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July 2010, Volume 16, Number 3

Fremont, Agriprocessors, FLSA

Hispanics are less than 10 percent of the residents of Fremont, Nebraska, which voted 57-43 percent on June 21, 2010 to punish landlords who rent to unauthorized foreigners and employers who hire them; employers must use E-Verify to check new hires. Fremont has 25,000 residents and 15,000 registered voters.

Fremont's city council rejected the proposed ordinance, but supporters who had collected 4,000 signatures appealed to the Nebraska Supreme Court, which allowed a vote on the ordinance. The city council warned voters that the expected $1 million cost of defending the ordinance could lead to higher property taxes or fewer city services. The ACLU threatened to sue to block implementation of the ordinance, arguing it would lead to "discrimination and racial profiling against Latinos."

Fremont, in Dodge county 30 miles northwest of Omaha, has two large meatpacking plants just outside the city's limits, including Hormel (1,300 employees) and Fremont Beef. The Fremont ordinance would not apply to these meatpacking plants, but would require city employers to use E-Verify to check the legal status of new hires and allow landlords to rent only to those with new $5 occupancy licenses issued by city police.

Similar ordinances in Hazleton, Pennsylvania, and Farmers Branch, Texas, are the subject of court battles.

Agriprocessors. ICE agents raided the Agriprocessors plant in Postville, Iowa on May 12, 2008, arresting 389 of the 900 workers. Most of the Guatemalan workers who were arrested pleaded guilty to identity theft, served time in federal prison, and were deported. The plant went bankrupt and was sold for $8.5 million to SHF Industries in July 2009, but the population of the 2,300-resident town shrank during the hiatus.

Agriprocessors CEO Sholom Rubashkin was found guilty of federal bank fraud charges on November 12, 2009 and was sentenced to 27 years in prison in June 2010. The federal government dropped immigration-related charges against Rubashkin, but the state charged him with allowing Agriprocessors to hire under-age workers. In June 2010, a Waterloo jury found Rubashkin not guilty of the state charges of knowingly hiring child workers. Jury members noted that each of the under-18 workers who testified said they knew they had to be 18 to work at Agriprocessors and presented documents when hired that showed they were 18.

As of June 2010, over 40 Agriprocessors' workers had received U-visas granted to unauthorized foreigners who cooperate with prosecutors to testify against criminals. Those receiving U-visas were struck by managers or sexually assaulted while working at Agriprocessors.

JBS. The JBS Swift packinghouse in Greeley, Colorado employs 2,300 workers represented by Local 7 of the United Food and Commercial Workers. A new three-year agreement ratified in April 2010 raises entry-level wages by $0.40 an hour from $12.25 an hour after 90 days of work. Brazilian meat company JBS acquired Swift & Co. in July 2007. Swift was the target of ICE raids at six plants on December 12, 2006 that led to the arrest of 1,282 workers and reportedly cost Swift $45 million in lost production and recruitment and training costs.

FLSA. Workers employed in meat and poultry plants must spend time putting on protective clothing to avoid injuries in places that rely on sharp knives. A recurrent issue is whether workers should be paid for their "donning and doffing" time, that is, the time required to put on protective clothing and to remove it for breaks and meals.

Class-action suits filed under the Fair Labor Standards Act allege that meatpackers have been underpaying workers when they do not pay for donning and doffing time. In June 2010, Tyson Foods agreed to modify its time keeping practices to allow workers to clock in prior to donning and to clock out after doffing certain gear. The change, affecting up to 38,000 nonunionized Tyson poultry workers, will add about 10 minutes of paid time for these workers each day. Tyson workers represented by unions can elect to adopt the new timekeeping system.

DOL sued Tyson in 2002, and a federal jury in November 2009 awarded $250,000 in compensatory damages. Tyson's new timekeeping system settles that suit and allows DOL to distribute payments of $1 to $2,500 to about 3,000 poultry processing workers in a plant in Blountsville, Alabama. DOL says that the Tyson settlement sets a pattern: "If we find a violation at one facility, it should be corrected at all the company's facilities."

On June 16, 2010, DOL's Wage and Hour Division reversed 2002 and 2007 interpretations of "clothes" that excluded protective equipment, meaning that meatpackers did not have to pay for donning and doffing time. DOL noted that several federal courts have found that donning and doffing time in meatpacking, where workers must wear protective clothing, is compensable, and that employees must normally be paid for the time they spend walking and waiting after donning protective clothing.

Some 10.3 million US workers are considered independent contractors. The Employee Misclassification Prevention Act (S. 3254; HR 5107) would make misclassification of workers as independent contractors a violation of the Fair Labor Standards Act. Employers would be liable for back and overtime pay and unemployment insurance taxes for workers they misclassified, and would face penalties as well.

Allen. Maryland's Occupational Safety and Health Agency in June 2010 proposed to fine Allen Family Foods plant in Hurlock $1 million for safety violations, the largest proposed fine in the state agency's history. Allen said it would contest the fine.

USDA. USDA issued proposed regulations on June 18, 2010 that would require meat and poultry processors to treat all suppliers of animals and poultry equally. The regulations spell out examples of unfair practices packers sometimes use to reduce the prices they pay farmers, such as having one cattle dealer acting as an exclusive buyer for more than one meat packer and thus having inside information. Processors would be required to file the contracts they make with farmers with USDA.

The number of US farms with hogs declined from 666,000 in 1980 to 71,000 in 2010, and the farmer's share of the retail price of pork declined from 50 to 25 percent over this period. The number of farms, ranches and feedlots with cattle dropped from 1.6 million in 1980 to 950,000 in 2010, and the farm share of average retail beef prices declined from 62 to 43 percent over this period.

William Neuman, "To Help the Little Guy, the Government Proposes New Rules for Big Meatpackers," New York Times, June 18, 2010. Monica Davey, "Nebraska City Torn as Immigration Vote Nears," New York Times, June 17, 2010. Cindy Gonzalez, "Immigration study stirs debate," Omaha World Herald, June 16, 2010.

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