SK Foods' Salyer faces class-action lawsuit
Accused of hiring illegal workers to depress wages
By LARRY PARSONS

Updated: 05/21/2009 09:08:51 AM PDT


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Lenders sue Salyer American food companyA federal judge has certified a class-action suit alleging that Monterey agribusiness executive Scott Salyer intentionally hired undocumented workers to depress wages at his tomato processing plant in Lemoore.
The ruling last week by U.S. District Court Judge Anthony Ishii in the 2006 suit by a former machinist at the tomato-processing plant came as two of Salyer's big California companies — SK Foods LP and Salyer American Fresh Foods — are dissolving under pressure from major lenders. Salyer has denied the allegation of intentionally hiring undocumented workers.

On Tuesday, a court-appointed receiver in charge of Salyer American Fresh Foods said lenders were cutting off financing for crops being grown for the company — a move that Salyer's business attorney said would shut down the company and force the layoffs of up to 1,060 seasonal and full-time employees. The Bank of the West and two other lenders demanded the receivership because they said Salyer American owed them about $34 million.

SK Foods LP, which shares corporate offices with Salyer American in Monterey's Ryan Ranch business park, filed for Chapter 11 bankruptcy protection earlier this month, and the bankruptcy trustee is soliciting potential buyers for the vegetable processor.

In the Lemoore suit, former worker Robin Brewer alleges that he and hundreds of other workers at SK Foods' plant were underpaid because of a company policy directed by Salyer to hire large numbers of undocumented workers at lower wages.
Salyer's attorneys say Salyer, the company's chief executive and owner, played no role in hiring or recruiting the hourly workers at the Lemoore plant.

"Mr. Salyer's office is located in Monterey, approximately 164 miles from the Lemoore facility," his attorney said in court papers. "He visits that facility only a few times a year."

Moreover, they said the SK Foods plant, which had about 300 hourly workers in 2006, wasn't big enough compared to other San Joaquin Valley food processors "to control wages in the area or in the food processing industry in general."

Howard Foster, a Chicago attorney for Brewer, expressed satisfaction that the judge will allow the suit to go forward on behalf of a large number of hourly workers.

Foster estimated that 20 percent of the workers at the Lemoore plant were undocumented immigrants. He said employees there were paid about 10 percent less than other people in comparable jobs.

Foster has made a name for himself bringing lawsuits under RICO — the Racketeer Influenced and Corrupt Organizations Act — against major manufacturers, accusing them of hiring illegal immigrants to trim their wage costs.

Last year, a judge threw out one of his suits against Tyson Foods, the world's largest meat processor. But Foster said he won a $1.3 million settlement in a similar suit against a Yakima, Wash., fruit company. He has other suits pending against Mohawk Industries, a Georgia carpet maker and an Alabama poultry processor.

"I have a great interest in bringing these cases," he said.

Salyer's attorney Malcolm Segal said Wednesday that the class-action certification represents "a minor skirmish."

"SK Foods had a human resources department who hired people and managers who hired people," he said. "To say a CEO of a corporation knew there was a problem — if there was a problem — is, frankly, subject to challenge."

In his ruling, the judge said certifying the class-action status of the case wasn't a test of the evidence, but a finding that if the allegations are true then a class of employees would be harmed.

"The court also recognizes that this action is one of many 'civil RICO' actions that have been filed in various federal courts across the nation, capitalizing on the popular outcry against undocumented aliens who are working openly in the United States," the judge said.

The judge said the class would include seasonal hourly workers who worked for SK Foods between June 1, 2003, and June 1, 2007.

The next step will be discovery, Segal said, in which parties seek information from the other side through documents, depositions and other means. That process could be complicated by the fact that SK Foods' business records are now held by the bankruptcy trustee, he said.


Larry Parsons can be reached at lparsons@montereyherald.com.

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