Since the start of the year, dairy farms in the state have been required to pay their employees overtime after the state Supreme Court ruled in November that dairy workers should receive overtime pay if they work more than 40 hours a week.
Two Skagit County dairy farmers say they have adjusted to the new overtime pay requirement, but are concerned about an issue the court did not address — whether dairy farms can be sued for three years of retroactive overtime pay.
“Every farm I’ve talked to, they’re nervous about that,” said Jason Vander Kooy, owner of Harmony Dairy west of Mount Vernon.
According to the Washington State Dairy Federation, at least 25 lawsuits seeking retroactive overtime pay have been filed against farmers since the start of the year. There are no known lawsuits against farmers in Skagit County.
State legislation has been proposed to protect farmers from retroactive pay lawsuits, though so far, efforts to advance such legislation have stalled.
At a Jan. 28 hearing on one bill, Scott Dilley with the dairy federation testified that the state’s dairy farms stand to lose between $90 million and $120 million if retroactive pay lawsuits are allowed.
Vander Kooy said farmers facing the threat of litigation are worried about their survival.
“Some farms won’t be able to come up with the money, so they’ll go out of business,” he said.
Most agricultural workers have long been exempt from overtime pay requirements under the state’s Minimum Wage Act.
But on Nov. 5, the state Supreme Court ruled 5-4 that the exemption was unconstitutional in a case involving dairy workers. The court did not rule on the question of retroactivity.
Farmers and farm advocacy groups say retroactive pay lawsuits unfairly punish farmers for following the law at the time.
“It’s like changing the speed limit and charging speed limit tickets for the last three years,” said Dwayne Faber, a dairy farmer northeast of Mount Vernon.
Time is running out for the state Legislature to address the issue this session, with a Monday deadline looming to pass bills out of its policy committees.
A bill sponsored by state Sen. Curtis King, R-Yakima, and seven other Republicans would prohibit courts from awarding retroactive pay in some overtime claims cases. At the Jan. 28 public hearing on the bill before the Senate Labor, Commerce and Tribal Affairs Committee, King said the issue is a matter of fairness.
“(Dairy farmers) operated the last three years under the laws that were there and the interpretation of those laws,” he said. “Now they’re saying you’ve got to go back three years and pay overtime pay.”
The online hearing drew more than 1,000, with 554 signed in to support the bill and 501 opposed. More than 150 signed up to testify.
Opponents of the bill stated that farmworkers have been unfairly deprived of overtime pay for decades because of the state’s longstanding exemption for agricultural workers.
“Three years of overtime premiums pales in comparison to this massive and systemic wrong,” said Andrea Schmidt, an attorney who represented dairy workers in the overtime pay case before the state Supreme Court.
Ramon Torres, a farmworker and representative of Burlington-based farmworker union Familias Unidas por la Justicia, also testified against the bill.
“We are against this bill because more than anything it deprives us of our dignity,” he said through an interpreter. “For more than 60 years, because of laws like this, we have been denied these rights.”
The Republican-sponsored bill and its House companion bill have gone nowhere. On Wednesday, state Rep. Sharon Shewmake, D-Whatcom County, introduced a different bill to try to get the ball rolling again.
Her bill would protect dairy farmers from retroactive pay lawsuits, but with a caveat. An agricultural labor work group must first convene and reach an agreement on “agricultural labor issues and specifically related to creating safer working conditions and a living wage for agricultural workers.”
Shewmake said she sympathizes with dairy farmers worried about having to pay three years of overtime pay they didn’t know they owed. However, the Republican bills don’t promote equity, which is a focus for Democrats this session, she said.
”The idea is to turn this into a broader discussion of agricultural labor and allow workers to have a broader voice,” she said.
The dairy federation did not return request for comment on Shewmake’s bill by the newspaper’s deadline.
Long before the worry over overtime pay lawsuits, dairies have been struggling due to low milk prices. Vander Kooy said milk prices have been $15 per hundredweight over the past three months, three dollars below what it costs the farm to produce the milk.
“We’ve already lost four or five dairy farms in our county (this year) just because it’s not fun anymore and you can’t make money at it,” he said.
Faber said dairy farmers in the state are paying more for labor than their counterparts in other states, yet receive no more money for their milk.
“The overtime (pay) is manageable, we’ve found ways to make that work, and like most dairies, we’re not opposed to overtime,” he said. “The frustrating part is that we have higher input costs than other parts of the country. You’re going to get agriculture that moves out of Washington state because it’s not as competitive as states like Idaho or South Dakota.”
The biggest concern is the issue of retroactivity. Faber said he doubts his farm could survive paying three years of overtime pay plus legal fees.
”To go and sue somebody for following the rules as they were written on the books, there is something inherently wrong and evil about that,” he said.
Ultimately, Vander Kooy said farmers would like to be left alone to farm.
”It’s been rough for a number of years, and the stress load is pretty high right now,” he said. “It would just be nice to get a break. ‘You know what guys? You can farm. No lawyers are going to bother you.’”