June 2, 2017
CapitalPress.com
15
Washington fruit company defends piece-rate pay
Supreme Court
takes written
arguments in
wage case
By DON JENKINS
Capital Press
Farmers would have to
abandon piece-rate pay if the
Washington Supreme Court
rules that workers must be
paid separately for non-pick-
ing tasks, according to law-
yers for a Wenatchee orchard
operator and exporter.
The Dovex Fruit Co. ar-
gues that piece rates benefit
skilled and industrious work-
ers, but would be impractical
if the court decides the prac-
tice violates the state’s mini-
mum wage law.
“It is not possible for em-
ployers to separately track
and pay for every second of
time that an employee is not
Nutrition
company
prevails in
trade secrets
dispute
By MATEUSZ PERKOWSKI
Capital Press
An Oregon livestock nu-
trition company has prevailed
in a lawsuit over trade secrets
against a former employee
who was found to have inten-
tionally destroyed evidence.
A federal judge has entered
a default judgment against
Yongqiang Wang, the former
employee, as punishment for
deleting emails and giving
away a computer likely con-
taining information related to
trade secrets owned by Omni-
gen Research.
U.S. District Judge Mi-
chael McShane said the “ex-
treme measure” of a default
ruling against Wang was
justified because he severely
interfered with the orderly ad-
ministration of justice in the
case.
“These actions have de-
prived the plaintiffs of evi-
dence central to their case and
undermined the court’s ability
to enter a judgment based on
the evidence,” McShane said.
Roger Hennagin, the attor-
ney representing Wang, said
he could not comment on the
ruling because he hasn’t yet
been able to discuss it with his
client, who works in China.
The complaint against
Wang was initially filed last
year by Omnigen, a company
founded by former Oregon
State University professor
Neil Forsberg and later sold to
Phibro Animal Health for $23
million.
The lawsuit accused Wang
of planning to sell feed addi-
tives in China that were based
on trade secrets stolen from
Omnigen, a company that em-
ployed him between 2005 and
2013.
Omnigen’s feed additives,
which counteract hemorrhagic
bowel syndrome in cattle, are
used by roughly 20 percent of
the U.S. dairy herd, and the
company hoped to expand its
reach to China.
Wang obtained “sham”
patents in China from con-
fidential information he ac-
cessed while working for Om-
nigen and secretly launched
two companies, Mirigen and
Bioshen, to sell the additives
in that country, the complaint
alleged.
In a counterclaim against
Omnigen, Wang denied rely-
ing on his former employer’s
trade secrets and claimed Fors-
berg unjustly enriched himself
by failing to share profits with
Wang, as earlier promised.
According to McShane,
the case was “plagued” by
evidence problems “from its
inception,” with Wang delet-
ing more than 4,000 files from
his computer despite a prelim-
inary injunction requiring him
to preserve evidence.
While many of the files
were recovered, some doc-
uments that were probably
relevant to the case were per-
manently destroyed, the judge
said.
Dan Wheat/Capital Press File
Workers harvest apples. The Washington Supreme Court is hear-
ing a case involving piece-rate pay for workers.
actually picking each piece of
fruit, so they will be forced to
abandon piece-rate pay alto-
gether,” the company claims
in a brief filed with the court.
The court ruled two years
ago that piece-rate farmwork-
ers must be paid separately
for 10-minute rest breaks.
Although the court said it
was merely interpreting the
law, the decision changed
longstanding pay practices.
Now, the court has been asked
whether piece-rate workers
must be paid separately for
tasks such as moving equip-
ment and attending meetings.
The court has not set a
hearing date, but has begun
taking written arguments.
In an earlier filing, Seat-
tle lawyer Marc Cote, who
represented workers in the
lawsuit that won paid rest
breaks, argued that piece-rate
pay robbed employees of the
fruits of their labors.
Dovex, the target of a
class-action lawsuit over pay
practices, laid out its defense
in a brief filed May 22.
According to the compa-
ny’s brief, the court’s ruling
on paid rest breaks was well
reasoned, but did not apply to
this case.
While paid breaks encour-
age workers to rest for their
health and safety, at stake in
the new case, according to
Dovex, is whether workers
will have the chance to earn
higher wages through piece
rates.
The company argues its
piece rates ensure that work-
ers are paid at least the state’s
minimum wage, no matter
what how much fruit they
pick.
According to the brief, the
company records the time
each employee arrives and
leaves work. “Dovex tracks
and records every second that
a piece-rate worker spends
working,” the brief states.
At the end of the week,
a worker’s hours are added
up. If the piece-rate pay falls
short of the company’s base
hourly wage, the worker’s pay
is rounded up.
If the court strikes down
the practice, farms will have
no way to be sure they’re
complying with the state
minimum wage law and will
be forced to switch to hourly
wages, according to the brief.
“Maybe this is what plain-
tiffs really want as a result
of their claims, but it is not
what the thousands of skilled
pickers that return each year
to Washington harvest neces-
sarily want,” the brief states.
“These skilled pickers enjoy
wages that greatly exceed
minimum wage and the piece
rate allows them to control
their earnings and time spent
working in a way that straight
hourly work does not afford.”
The company states its
base hourly pay exceeds the
state minimum wage of $11
an hour. The brief references
the minimum $13.38 an hour
that farms must pay if they
hire foreign workers on tem-
porary H-2A visas.
The brief acknowledges
piece rates benefit farmers.
“Without the ability to reward
efficient and skilled pickers,
the time-sensitive harvest be-
comes less efficient and the
employers’ costs go up,” it
states.
If the court rules piece-rate
workers must be paid sepa-
rately for other tasks, justices
also must decide how the pay
will be calculated. The agri-
culture industry favors a flat
wage, but the court in the rest-
break case sided with workers
who argued for pay based on
their higher piece-rate com-
pensation.
Simplot seeks injunction against supply disruption
Ownership of
several food
processing
companies at stake
in legal battle
By MATEUSZ PERKOWSKI
Capital Press
The J.R. Simplot agribusi-
ness company is seeking a
preliminary injunction against
a potential food supply dis-
ruption stemming from a
dispute with business partner
Frank Tiegs.
Simplot and Tiegs are en-
gaged in a legal battle over the
control of two jointly owned
food processing companies:
Gem State Processing of Hey-
burn, Idaho, and Pasco Pro-
cessing of Pasco, Wash.
Ownership of the National
Frozen Food Co. of Seattle, a
subsidiary of Pasco Process-
ing, is also at stake in the lit-
igation.
Tiegs, a large-scale Wash-
ington farmer and business
owner, filed a lawsuit claim-
ing that Simplot effectively
forfeited ownership of Pasco
Processing due to a deadlock
over whether to infuse the
company with a $6 million
capital contribution.
Simplot has filed a coun-
terclaim alleging that Tiegs
has grossly mismanaged Pas-
Mateusz Perkowski/Capital Press File
The National Frozen Foods Co. facility in Albany, Ore. The company is part of a joint venture between
the J.R. Simplot Co. and farmer Frank Tiegs and is now the subject of a lawsuit.
co Processing and Gem State
Processing to his own finan-
cial benefit by forcing them
to buy excessive amounts of
poor-quality crops from his
farming affiliates.
Although Tiegs’ takeover
of Pasco Processing is inval-
id, he has nonetheless claimed
to lenders and employees to
have sole ownership of the
company, according to Sim-
plot.
These claims have been
used to “intimidate critical
witnesses” employed by the
National Frozen Food Co.
while Tiegs has threatened to
“cut off Simplot’s supply of
critical products” with little
time to find alternative sourc-
es, the company argues.
Simplot has asked U.S.
District Judge Rosanna Ma-
louf Peterson for a prelimi-
nary injunction prohibiting
Tiegs from taking any action
based on his claim of full
ownership of Pasco Process-
ing.
Pasco Processing supplies
roughly 42 percent of Sim-
plot’s “vegetable and special-
ty inventory,” which equates
to about $54 million in sales
for the company, said Michael
Johnston, vice president of
manufacturing and supply
chain at Simplot, in a court
filing.
Since the conflict erupted,
the facility is has provided
“dismal service levels” and
may soon stop supplying Sim-
plot altogether, he said.
“If Tiegs were to act upon
his threat to cease produc-
tion for Simplot, it would
quite literally put Simplot
out of the vegetable and spe-
cialty businesses, result in
multi-million-dollar losses,
and have a devastating effect
on Simplot’s customer rela-
tionships because of failure to
meet contractual obligations,”
Johnston said.
Joe VanLeuven, an attor-
ney representing Tiegs, said
that Pasco Processing does
not plan to cut off food sup-
plies to Simplot.
The processing facility’s
operator — Washington Po-
tato Co., which is owned by
Tiegs — has agreed to contin-
ue supplying Simplot through
the end of its fiscal year in
early September and is will-
ing to negotiate a new supply
agreement beyond that date,
VanLeuven said.
“It’s very frustrating to
read this in a motion when
the reality is so different,” he
said.
Before the ownership dis-
pute, Simplot bought products
from Pasco Processing but did
not operate the facility, Van-
Leuven said. “Whether we’re
the sole owner or not, doesn’t
mean they’re not a customer.”
There’s also no evidence
of intimidation of witnesses
employed by the National
Frozen Food Co., he said.
An attorney for National
Frozen Food Co. was simply
notified that Simplot no lon-
ger had an ownership interest
in Pasco Processing and that
it’s inappropriate for NFF
employees to insert them-
selves into the dispute, other
than to provide evidence in
an impartial manner, Van-
Leuven said.
Wash. farm hopes to plant hemp soon
WSDA set to
issue licenses
By DON JENKINS
Capital Press
Capital Press File
The wet spring weather has delayed the planting of spring wheat in
northern Idaho.
Weather delays Idaho
spring wheat crop
By MATTHEW WEAVER
Capital Press
Northern Idaho wheat farm-
ers are behind on their spring
planting.
About 78 percent of the
state’s spring wheat crop was
planted the week of May 15,
compared to 99 percent the
same time in 2016, according
to the USDA National Agri-
cultural Statistics Service. The
five-year average for this time
of year is 100 percent complete.
“We’re way behind sched-
ule,” said Blaine Jacobson,
executive director of the Idaho
Wheat Commission.
Spring wheat was planted
in southwest, southcentral and
southeast Idaho, but the delays
were in the biggest growing
area, the prairies of northern
Idaho, due to snow, rain and a
late spring, Jacobson said.
Farmers were eligible for
crop insurance beginning May
15. Growers have to decide
whether to attempt a spring
crop or take a crop insurance
payment for prevented plant-
ing.
“There’s a lot of worry
about planting this late and
how late the harvest would be,
whether they would get it out of
the field before the fall storms
start,” Jacobson said.
Jacobson expects an overall
crop similar to last year’s, if the
northern region is able to plant.
Winter wheat went in with
good moisture, he said.
“It’s been cool so far, which
sometimes helps wheat grow,”
he said. “If it gets too hot too
fast, it stunts it, but it’s been re-
ally good growing conditions
for the winter wheat so far.”
For the same week, Wash-
ington’s spring wheat was 95
percent planted, down from
100 percent last year. The five-
year average for this time of
year is 100 percent.
“With the excellent mois-
ture and growing-degree
days, the spring crop could
catch up,” said Washington
Grain Commission CEO Glen
Squires.
Squires believes wheat
yields could be higher than
USDA projections of 67 bush-
els per acre for the state.
The Washington State De-
partment of Agriculture was
moving closer Wednesday to
issuing the state’s first licens-
es to grow hemp, embarking
on an experiment to bring
back a crop that’s still classi-
fied as a controlled substance
by the federal government.
WSDA’s hemp coordinator
Emily Febles said Wednesday
that the state has received six
applications to grow hemp.
The state was processing the
applications, but could issue
a license later in the day, she
said.
Washington
lawmakers
authorized hemp growing
under the guise of a research
program. The 2014 Farm Bill
allows hemp to be grown un-
der the supervision of state
agriculture departments and
universities.
Because hemp is a fed-
erally controlled substance,
Washington had to receive
permission from the U.S.
Drug Enforcement Adminis-
tration to import seeds from
Canada, where hemp farming
has been a regulated but legal
activity for two decades.
Febles said a truck carry-
ing the first shipment of hemp
seeds is on its way to the
WSDA’s secure-storage facil-
ity in Spokane, where farm-
ers will have to pick up the
seeds and plant them within
24 hours.
Hemp entrepreneur Cory
Courtesy of Richard A. Howard/USDA NRCS
WSDA’s hemp coordinator Emily Febles said Wednesday that the
state has received six applications to grow hemp. The state was
processing the applications.
Sharp said Wednesday busi-
ness partner Palmer Farms
tentatively planned to plant 70
acres Friday in Moses Lake
and 5 acres on June 6.
“If everything goes cor-
rectly, we’re planting Friday
morning,” he said. “The seeds
are en route.”
Sharp said he also has lined
up farmers to plant 30 acres of
hemp in the Tri-Cities and 10
acres in Mount Vernon.
He said he’s still lining up
financing to process hemp
into either seeds or fiber or
both, perhaps in Grant Coun-
ty.
“The processing facility is
going to happen,” Sharp said.
“We will have too much hemp
growing for us to not have a
processing facility.”
Washington will join sev-
eral other states, including
Oregon, that have hemp cul-
tivation. WSDA has taken a
cautious approach, follow-
ing the limited freedom that
the Farm Bill afforded hemp
growers and processors.
According to WSDA,
hemp growers and proces-
sors must be licensed by
the state. State lawmakers,
however, this year removed
hemp for the state’s con-
trolled substances act, cast-
ing doubt on WSDA’s ability
to enforce licensing require-
ments. WSDA subsequently
got authority from lawmak-
ers to adopt a rule allowing
it to fine unlicensed hemp
farming. The rule has yet to
be written.