents also reveal 
a disturbing coordinated effort to alter discrepancies in various 
inspectors' actions into a single narrative, likely because of the 
intense outside interest in the cases.
    Harvest is well underway this summer across Oregon and once again 
farmers are wondering if they will find themselves subject to these 
heavy-handed enforcement tactics and have their highly perishable 
produce held hostage while being forced waive their right to appeal.
    No one is advocating for unfair labor practices, but all Americans 
have a Constitutional right to due process and deserve a clear 
understanding of what to expect from an investigation by a federal 
agency that is funded by their hard earned tax dollars.
    I appreciate the Committee holding this hearing to shed some light 
on the tactics being used by the Department of Labor and to hopefully 
bring the clarity that farmers need to continue growing their 
businesses and producing the quality fruit we all enjoy every summer.
                                 ______
                                 
       Supplementary Information Submitted by David Weil, Ph.D., 
     Administrator, Wage & Hour Division, U.S. Department of Labor
Insert 1
          Mr. Schrader. Why then, all of a sudden, this new-found 
        interest in using hot goods in perishable products? Why was 
        that determined to be something that hadn't been done before, 
        and the last few years seems to have been popular with the 
        Department?
          Mr. Weil. Well, I would first point out and I would be happy 
        to look back prior to the period where you ask your question, 
        but from 2001 to 2008 during President Bush's Administration, 
        we used the authority 17 times. And then we used it 11 again up 
        until--in terms of closed cases since 2009.
          Mr. Schrader. These were all perishable products?
          Mr. Weil. These are in agriculture.
          Mr. Schrader. In perishable products?
          Mr. Weil. Well, yes, I mean, I would certainly acknowledge 
        agriculture as perishable products.
          Mr. Schrader. Well, I guess I would like after the hearing 
        for you to get me that information. There is a big difference--
        --
          Mr. Weil. I would be happy to.

    See following table for information regarding the years of each of 
the 28 cases we've identified and the ag commodity that was involved in 
each case FY 2001-FY 2013.

         Breakdown of WHD Investigations Involving ``Hot Goods''
------------------------------------------------------------------------
                                                  Section 6/    Section
   FY      Trade Name    State      Commodity          7          12a
------------------------------------------------------------------------
  2001   Jesus Ybarra       TX  Cabbage                   X
  2001   Willoway           OH  Nursery Products          X
          Nursery
  2001   Whitehouse         OH  Apples                                X
          Fruit Farms,
          Inc.
  2001   Bauman             OH  Apples                    X
          Orchards
  2001   Joe Frank          TX  Watermelon                            X
          Lopez
  2001   Zappala Farms      NY  Onions                    X
  2001   Anderson           NM  Peppers                   X
          Enterprises,
          Inc.
  2001   JM Farming         CA  Strawberries                          X
  2002   Easterling         GA  Onions                    X
          Farms
  2002   Ruben              CA  Garlic                    X
          Carrillo FLC
  2002   Agri-Care          CA  Blueberries               X
          Production
          Specialists
  2003   Aleander           TX  Onions                    X
          Gonzalez,
          FLC
  2003   Plunkett,          FL  Watermelon                            X
          Percy Eugene
  2004   Jensen Farms       CO  Onions                    X
  2006   Gregorio           GA  Onions                    X
          Tlacuatl
  2006   Taylor Farms       TX  Cantaloupe                            X
  2008   Taylor Farms       TX  Cantaloupe                            X
  2009   Caston             AR  Blueberries                           X
          Blueberries
  2009   Caston             AR  Blueberries                           X
          Blueberries
  2010   Cale Blocker       GA  Onions                    X
  2010   Armando Rivas      AZ  Peppers                   X           X
  2011   DeBruyn            TX  Onions                    X
          Produce/
          Rangel,
          Imelda
  2011   Jose               CA  Lettuce                   X
          Escamilla
          LLC
  2012   Hoffman Farms      OR  Blueberries               X           X
  2012   Greenworld,        CA  Asian Vegetables          X
          Inc.
  2012   Jorge Castro       CA  Strawberries                          X
          Farms
  2013   Otani Farms        HI  Onions                    X
  2013   Vicente Farms      WA  Blueberries               X           X
          Enterprise
------------------------------------------------------------------------
Source: Wage & Hour Division (WHD) August 2014.

Insert 2
          Mr. Yoho. . . .
          I want to move on to something else. You stated between 
        Fiscal Year 2009 and 2013 Wage and Hour concluded nearly 7,500 
        ag investigations. Do you have figures for the years of 2005 to 
        2009, the amount of active investigations that were concluded? 
        And if not, can you get me those.
          Mr. Weil. I could. I would be happy to get you those.

    The number of investigations in agriculture that were conducted 
between FY 2005-FY 2009 is 7,502.
Insert 3
          The Chairman. . . . .
          How much do you spend on those investigations? How much have 
        you spent of taxpayer funds on this court case?
          Mr. Weil. On the 7,500 cases or on the cases----
          The Chairman. On the 7,500 investigations, how much have you 
        spent?
          Mr. Weil. I would be happy to provide you those figures. I 
        couldn't say offhand.

    WHD does not construct and evaluate resource requirements based on 
the unit cost of an investigation. In FY14, WHD's overall budget was 
$224,330,000 which helps fund approximately 1,800 FTE, including around 
1,200 enforcement personnel to enforce more than a dozen different laws 
and a wide variety of labor, safety, and health standards. WHD must 
deploy resources strategically not only to enforce these statutes but 
also to ensure compliance among the approximately 7.5 million 
establishments covered by these laws. While impact cannot be measured 
by back wages alone, it is worth noting that $2,666 in back wages is a 
significant amount for an agricultural worker given that Occupational 
Employment Statistics data indicates that the median annual wage of 
agricultural workers is $18,710. See http://www.bls.gov/oes/current/
oes452092.htm.
Insert 4
          Mr. Weil. Thank you, Congressman.
          The spirit of what I spoke about at the beginning, the 600 
        outreach cases that I discussed, are specific to agriculture. I 
        can describe to you 24 different outreach efforts that we have 
        done just in the western region, many in Portland, over the 
        recent period of time where we have done outreach specifically 
        to employers and farm labor contractors.
          Mr. Schrader. Why in my region is that not happening?
          Mr. Weil. That is--many of these are in Portland. And I would 
        be pleased to provide you a list of these events.

          List of Agriculture Outreach in the Northwest Region
------------------------------------------------------------------------
 
------------------------------------------------------------------------
                             Our Western Region conducts a number of outreach events where the
                            target audience is agricultural employers and worker advocacy
                                    organizations. Below are a 24 examples of our efforts in Oregon,
                                   Washington, and Idaho in the last two years:
------------------------------------------------------------------------
       1         3/18/13  WHD staff hosted an outreach and compliance
                           assistance event for Oregon's agricultural
                           employers and farmworkers in Portland.
       2         3/19/13  WHD staff hosted an outreach and compliance
                           assistance event for Washington's
                           agricultural employers and farmworkers in
                           Seattle.
       3        11/13/13  Portland Oregon District Office's conducted a
                           presentation covering labor standards for
                           agricultural employers at the 13th Annual
                           Willamette Valley Ag Expo. The presentation
                           provided coverage principles, exemptions and
                           regulatory requirements for agricultural
                           employers under the FLSA and MSPA. The
                           division also provided informational
                           materials and included a question and answer
                           session following the presentation.
       4         12/4/13  Portland District Office (PDO) provided a
                           presentation on agricultural labor standards
                           for farm workers at the Oregon Human
                           Development Corporation's (OHDC) staff
                           meeting. OHDC serves well over 300 farm
                           workers a year. PDO provided the staff with
                           FLSA, Child Labor and MSPA training.
       5        12/12/13  Portland District Office hosted the Forest
                           Workers Partnership meeting. The two hour
                           meeting convened to discuss opportunities to
                           improve labor conditions in forestry
                           activities.
       6         1/14/14  Portland District Office attended the
                           quarterly meeting of Oregon Foreign-Born
                           Human Trafficking Task Force held at the US
                           Attorney's office in Portland Oregon.
       7         1/24/14  Portland DO spoke to students at the
                           University of Oregon's High School
                           Equivalency Program about agricultural labor
                           requirements under the FLSA and MSPA.
       8         2/13/14  Staff of the WHD's Western Region met with
                           staff at the Mexican Consulate in Portland.
       9         2/19/14  Staff of WHD's Western Region met with
                           representatives from federal and state
                           agencies, advocacy groups and community-based
                           organizations concerned with protecting
                           workers labor rights.
      10         2/25/14  The PDO met with the USDA Forest Service
                           regarding the applicability of MSPA to
                           certain firefighting jobs.
      11         2/26/14  Portland DO staff provided a training
                           presentation on agricultural labor laws at
                           the Ninth Annual Production Workshop for
                           Oregon's Commercial Raspberry and Blackberry
                           Growers at the Wellspring Conference and
                           Wellness Center in Woodburn, Oregon. The
                           event was sponsored by industry, the Oregon
                           State University, and the Oregon Raspberry
                           and Blackberry Commission.
      12          3/6/14  WHD Western Region staff provided training
                           workshops in AG Labor Compliance for the
                           first line supervisors, field managers,
                           growers and processors of the WA Blueberry
                           and WA Red Raspberry Commissions members in
                           Vancouver, Washington. This training covered
                           FLSA, MSPA and H2A basic provisions and best
                           practices and was organized by the Washington
                           Blueberry Commission's Executive Director
                           Alan Schreiber.
      13         3/13/14  WHD Western Region staff met in Boise, Idaho,
                           at the Mexican Consulate with representatives
                           from federal and state agencies, advocacy and
                           faith-based groups, unions and other
                           community-based organizations concerned with
                           protecting workers labor rights.
      14          4/7/14  Portland DO CORPS spoke at the Woodburn Oregon
                           Community Forum, which is comprised of local
                           Latino leaders in government, business and
                           community. WHD provided information
                           concerning Wage and Hour requirements.
      15          4/8/14  Portland DO provided a comprehensive labor
                           laws training for the USDA Forest Service's
                           contracting officers and representatives at
                           one of their annual meetings held in Baker
                           City, Oregon. Presentations incorporated
                           FLSA, SCA, DB, MSPA and H-2B power points,
                           followed by question and answer sessions.
      16          5/1/14  Portland DO provided a comprehensive labor
                           laws training for the USDA Forest Service's
                           contracting officers and representatives at
                           one of their annual meetings held in
                           Pendleton, Oregon. Presentations incorporated
                           FLSA, SCA, DB, MSPA and H-2B power points,
                           followed by question and answer sessions.
      17         5/16/14  Portland DO spoke to students at the
                           University of Oregon's High School
                           Equivalency Program about agricultural labor
                           requirements under the FLSA and MSPA,
                           including requirements under the FLSA in non-
                           farm work.
      18         5/19/14  PDO attended and held a booth at an event
                           sponsored by the Woodburn Oregon School
                           District's Migrant Program Welcome Center.
                           WHD provided fact sheets in Spanish, covering
                           MSPA and FLSA, and provided technical
                           assistance for those inquiring.
      19         5/31/14  Nearly 600 people attended the La Familia-
                           Cimiento para la Eternidad convention in
                           Caldwell, ID on May 31, hosted by Sal y Luz
                           Radio Catolica of Boise. WHD staff
                           participated and distributed resources at the
                           venue, providing assistance in Spanish to
                           workers with inquiries related to their hours
                           and wages.
      20         5/30/14  WHD Administrator David Weil spoke to an
                           audience in Oregon comprised of worker
                           advocacy groups and governmental agencies to
                           discuss worker issues and the meaningful
                           efforts made by the organizations to combat
                           wage violations.
      21          6/1/14  Portland DO staff provided an information
                           booth at the Mexican Consulate in Portland,
                           Oregon. Staff highlighted the laws and
                           requirements that the WHD enforces,
                           particularly relating to the FLSA and MSPA,
                           during the introduction presentation.
      22          7/7/14  PDO attend the State of Washington's Labor &
                           Industries and Worksource Columbia Gorge
                           outreach event in White Salmon, Washington.
                           The event focused on providing needed labor
                           protections information to primarily farm
                           workers who live and work in the Columbia
                           Gorge area. The area is home to vast acres of
                           wine grapes, cherry, pear, and apple orchards
                           and where one of the world's largest blocks
                           of pear orchards resides. Portland CORPS
                           Karen Clark attended the event and provided
                           FLSA and MSPA.
      23         7/17/14  The Portland DO co-hosted an event with the
                           Portland Mexican Consulate, to provide H-2B
                           and H-2A outreach to forestry workers in the
                           Medford, Oregon area. A number of public
                           agencies, nonprofit organizations and church
                           groups participated and provided their
                           materials and information.
      24         7/22/14  The Portland DO co-hosted and event with the
                           Boise Mexican Consulate, to provide H-2B and
                           H-2A outreach to forestry and ag workers in
                           the Twin Falls/Burley Idaho area.
------------------------------------------------------------------------

                                 ______
                                 
                          Submitted Questions
Questions Submitted by Hon. Jim Costa, a Representative in Congress 
        from California
Response from David Weil, Ph.D., Administrator, Wage and Hour Division, 
        U.S. Department of Labor
    Question 1. In California, 75-80% of farm work is done through farm 
labor contractors. These contractors are the ``employer'' for all of 
these workers, but when DOL goes after a contractor based on an FLSA 
allegation, the Department will also put a ``hot goods'' order on the 
grower or packing house to whom the contractor supplies workers, 
forcing the grower or packer to pay off the contractor's back wages 
even though they are not the ``employer'' and not required to make 
these payments. What steps is DOL taking to determine who is the actual 
``employer'' before extracting these payments from growers or packers? 
Why is DOL punishing these growers and packers for the alleged 
violations by the contractor?
    Answer. Under the Fair Labor Standards Act (FLSA), the grower, 
processor, and/or packer may also be an employer of farm workers hired 
by a farm labor contractor because of the existence of a joint 
employment relationship. Joint employment means that an individual is 
employed by two or more persons or entities at the same time. Where a 
joint employment relationship exists, each of the employers must ensure 
that the worker receives all employment-related rights. The Department 
must examine all the facts of a particular case to make a determination 
with regard to the nature of the employment relationships, and each 
case is different. Depending on those facts, the joint employers could 
be any combination of the grower, the processor, and/or a farm labor 
contractor. In determining whether a joint employment relationship 
exists in agriculture, the Department looks at many factors, such as 
whether the grower sets the time for work; decides where on a 
particular field the work should take place; tells the worker how to 
perform the work; does some of the recordkeeping for the workers; or, 
pays employment taxes.
    Even if the grower, processor, or packer is not a joint employer, 
the FLSA's hot goods provision may apply to them. The application of 
the provision is not limited only to employers. The FLSA, in relevant 
part, makes it illegal to ship, deliver, or sell goods in commerce that 
were produced in violation of the statutory minimum wage and overtime 
requirements. See 29 U.S.C. 215(a)(1). This provision empowers a court 
to stop or prevent the flow of hot goods through interstate commerce so 
that employers who violate the FLSA do not have an unfair competitive 
advantage over employers who comply with the law.
    Last, it bears noting that the Department does not issue hot goods 
``orders.'' The Department can only request that a federal court do so. 
The court decides the merits of the case, and the employer is provided 
an opportunity to argue against the order. For additional information 
on the hot goods provision, please see Fact Sheet 80, which can be 
found at http://www.dol.gov/whd/regs/compliance/whdfs80.htm.

    Question 2. Since 1938, how many times has DOL used the ``hot 
goods'' provision against an agricultural employer? How many of those 
times were in the past 5 years?
    Answer. Hot Goods-related data from 2001-2014 has previously been 
provided to the Subcommittee. One of our earliest ``hot goods'' cases 
occurred in 1946 when the Department obtained injunctions from federal 
court to restrain vegetable packers in Mississippi from shipping their 
goods in interstate commerce because the vegetable products were 
processed and packed by minors, many under 14 years of age, in 
violation of the FLSA's child labor provisions. The Department does not 
have comprehensive, aggregate data prior to the establishment of our 
current case management IT system in 2001.

    Question 3. In the past, DOL would allow growers to pay the back 
wages claimed into an escrow account, some or all of which would be 
returned to the grower if the claims were not upheld. Why did the 
Department stop this process?
    Without using the ``hot goods'' provision against growers or 
packing houses, would DOL still be able to pursue administrative 
actions to collect back wages that might be owed?
    Answer. The Department continues to use escrow, depending upon the 
facts of a particular case. Escrow is one of many tools available to 
the Secretary and growers, where appropriate, in negotiations to 
resolve FLSA investigations expeditiously and finally. Toward that end, 
when the Department determines that an employer is in possession of 
goods that have been produced in violation of the minimum wage, 
overtime or child labor provisions of the FLSA, we will work with the 
employer to resolve the matter. First, the Department will provide 
information explaining its findings and request that the employer 
voluntarily agrees not to ship the goods. Then, the employer will be 
provided ample opportunity to present its evidence or any other 
relevant input. Based on this information, the matter may be addressed 
with the payment of back wages, using escrow as appropriate, and a 
consent judgment, when necessary. The Department's objection to 
shipment will then be lifted and the goods can be shipped.
    In creating the hot goods provisions, Congress was specifically 
focused on protecting law-abiding employers from unfair competition due 
to goods moving in commerce that were produced in violation of the 
FLSA's minimum wage, overtime or child labor requirements. Preventing 
unfair competition is an explicit goal of the Act. Remedies other than 
use of the hot goods provision are available to obtain back wages. For 
this and other reasons the hot goods provision is used carefully and 
selectively. But, where the Department finds violations of the FLSA, 
use of the hot goods provision may be the most appropriate remedy.

    Question 4. In the agreement that Wage & Hour requires growers to 
sign, there is a provision preventing the grower from challenging the 
allegations before an administrative law judge or in court. Why is that 
included in the agreement, and doesn't that take away the grower's 
right to due process?
    Answer. The Wage and Hour Division and the grower sometimes enter 
into a consent judgment, which is a settlement agreement that is 
approved by a court upon the agreement of all parties involved in an 
action to settle the matter. The purpose of including a provision in 
the consent judgment that prevents either of the parties to the 
agreement from challenging it in court is to achieve a final agreement 
putting the litigation to rest, ensuring that it cannot be contested or 
re-litigated in the future. As with any settlement agreement, consent 
judgments are the product of compromise, with both the Department and 
the employer accepting certain conditions in an effort to finally 
resolve the matter. Both parties to the consent judgment are generally 
represented by counsel, and an employer is always free to reject a 
consent judgment. Thus, the grower's right to due process is not 
infringed upon in any way.

    Question 5. When DOL issues a ``hot goods'' notice to a packing 
house that services dozens or hundreds of individual growers, it 
prevents those growers from selling their crops, even when no 
allegations have been made against them. How does DOL justify this?
    Answer. As noted above, the FLSA makes it illegal to ship, deliver, 
or sell goods in commerce that were produced in violation of the 
statute's minimum wage and overtime requirements. See 29 U.S.C. 
215(a)(1) The section 15(a)(1) hot goods provision applies to ``any 
person'', which is defined to include any individual, partnership, 
association, corporation, or any organized group of persons engaged in 
the movement of hot goods. Thus, application of the hot goods provision 
is not limited to the employer of the worker(s) who produced the hot 
goods or to the owner of the hot goods. A packing house, because it may 
be engaged in the movement of hot goods, is also a covered entity under 
the statute which may not ship a grower's goods that have been produced 
in violation of the FLSA's wage provisions.
    Sometimes shipment of hot goods to a packing house will affect 
other goods. This is because, as noted above, inclusion of hot goods as 
an ingredient or part of other goods will render them all hot goods. 
See 29 U.S.C. 203(i) (goods include ``any part or ingredient 
thereof'').
    The Department takes steps to assist packing houses and other 
business that come in contact with hot goods in avoiding liability 
under the statute. For example, the Department contacts the packing 
house and other recipients of the request not to ship the hot goods, 
allowing them to take appropriate actions to segregate, if possible, 
such goods so that they can continue their business with regard to 
goods from their other clients until the situation is resolved.
Response from Hon. Brad Avakian, Commissioner, Oregon Bureau of Labor 
        and Industries
    Question 1. In the Federal court case involving Pan-American Berry 
Growers and B&G Ditchen in your home state of Oregon, DOL put ``hot 
goods'' notices on $5-$6 million in berries. If the growers had not 
agreed to pay the back wages claimed by DOL on the spot, what would 
have happened to those berries?
    Answer. Thank you for the questions and opportunity to discuss the 
Oregon Bureau of Labor and Industries' perspective on the appropriate 
use of the ``hot goods'' provision of the Fair Labor Standards Act.
    While I cannot speak for the U.S. Department of Labor, it's my 
understanding that the agency would have attempted to secure a ``hot 
goods'' order and if successful, prohibit the sale or shipment of the 
perishable berries.

    Question 2. In that case, the judge ultimately overturned those 
agreements, finding that DOL's conduct amounted to ``heavy handed 
leverage . . . fraught with economic duress brought about by an unfair 
advantage.'' Do you agree that DOL's use of a ``hot goods'' order at 
harvest time presents an ``unfair advantage'' for the Department that 
could be used to make a farmer sign an agreement under duress?
    Answer. I agree with the court's analysis and concern about the 
economic duress that the ``hot goods'' provision can place on a farmer 
facing the loss of a perishable crop.
    In my opinion, the imbalance of power in this type of hot goods 
action obscures any meaningful due process during the enforcement 
action and risks violating Constitutional search and seizure and 
commerce clause protections. Requiring farmers to waive their rights of 
appeal--even if future findings of fact or law would exonerate the 
farmers--runs contrary to basic rules of fairness.

    Question 3. If DOL prevented a farmer from selling his or her crop 
after it was harvested, what would the impact be on that farm?
    Answer. In the case of the Oregon farmers, the farm operations 
would be unable to gain revenue from the crops and, therefore, may be 
unable to make payroll or continue operations for that growing season.

    Question 4. After a berry crop is harvested, how much time does the 
farmer have before he or she starts suffering economic harm? Would a 
farm prevented from selling its harvest and forced to take months to 
defend itself in court against claims by DOL be able to survive that?
    Answer. It's my understanding that the economic harm to the Oregon 
farm in question would have been severe, immediate and potentially 
catastrophic.
    The actions of a farmer facing the choice of having blueberries 
spoil in a warehouse during a protracted legal process are far from 
voluntary when he or she signs a hot goods consent judgment.

    Question 5. A farm's main asset is its land, isn't that right? And 
a farmer can't move that land can he? So, if DOL were able to prove 
allegations against a farmer under the FLSA, what would stop DOL from 
collecting that money against the farmer after proving its case at a 
hearing?
    Answer. Our agency believes that we can have strong wage 
enforcement while still protecting the due process rights of farmers. 
For this reason, we regularly seek monetary collection after proving 
our agency's case at an administrative hearing.
    When applied appropriately, use of the ``hot goods'' provision can 
be a powerful and effective tool in wage enforcement. But ``hot goods'' 
should be limited to the enforcement of non-perishable items such as 
those traditionally associated with the garment industry.
    Thank you for your questions and interest in this important issue.