Washington State Supreme Court
The question of fairness was at the center of a hearing Thursday on a Washington Senate bill that would limit the ability of courts to award retroactive pay to workers.
Senate Bill 5172, sponsored by Sen. Curtis King of Yakima, seeks to prohibit a court from ordering retroactive pay in overtime wage claims if it creates a "substantially inequitable result." The bill went before the Senate's Labor, Commerce & Tribal Affairs Committee Thursday.
The bill comes several months after the Washington Supreme Court ruled an exemption on overtime pay for dairy workers that dates back more than six decades was unconstitutional.
However, the November ruling did not address several questions, including whether those workers should receive upwards of three years of retroactive overtime pay as outlined in state law.
Attorneys have sought to answer that question through several class-action lawsuits against dairies across the state.
Those in the dairy industry and the agricultural sector say placing retroactive liability on dairy growers creates "a substantially inequitable result," as they were following the law as interpreted.
"They did everything they were supposed to do and did it fairly, correctly and honestly," King said during the public hearing with the state Senate's Labor, Commerce & Tribal Affairs Committee. "Now, because there has been a (new) interpretation, you have to go back. That's not fair; that's not equitable."
The hearing generated nearly even support, with testimony for and against the bill's passage.
Those in the agriculture industry maintain that they are not looking to use the bill to overturn the Washington Supreme Court ruling but rather address the retroactive overtime pay issue.
Agricultural employers argue that allowing such litigation to proceed would virtually wipe out small farms.
Scott Dilley, communications director and labor policy expert for the Washington State Dairy Federation, a trade organization, estimates that dairy growers in Washington state could pay between $90 million to $120 million if legal battles for back pay are successful.
Individual farmers who spoke say they could end up paying hundreds of thousands in back wages, and perhaps millions.
"It's not fair that we follow the law, and now we're supposed to go back and pay almost a million in overtime," said Jason Sheehan, a Sunnyside dairy owner.
Several other dairy farmers who were served with lawsuits said they did not have the means to pay three years' worth of overtime wages.
Fransisca VanderMeulen, a Grandview dairy farmer, said her farm was served three lawsuits that could potentially cost upward of $10 million and put the business in jeopardy.
"If our family farm cannot survive, I know other farms will be wiped out," she said.
Farmworker advocates, employment attorneys and others who oppose the bill saw the issue of fairness differently. They argue that farmworkers were owed the money in the first place and didn't receive it due to the flawed law.
"The exemption from overtime was unconstitutional because it granted a special privilege to the industry." said Andrea Schmitt, staff attorney for Columbia Legal Services, which represented the dairy workers in the original 2016 lawsuit. In 2017, Yakima County Superior Court issued a $600,000 settlement in response to the workers' claims but referred the overtime question to the Washington Supreme Court.
Elizabeth Strater, strategic campaigns director for United Farm Workers, used Dilley's figure to argue against the bill.
"They're saying $120 million has been withheld from dairy workers," she said. "(Workers are) already going without a lot of things."
The bill also generated interest from those outside the agriculture industry. While the bill stemmed from a Washington Supreme Court ruling concerning dairy workers, it did not limit the provision to dairy or even agricultural workers, meaning that it could extend to other sectors where workers are exempt from overtime.
Bob Battles, general counsel and government affairs director for the Association of Washington Business, a statewide business group, said that the concern regarding retroactive pay applies across several industries, not just agriculture.
Employers of other industries could find themselves in a similar position, he said.
"This wasn't a violation of overtime," he said. "Farmers were required to pay what they were asked."
Toby Marshall, a Seattle attorney speaking on behalf of the Washington Employment Lawyers Association, said the bill would provide a path for employers to avoid paying back wages in any case.
He urged legislators to allow the courts to address the issue.
"A violation of the law is still a violation even if the wrongdoer makes a reasonable argument in its defense," he said.
Reach Mai Hoang at maihoang@yakimaherald.com or Twitter @maiphoang
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