Oahu Farm Fined $460,000 After U.S. Department of Labor Investigators Document “Deplorable” Conditions, Back Wages Owed

BY MALIA ZIMMERMAN – HONOLULU – Fat Law Farm, which distributes herbs and vegetables to Safeway, D. Otani Produce and a number of other stores locally, and is exports 80 percent of Hawaiian-grown basil to the U.S. mainland and Canada, has been fined nearly a half a million dollars by the U.S. Department of Labor’s Wage & Hour division for its treatment of its Laotian workers.

The 425-acre farm in Leeward Oahu, owned by Frank Law, Alice Law and Tim Law, must pay $428,800 in back wages and liquidated damages to workers and another $31,200 in civil penalties because of “deplorable housing, safety and health conditions for workers,” according to judgment approved by U.S. District Judge Michael Seabright.

Fat Law Farms violated the Migrant and Seasonal Agricultural Worker Protection Act and the Fair Labor Standards Act’s minimum wage, overtime and record-keeping provisions between 2011 and 2013, court documents show. (See Fat Law Consent Judgment)

“Failure to pay minimum wage and overtime to agricultural workers has become distressingly common when large agricultural actors, such as Fat Law’s Farm, establish a clear system of nonpayment or underpayment of wages,” said Janet Herold, the department’s regional solicitor in San Francisco. “This judgment makes clear that the department will not permit the creation of a second-tier workforce in which coercion, substandard housing and underpayment of wages rule the day.”

Terry Trotter, district director for the U.S. Department of Labor Wage & Hour division in Hawaii, said his department is aiming to make the workers “whole” after they were not paid the lawful minimum wage.

Ruben Rosalez, regional administrator for the U.S. Department of Labor Wage & Hour division in Western region, said the case is extremely significant because it is “very rare”, even nationally, to have this amount of back wages.

The U.S. Department of Labor’s Wage & Hour division executed a search warrant in 2013 and reviewed Fat Law’s records.

“The department made use of a search warrant to get an honest snapshot of the pay practices and working conditions established by the employer and the documented effort to hide evidence and witnesses from inspection,” said Juan Coria, acting regional administrator for the Wage and Hour Division in the Western Region. “With the warrant, we obtained unhindered access to employee and payroll documents reflecting names and payment disbursements to workers employed at the farm, including employees paid only in cash. We will continue to protect workers, prevent abuse and enforce labor laws, particularly where workers are vulnerable and violations are so egregious, as in this case.”

Investigators discovered numerous violations including that Fat Law’s owners treated two main groups of workers very differently: Filipinos from the Philippines were paid $7.25 per hour and overtime, and Laotians were paid $5 per hour in cash, without overtime, for an average of 70 hours per week.

Trotter said the disparity in pay could lead his department to refer the case to the U.S. Equal Employment Opportunity Commission for further investigation.

And while it isn’t illegal to pay Laotian workers in cash, the case may warrant investigations by other agencies to determine if tax, insurance and employee mandate provisions were violated, Trotter said.

Farm Owners Go on the Record

While the federal decree signed by Seabright approved the judgement against Fat Law’s Farm formalizing the fines and violations, Alvin Law, spokesman for Fat Law Farm, said the document doesn’t tell their side of the story.

“Many allegations were also made about us and there are two sides to every story,” Alvin Law said.

The Fat Law farm employs 40 workers in its $5 million a year business, and said on its web site that its mission is to “provide global consumers year-round with fresh Hawaii grown Sweet basil, Thai basil, and other Asian herbs.”

Alvin Law maintained Fat Law Farm does not have to pay minimum wage if workers are given a place to stay or meals.

“Most workers would rather be paid less in minimum wage and have a place to stay and eat, rather than be paid the minimum wage and commute to work.  This is what we offered and what some of the workers wanted,” Alvin Law said.

Trotter said it doesn’t matter what agreements workers and employees enter into, because that does not trump the statutory standards and minimum baseline standards relating to housing, transportation and pay.

Alvin Law maintained “workers were supplied a kitchen, lodging and laundry area” and said because the farm provided housing, Fat Law should have had a credit toward wages.

However, Rosalez countered that the credit toward wages is only considered when housing is not substandard. Rosalez said it is “shameful” that Fat Law would consider the living conditions “standard.”

The U.S. Department of Labor’s Wage & Hour division went even further in its report, calling the Fat Law Farm housing “deplorable.”

Alvin Law also maintained there is an exemption for overtime for agricultural workers, which Fat Laws Farm was following.

“Most of our workers were under the exemption. However, what is not clear is that if a farm handles produce from another farm, even though the exemption is broad, the cases appear to indicate the exemption for overtime is lost. So during a work week one of our workers could handle 50 boxes of produce, and be exempt from overtime, but if they handle one box from another farm, the exemption is supposedly lost,” Alvin Law said.

“The bottom line is the rules are complex and we are working with the Department of Labor to become in compliance.  We would suggest working with the DOL if there are any compliance questions since many of the standards and rules are not apparently obvious to small farmers,” Alvin Law said.

“Elements of Human Trafficking”

The U.S. Department of Labor’s Wage & Hour division began its investigation into Fat Law and other Oahu farms after a series of Hawaii Reporter stories highlighted how Laotian workers are trafficked from Laos to Hawaii via a B2 visitor visa scam and then placed on one of several Asian vegetable farms where they are subjected to deplorable working and living conditions, underpaid, and essentially are living in servitude for years.

Alvin Law said there are no illegal foreign workers currently employed with Fat Law, but didn’t answer whether the farm had employed illegal workers in the past.

Kathryn Xian, founder of the Pacific Alliance to Stop Slavery, is an advocate for farm workers who have been trafficked in Hawaii. Her organization, which documented and reported the labor violations on several farms along with Hawaii Reporter over the last two years, is named as one of the entities Fat Law Farm must report its compliance efforts to.

“We are very pleased to see this step toward justice accomplished on behalf of the exploited workers on Fat Law Farms,” Xian said, who is also a candidate for Congressional District 1. “It’s an embarrassment to the State that these offenses have been going on for so long and even continue on other Hawaii farms.”

The U.S. Department of Labor’s Wage & Hour division also put in its judgment that Fat Law must not hold the passports of workers, refuse to let workers leave the farm, or order workers to pay a fee as a prerequisite to being hired, which Xian noted are all elements of human trafficking.

“We’ve been hearing serious complaints from these victims of human trafficking which also include labor law violations, the latter which was addressed by the great work of the U.S. Department of Labor,” Xian said.

Alvin Law maintains the allegations by the Department of Labor against Fat Law spelled out in the judgment is a misunderstanding, and the farm didn’t keep anyone’s passport, prevent workers from leaving or charge a fee to new hires.

“This is an allegation and could have been a misunderstanding with the DOL. Fat Law Farms respects their employees and they are free to come and go from the farm.  It is in our new employee handbook,” Alvin Law said.

In terms of passports being withheld, Alvin Law said: “This may have evolved with workers asking us to hold their passports. Our current policy is if anyone gives us a passport, we will make a copy for our records and then return it to the worker.”

Rosalez said the U.S. Department of Labor participates on a human trafficking task force and said where elements of human trafficking are detected, the appropriate agencies will be brought in to investigate.

Pesticide Poisoning Concerns Not Addressed

Xian said another concern, which the U.S. Department of Labor has no jurisdiction over, is how workers are applying pesticide on produce.

On many Oahu farms, foreign workers hired as pesticide “sprayers” get sick and have even died as a result of repeated, excessive exposure to this pesticide.

Several of the workers on Oahu farms who Hawaii Reporter spoke to through translators cannot read product labels and warnings because they are written in English, so they may not mix or spray pesticides safely.

In many cases, Hawaii Reporter found workers are not given protective gear by Oahu farm owners and don’t have the proper training to apply pesticide safely on the fruits and vegetables they grow. The fruits and vegetables are then sold at Hawaii’s farmers’ markets and grocery stores and also are shipped overseas.

“We also hope that soon, the serious offenses related to the misuse and toxic effects of pesticides, used on these farms, comes to light publicly. These workers suffer more than just wage violations. They are at risk of significant poisoning by these pesticides which they are forced to spray on crops that end up on our dinner tables,” Xian said.

In 2012, Fat Law Farm, which deemed itself  “King of Basil” in Hawaii, was ordered by the state Department of Health to destroy its entire basil crop – all 29 acres – because it used an unapproved pesticide.

Through spot testing, state investigators found the farm was using the pesticide methomyl at two of its farm properties. Methomyl is toxic to humans and for that reason was unapproved for use on some foods.

State Department of Health spokesman Gary Gill then confirmed the sale and use of pesticides are strictly regulated because they are dangerous to the untrained and unprotected sprayer in concentrated form.. Improper use can negatively impact both sprayers and consumers, Gill said.

Problems at Other Law Farms

The Law family is well known in the farming community. In addition to Fat Law, Tommy Law and Tony Law, brothers to Frank and Tim, run farms on Oahu. The family is originally from Laos, and started farming in Hawaii in 1986.

In 2011 and 2012, Hawaii Reporter produced a series of investigative reports related problems involving pesticide and working conditions at both Tony and Tommy Laws’ farms.

While the Fat Law Farm civil judgement is significant, Xian said there are abuses at many other farms across the island that need to be addressed by federal and state agencies.

“We hope that more investigative work will be done both on the Civil and Criminal level to expose the rampant exploitation of farm workers in Hawaii,” Xian said.

Editor’s note: Photos of Fat Law Farm were provided by the Department of Labor at Hawaii Reporter’s request.

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