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Regulators Picking on Blueberry Growers

Government regulations criminalize all kinds of rational, productive, and honest business activity. As bad as this is, the non-objective nature of the regulatory state and the wide powers its enforcers wield can enable regulators to get away with extorting large sums from honest producers even when there is no clear wrongdoing according to their own rules.

A recent editorial in the Wall Street Journal highlights a shocking example of this. In 2012, officials from the Department of Labor’s Wage and Hour Division visited three Oregon berry growers — Pan-American Berry Growers, B&G Ditchen and E&S Farms — for spot inspections. They then accused the business owners of violating minimum wage laws according to their “calculations,” without providing any specific evidence of an infraction, and demanded that they fork over a large sum of money or have their operations shut down:

[T]he Labor Department’s Wage and Hour division district director, Jeff Genkos, accused the growers of minimum-wage violations and declared the blueberries “hot goods” under the 1938 Fair Labor Standards Act. . . . The effect was to stop the fruit from being shipped to customers. He then ordered the growers to pay back wages and penalties and asked them to sign away any right to appeal the deal. . . .

This put the growers in an impossible spot. Either they could collectively pay $240,435 or let millions of dollars’ worth of berries rot. And they only had a day or two to make a decision. They did what any prudent employer would do: They paid the money, and the hot goods order was lifted.

So the growers were strong-armed into handing over a substantial sum of money even though they weren’t breaking any laws to their knowledge. Upon further investigation, they later confirmed that they didn’t do anything wrong:

Over the next year, the owners tried to get access to the basis for Labor’s calculations about their workplaces by filing Freedom of Information Act requests and rallying a bipartisan group of Congressmen to petition the department for more information. It turns out that Labor’s bureaucrats had divined that the average worker could only pick around 60 pounds of blueberries an hour, some 30 pounds below what workers usually pick. They then counted the number of workers employed and concluded the growers must have had workers employed off the books.

Evidently, their only “crime” was being too good at picking blueberries. You can read the whole editorial here.