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January 2006, Volume 12, Number 1

RICO, H-2A, H-2B

RICO. In March 2000, a class-action suit was filed on behalf of several legal immigrant workers by Hagens Berman LLP in Yakima, Washington under the Racketeering Influenced and Corrupt Organization Act against Matson Fruit Co. and Zirkle Fruit Co, charging that they conspired with an employment agency, the Selective Employment Agency, to depress wages by hiring illegal workers. The suit alleges that Matson and Zirkle told Selective to supply them with unauthorized workers, and told Selective not to send legally authorized workers.

A RICO lawsuit must first prove that the underlying crime was committed, and then show there was a racketeering enterprise- -such as a pact between a smuggler and an employer. The suit was dismissed by a federal judge in Spokane, but the 9th Circuit Court of Appeal in September 2002 ruled that the suit may proceed, that is, RICO gives standing to legal workers to sue their employers whom they allege depressed their wages by conspiring to hire undocumented workers at below-market wages. The 9th Circuit concluded that: "We are unable to discern a more direct victim of illegal conduct" than the legal workers whose wages were reduced by unauthorized migrants.

In 2004, the suit was given class-action status, a victory for Chicago lawyer Howard Foster, who has filed several RICO suits against employers of unauthorized workers. In December 2005, William Zirkle and two other executives, Gary Hudson and William Wangler, agreed to pay $1.3 million to settle the suit (Zirkle Fruit was dropped as a defendant) before the scheduled January 9, 2006 trial.

The U.S. Supreme Court in 2006 will hear a case asking whether RICO can be used against Mohawk Industries, a Georgia carpet company accused of hiring illegal workers and depressing the wages of legal workers.

H-2A. The state of Washington reached a $230,000 settlement with Los Angeles-based Global Horizons September 22, 2005 over the treatment of 170 Thai workers who picked apples in the state in 2004. Global agreed to reimburse their travel costs and improperly deducted wages.

Thai H-2A workers say that they had to pay $2,000 each in Thailand to get the H-2A contracts, putting up their homes and land as collateral for the cost of getting work visas. According to the Thai workers, only persons with land and other assets that they could pledge to Global were allowed to get H-2A contracts. Once in the US, 24 of the Thai workers abandoned their contracts.

Local workers are suing Global in federal court, alleging that they were not hired when they applied for the jobs that Global filled with Thais.

Washington's Department of Labor and Industries and the Employment Security Department sent a letter to Global Horizons on December 20, 2005,saying that it was in violation of state laws requiring timely payment of unemployment taxes. Under the September 2005 settlement, Global was to retain an independent third party to investigate and provide reports on the company's treatment of workers, which it had not done.

Washington's Supreme Court, in a 5-4 decision in October 2005, ruled that H-2A sheepherders are not entitled to the state's $7.35 an hour minimum wage. Two H-2A sheepherders sued Klickitat County sheep rancher Max Fernandez, alleging that their $650 a month pay was too low.

Senator Judd Gregg (R-NH) included an amendment in the DHS appropriations bill for FY06 that allows H-2A workers to operate cider presses, which is not farm work.

Farm employers seeking H-2A workers can file their requests on-line. DOL lists prevailing wages online by state; employers seeking H-2A workers must recruit US workers and offer them the higher of the federal or state minimum, the prevailing wage , and the Adverse Effect Wage Rate

H-2Bs. The Sacramento Bee on November 13-15, 2005 explored work and life for pineros, generally foreign-born workers employed to thin and reforest federal lands in the western states. Several federal agencies are involved in programs that bring about 10,000 H-2B workers a year into national forests. USDA's Forest Service invites firms to bid on reforestry contracts and has inspectors who follow the crews to ensure the work is done properly. The US Department of Labor licenses contractors and ensures wage and hour regulations are obeyed, while the US Department of State issues H-2B visas and DHS admits the migrants who have them.

The problems begin in the workers' countries of origin, with many migrants going into debt in order to get a contract to work seasonally in the US. Since recruiters often promise wages of $10 an hour or more, migrants are encouraged to borrow $1,000 for travel, $300 for a visa, and $50 or $100 for a medical check up (workers without passports must also pay their own governments to get them). Arriving in debt, most migrants are reluctant to complain, since getting fired means they must leave the US. Most H-2 forestry workers arrive in the fall to begin working on the southern pine tree plantations owned by corporations that supply most US lumber, and then move to the western mountains and onto federal land the following spring.

US employers do not have to provide H-2B workers with free housing and transportation, as under the H-2A farm worker program. Many H-2B workers complain of unpaid waiting time and overcharges for housing, transportation and food. Most say they receive little safety training and limited or outmoded equipment, leading to injuries and very uneven care and compensation.

Workers also complain that they are not paid for all of the work that they do. There are no time clocks, and some workers say that they routinely performed more hours of work than were recorded and paid. Some contractors withhold pay during the season, and then step up the pace of work near the end of the season in the hope that H-2Bs anxious to return home will quit and forfeit the withheld wages.

In some cases, H-2B workers who successfully sue one H-2B contractor for violations and learn that the same individual continues to do reforestry work under another name. The contractors counter that advocates find disgruntled migrants to complain, and that they advance travel and salary funds to workers who sometimes do not show up to work or who leave without repaying the advances.

Most of the reforestry contractors are based in Idaho, and Peter Smith's Evergreen Forestry Services is on many lists as a contractor repeatedly violating labor laws by shorting workers pay or transporting them in unsafe vehicles. On September 12, 2002, 14 H-2B workers died when their van went into a river in Maine, and DOL eventually fined Evergreen $17,000. The fine was appealed, and Smith won $238,000 more in reforestry contracts since 2003 as Progressive Environmental, a legal move since DOL cannot revoke his contractor's license until the appeal is resolved.

There were Congressional hearings on reforestry workers in 1980 and 1993. Forest Service inspectors provide the seedlings to plant and check on the quality of the work done, but have no responsibility for labor law enforcement. DOL says that, unless there are complaints, it does not do random checks of hard-to-find workers in national forests. Accidents are to be reported and investigated, but if they are not, there are not necessarily official investigations.

Several Congressional representatives have called for reviews of the H-2B program with an eye toward strengthening its worker protections.

Tom Knudson, "New call for forest labor review," Sacramento Bee, December 31, 2005. Leah Beth Ward, "Zirkle settles job suit," Yakima (WA) Herald-Republic, December 30, 2005. Tom Knudson and Hector Amezcua, "The Pineros: Men of the Pines," Sacramento Bee, November 13-15, 2005. Leah Beth Ward, "Thai farm workers seek equity in strange land," Yakima Herald-Republic, October 9, 2005. McDaniel, Josh and Vanessa Casanova. 2005. Forest Management and the H2B Guest Worker Program in the Southeastern United States: An Assessment of Contractors and Their Crews. Journal of Forestry Vol 103. No 3. April/May. Pp114-119.