Sep 30, 2014
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Dairy Lawsuits Rise Again

Jun 30, 2014

Protect yourself against the spike in legal claims, especially these three litigation areas.

Anthony Raimondo 2010 06 photo

By Anthony P. Raimondo, attorney

As the industry faced economic crisis through low milk prices and high feed costs, the rush of legal claims against California dairies began to subside as plaintiffs’ attorneys faced difficulty collecting settlements or judgments against financially strapped dairy producers.

However, as the economics of the industry have improved, the attorneys are returning as well, and a new rush of lawsuits has arisen against California dairies. Dairies nationwide should be alert to these trends, as the nation often follows what happens in the West.

The types of claims faced by dairies include the following:

  • Wage and Hour: While federal law provides only for minimum wage for agricultural workers, such as dairy employees, many state laws impose overtime and other obligations on employers. Producers should be aware of their state’s minimum wage and overtime requirements, as well as pitfalls that can lead to liability. For example, in California, employers can credit the value of housing towards minimum wage, but only if there is a written agreement where the employee agrees to the amount of the credit. In addition, while federal laws allow for salaries that cover both regular and overtime hours, states such as California make it very difficult to defend against overtime claims from salaried dairy employees. Producers need to be aware of the wage and hour and recordkeeping requirements for their particular state.
  • Discrimination/Harassment: Dairies have seen a spike in cases alleging discrimination or harassment, often on the basis of race or national origin. Federal agencies are increasingly aggressive about claims of sexual origin or gender identity discrimination, and producers should take care to avoid such claims. Dairies should be alert to prevent teasing or other behavior that can lead to claims of discrimination or harassment. Maintaining written records of discipline and performance can also help defend against claims of discrimination. Producers should be alert to employees who are on extended workers’ compensation leave who then make claims of disability discrimination. Employers must remember that they have an obligation to engage in an interactive process with injured employees to determine what, if any, accommodation is needed to return to work, and whether that accommodation is reasonable or presents an undue hardship to the ranch.
  • Pension Withdrawal Liability: Many dairies were unionized at one time, and have moved or otherwise left the union behind. The law broadly protects financially strapped pension plans, and can impose liability on participating employers to make up the plan’s shortfall when the employer withdraws from participation. Dairies should seek legal advice if they plan to withdraw or have already withdrawn from a multi-employer pension trust, as the exposure to liability can be significant.

Sadly, as the economics of the industry improve, farmers and other employers must be cautious that the improved conditions also attract attorneys who will target farmers in attempts to divert the flow of income away from the ranch and toward the attorneys. Producers must be proactive to educate themselves and protect against this threat.

The goal of this article is to provide employers with current labor and employment law information. The contents should not be interpreted or construed as legal advice or opinion. For individual responses to questions or concerns regarding any given situation, the reader should consult with Anthony Raimondo at Raimondo & Associates in Fresno, at (559) 432-3000.

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