Subcommittee Examines Labor Department's Overzealous Use of 'Hot Goods' Provision Against Farmers

Jul 30, 2014

Tamara Hinton, 202.225.0184

WASHINGTON – Rep. Austin Scott, Chairman of the House Agriculture Committee's Subcommittee on Horticulture, Research, Biotechnology and Foreign Agriculture, today held a public hearing to review the impact of enforcement activities by the U.S. Department of Labor (DOL) on specialty crop growers. Specifically, Subcommittee Members addressed growing concerns that DOL is using the "Hot Goods" provision under the Fair Labor Standards Act of 1938 (FLSA) in an arbitrary manner against producers of perishable agricultural commodities without regard for the inevitable destruction of the product and significant economic hardship inflicted on farmers and their employees.

FLSA prohibits the shipment, offer for shipment, or sale in interstate commerce, of any goods produced in violation of the minimum wage, overtime pay, child labor or special minimum wage provisions. Members expressed support for ensuring fair labor standards, but took issue with the use and threat of use of the "Hot Goods" provision by the DOL. The department has a wide range of authority to compel producers and packers to reimburse workers and pay civil penalties if they are found to be in violation of the minimum wage requirements without resorting to the use of this provision, which may impact producers' due process rights.

Further, Subcommittee Members pressed the DOL witness on how they have used this provision as a means to coerce farmers into consenting to fines and waiving their right to appeal, effectively denying farmers due process. In Perez v. Pan-American Berry Growers, two Federal courts have found DOL guilty of coercion against blueberry producers in the Pacific Northwest.

"Today's hearing was important so we can shed a light on this abusive practice by the Department of Labor. We all believe it is important to provide fair wages for agricultural workers, but the Department's actions against certain growers are egregious.  They have abused a provision in the law to threaten farmers’ due process and economic livelihoods.  It is my hope that this hearing will be a step toward ending this abuse and recognizing the limits of the 'Hot Goods' provision as it relates to the agricultural sector," said Chairman Austin Scott (R-GA-8).

"A federal court has found the Department of Labor’s actions  were coercive and violated the due process of farmers which is protected by our Constitution. I am deeply troubled that the Department of Labor has appealed the ruling of the courts, and continues to maintain that their use of ‘Hot Goods’ authority on perishable items is warranted and appropriate. It is time for Congress to move forward with our commonsense fix to end this abusive practice," said Ranking Member Kurt Schrader (D-OR-5).

Chairman Scott and Ranking Member Schrader introduced H.R. 1387, which would prevent DOL from using the "Hot Goods" provision for perishable agricultural products.

Written testimony provided by the witnesses is linked below. The archived webcast is linked here.

Witness List:

Panel I

Dr. David Weil, Administrator, Wage and Hour Division, U.S. Department of Labor, Washington, D.C.

Mr. Brad Avakian, Commissioner, Oregon Bureau of Labor and Industries, Portland, Oregon