Special Comment on the Florida Legal Services Lawsuit

Many of you may have already read coverage of a lawsuit filed this week in Miami against Burger King involving questions around the payment of penny-per-pound funds to farmworkers. If not, here is an example of the coverage.

It’s hard to figure out where Florida Legal Services could possibly be coming from with this lawsuit. But we do know this, it’s not coming from any basis in fact.

Their sole claim is that the money accumulated during the time the growers refused to participate in the penny-per-pound program was never paid to workers. From the Ft. Myers News-Press:

“… But the money for the three harvest seasons was never paid, and no one will tell him where it is, said the plaintiffs’ attorney, Greg Schell of the Migrant Farmworker Justice Project…

‘The concern is, why has nobody paid this money, and we haven’t been able to get a good answer,’ Schell said. ‘The growers are willing to pay the money if somebody gives it to them. The fast food companies have been uncommunicative with us.'”

The Florida Legal Services attorney repeated his claim to the Naples Daily News:

“It wasn’t paid,” he said. “I promise you.”

The problem with that claim is that it is dead wrong, and demonstrably wrong.

Easily verifiable

The money was paid to workers as a line item bonus this past season, the very first season after the growers agreed to participate in the penny-per-pound program last November.

Verite, the independent third-party monitoring the agreements this past season, can verify that. All the attorneys and accountants of the major fast-food companies that paid the money to the growers can verify that. All the attorneys and accountants of the tomato growers that passed the money on to the workers can verify that. And thousands of farmworkers who received the bonus payments can verify that.

And here, below, with your own eyes, you can verify it, too:

Above, a receipt from a Pacific worker from the last week of April of this year shows, in clearly labeled, separate line items, the bonuses paid from the Subway and McDonald’s accumulated, or “escrow”, funds (labeled “Subway’s FFP” and “McDonald’s FFP”) supplementing the regular penny-per-pound payment for current purchases, labeled “Fair Food Payt.” Any payments from Burger King’s accumulated funds would be included in the “Fair Food Payt.” line.

In short, the accumulated money was paid by the restaurant companies and distributed — to farmworkers, through the growers — just as intended and agreed upon. If that weren’t the case, we’d be the ones suing.

And, what’s more, Florida Legal Services was informed of that reality several months before it nonetheless decided to file the suit. Twice. From a letter to Mr. Schell, from the CIW’s attorney, dated May 9th, 2011:

“… As you know, during the current tomato season the FTGE and its members had a change of heart and agreed to participate in the CIW’s Fair Food Program. Implementation of the Fair Food Premium bonus system is part of the agreement with the FTGE and its members. As a result, Six L’s and Pacific again, and other tomato growers for the first time, have agreed to offer a bonus to qualifying workers. All of the money that has or would have been paid as a Fair Food Premium by participating purchasers since signing their agreements with the CIW (except for that from Yum Brands) is being paid to growers to fund the new bonus system. None of that money is being retained by any of the participating purchasers, including Yum Brands.” (emphasis added)

And again, in a second letter, from May 26, 2011:

“… I am pleased that my last letter provided you with more insight into the operation of the Fair Food Program, but your most recent letter suggests that your understanding remains incomplete. Perhaps that is because you continue to operate from faulty factual premises, so I will try to address some of those in this response…

… once the FTGE had its change of heart, those amounts [the penny-per-pound funds accumulated during the period the growers refused to participate], in addition to the amounts for current purchases, began to be paid out to current workers pursuant to a formula contained in the Fair Food agreements.” (emphasis added)

Sowing confusion

Our concern, however, is not with the lawsuit itself or its eventual outcome, but with the confusion it will create in the meantime.

This is a crucial moment in the Campaign for Fair Food. With nine multi-billion dollar retail food companies and the entire Florida tomato industry now on board, farmworkers in Florida are finally seeing the light of a new day dawning in the fields, with the beginnings of a better wage and a more modern work environment, including new protections, the right to complain without fear of retaliation, and a voice on the job.

It is still early in that new day, however, and the light is still dim. For the bonuses to grow, and the new protections to gain a strong and abiding foothold in the industry, more retail food companies, including the supermarket industry, must also do their part. But the fog of baseless claims contained in Florida Legal Services’ lawsuit could provide yet another excuse for those companies to continue their resistance to the Campaign for Fair Food.

And that would make the lawsuit as tragic as it is misguided.

Bonuses are not “back pay”

There is one more point that needs to be made.

Many of the articles that have come out about the lawsuit frame the story in terms of workers’ “back pay.” That is a misconception that is a perfect example of the kind of confusion a groundless and irresponsible law suit can cause.

The funds generated and passed on to workers through the Fair Food Program have always, from day one, been a bonus to supplement the workers’ pay, not the pay itself. As the CIW’s lawyer told Florida Legal Services well before they filed this suit:

“Indeed, it is very important to almost all the participating buyers that the additional money they agreed to pay for Florida tomatoes be treated as a Fair Food premium (akin to a fair trade premium) and not as salary…” (May 9th letter to Greg Schell)

As evidence of this concern, when YUM Brands first started its payments back in 2005, it actually paid the bonus through a separate check to each worker. That cumbersome mechanism has now been replaced by a separate line item on each worker’s check (see above), but the bonus nature of the payments has never changed.

When the members of the Florida Tomato Growers Exchange decided in 2007 not to participate in the Fair Food Program, the fast-food companies agreed to calculate and set aside the amount of the price premium they would have paid if the Program had been operative. For YUM and McDonald’s, both of which signed agreements when FTGE members were still participating in the Fair Food Program, the decision to set aside the price premium amount was an entirely voluntary show of good faith, as their agreements did not address that issue at all. For the other companies, the agreements specified how to account for the money that would have paid if the growers were participating, and how to pay that money out, prospectively to workers then in the workforce, once the growers resumed participation.

Why did we do it that way? Because it was by far the fairest and most efficient approach.

No one knew at the time of the agreements whether the growers’ refusal to participate would last 3 months, 3 years, or 30 years. Given the migrant nature of the work force, the astronomical turnover in the fields (it is estimated that a single picking “position” is occupied by at least 3 different individuals every 8-month season), and the money that would inevitably be wasted attempting to locate long-gone workers (mostly without success), any effort at retroactive distribution would have made no sense at all.

And so, it was agreed that the accumulated money would be distributed, in the form of a bonus, to the workers in the industry at the time the growers ultimately relented, and that is exactly what was done. Together, the penny-per-pound based on current purchases (during the 2010-11 season) and the funds that had accumulated during the growers’ resistance, were paid to supplement the workers’ regular picking wages, giving the workers an additional bump until the accumulated funds were fully drawn down.

Looking back, given that the growers’ resistance lasted the better part of three years, the agreement to distribute the bonus prospectively was a wise one. By distributing the bonus funds to workers in the fields today, the agreed upon money has gone to workers in its entirety, through current payroll, at no additional cost and without delay.

On the other hand, if we had agreed that the accumulated funds would be paid backward, as Florida Legal Services seems to prefer, most of the workers would never be found (as they will have moved on to other employment or back to their home countries), much less get any money. Paralegals and lawyers, on the other hand, would get paid for doing the search for qualified workers, which could take years. This may make sense for lawyers and paralegals, but it doesn’t make any sense for the workers.

[Furthermore, the information necessary to equitably distribute the funds among the tens of thousands of workers — the amounts per worker vary according the amount of tomatoes each participating retailer bought from each grower, and when those purchases took place — was not collected during the period of the growers’ resistance and to do so retrospectively would be at best a herculean, if not impossible, task, given the multi-level structure of the tomato supply chain and the growers’ refusal to participate.]

So, to summarize:

Paying it forward: Every penny of the money gets to the workers, at no additional cost, and with no delay.

Paying it backward: Only a small percentage (typically well less than half) of the money ever gets to the intended workers, and the search for workers is costly and time consuming. Record keeping for the past time period is effectively non-existent.

Which approach would you choose if you had to decide? We think the choice is an easy one, which is why our agreements on the escrow funds require what they do.

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