Washington Mushroom Farm Ordered to Pay Back Wages to Immigrant Farmworkers

The U.S. Department of Labor has determined that Ostrom Mushroom Farms owes $74,000 in penalties and $54,000 in back wages for failing to pay the required wage rate to 62 foreign H-2A farmworkers and depriving them of cooking facilities and meals.

The Washington farm placed arriving workers in a hotel, rather than the housing it listed in the job order, the DOL said in a statement Thursday. The hotel lacked cooking facilities, and Ostrom did not provide meals, leaving the workers to fend for themselves and buy their own daily meals, according to DOL.

The penalties come less than three months after the farm agreed to pay $3.4 million to settle claims from Washington state Attorney General Bob Ferguson, who accused the farm in an August 2022 lawsuit of firing female workers from the U.S. and replacing them with male workers from other countries through the H-2A Temporary Agricultural Program, which allows U.S. employers facing a shortage of domestic workers to bring in seasonal agricultural workers from other countries who must continue to work for the employer if they wish to stay in the U.S.

The DOL's wage and hour division said Thursday it hit the farm with $70,000 in penalties "due to the violations' seriousness." More than $4,000 in additional penalties were tacked on because Ostrom did not get housing inspected before the workers arrived, it failed to keep accurate records and did not include all necessary information on paystubs. Additionally, one worker paid roughly $10,000 to a recruiter for a visa, DOL said.

Thomas Silva, who directs the department's wage and hour division in Seattle, Washington, said in a statement that the U.S. is dependent on agricultural workers to put food on families' tables, and the DOL is committed to ensuring industry employers live up to their legal obligations.

"Employers participating in the H-2A guest worker program must make sure that they provide housing as required, that housing is sanitary, that vehicles used to transport workers are safe and that workers are paid correctly for all hours they work," Silva said.

According to a consent decree in the Washington state litigation, Ostrom sold its business in February to Greenwood Mushroom Sunnyside IA LLC, and said it was winding up its business.

Ragan Powers with Davis Wright Tremaine LLP, who represents Ostrom, told Law360 on Friday that Sunnyside's new owner is well positioned for continued success and growth, while hundreds of local jobs have been secured in the community.

"Our investment in state-of-the-art facilities and in a dedicated local workforce over the past four years helped solidify the production of high-quality mushrooms as a valuable economic driver in this region," Powers said.

According to Ferguson's suit, Ostrom laid off 79% of its U.S.-based workforce — many of whom had spent years working on the farm — in order to qualify for the H-2A program beginning in January 2021.

Around the same time, an Ostrom manager posted to a Facebook group for Yakima, Washington, agricultural workers seeking "only males" to apply for its impending harvest season, the complaint had said.

Ostrom ultimately hired 65 mostly male workers under the H-2A system and only four female workers and 18 male workers who were based in the U.S., according to the complaint, which said there were dozens of Washington residents who were willing to work at the farm. However, Ostrom discouraged domestic workers from applying by misrepresenting the required qualifications for the job, according to the now-settled suit.

Instead, the farm turned down multiple domestic applicants in favor of foreign workers with no agricultural experience, and some U.S. workers were also paid less than the H-2A workers, receiving an average of $14 an hour while foreign recruits were paid $17.41 an hour, the attorney general had said.

The $3.4 million settlement was doled out to the domestic workers who the farm fired between January 2021 and December 2022, according to a consent decree in the case.