While the U.S. Federal Government has given produce significant support on the demand side, at a state level the country's food bowl is under immense pressure, not just from drought but farmworker regulations. Western Growers CEO Tom Nassif, who has represented the industry since the days of union activist Cesar Chavez, warns that greater legal burdens are driving more production across the border. The advocate has led an interesting life, and shared some of it with www.freshfruitportal.com recently from his Irvine office.
To start, what are the key issues Western Growers is dealing with at the moment?
We want to work to prevent another set of bills coming through the legislature in the new session that add additional burdens to agriculture. It appears in California that because of the makeup of the legislature, there's been a great deal of time figuring out how to redistribute the wealth between the farmers and the farmworkers, to the point where it's a very inhospitable place to live.
Does that relate to Mandatory Mediation and Conciliation (MMC)?
We fought that battle a number of years ago. We lost in the legislature because the Democrats control it and they're very supportive of anything unions want. We did get the card-check bill vetoed in California as we did on the federal level, so the workers' right to an election is still there. But there's the expansion of mandatory mediation to companies where the union has abandoned them for 20 years, and now they come back and say let's start bargaining for a contract when the workers don't know them.
There’s a case pending, the Gerawan case, that's going on and will take several months to determine, where the workers are saying they shouldn't have to bargain with United Farm Workers (UFW), and they voted to decertify them. The problem is that any time the Agricultural Labor Relations Board (ALRB) believes that the union lost an election, they won't count the votes. They will say there were too many things that the employer did which undermined the validity of the election because they had committed certain unfair labor practices, but they’re very quick to certify an election where they think it’s been won.
More so than the redistribution of wealth to workers, this sounds more like the redistribution of wealth to the union.
Well in Gerawan’s case that's what it is. Unions are going to get 3% of all those wage increases, but we have a lot of other regulations. The Labor Commissioner's recent determination that we have to pay a rest period and non-productive time at the piece rate even though they're not working, and then making it retroactive for four years and adding on penalties and punitive damages that could be in the US$3 billion range for our industry, this is the redistribution of wealth.
With so much money in question, what incentive is there for fraudulent claims?
It's the Labor Commissioner's decision that the law always was that they were due to be paid at the piece rate, it's just that nobody in the world knew about it. They actually changed the law and pretended that it was an interpretation of existing law.
There was the Labor Commission rulings and then judicial proceedings, and the judicial proceedings never said anything about paying at the average piece rate; they just said that they had to be paid separately for rest periods and non-productive time. When you set an average piece rate, you take into consideration what it's going to cost you and how many hours the people are going to be in the fields.
You calculate that they won't be working when they’re changing fields or when they take rest periods. Taking all that into consideration, you establish a piece rate. They're saying 'no, you didn't do that so now you have to pay them for all those times at an average piece rate'.
People are already being sued. Private attorneys see there's an opportunity to get attorney's fees, damages, and there's a lot of money to be made in this, so they're suing these farmers as fast as they can, getting workers to qualify as a class so they can file a class action against them. That's happening all over the state.
So on the one hand you have a Federal Government promoting fruit and vegetable consumption through campaigns like 'Let's Move!', but is that consistent with the way governments are acting on the supply side of the equation?
I think they're mutually exclusive. I don't think there's a nexus between the two. Obviously if you get people on a healthier diet it cuts down health care costs which are a cost to employers, the state, the cities and counties. That's one thing, but another thing is how you respond to the demands of the union when the union is the one who funds your election.
They're really different animals. Nobody's paying them to promote the consumption of fruits and vegetables.
On another labor-related issue, what do you think the long-term impacts will be from AB 1987, which places liabilities on farmers for violations from independent contractors they hire?
In determining whether someone is an employee or an independent contractor, the law looks at certain things. Do you provide the place to work? Do you control the hours they work, when they take their breaks, or how they do their work? The more of those things that the employer controls rather than the independent contractor, the more it looks like they're really employees.
So if you’ve got an independent contractor relationship and you start shifting some of that burden from that independent contractor onto the employer, than you start chipping into the fact that by legal definition that person is an independent contractor, and then you’ve lost the ability to go outside to hire people; you have to put them on your payroll. That’s the road down which it moves.
A lot of people are saying we might as well just put them on our payroll, instead of paying a middleman who’s going to up charge them for everything he provides.
Then you've got to do all the recruiting. You've got to have people going to a foreign country and getting all the paperwork done to get them in on an H2A program. Under the legislation you aren’t responsible for health care, but who knows if that isn't the next step.
Regarding foreign workers, how do you feel about the state of immigration reform
It's going nowhere, that's the problem. We negotiated a Senate bill - I was one of the negotiators - but we obviously didn’t get anything out of the house.
The unions are interested in immigration reform but mostly for the protection of existing workers. They're not so interested in guest workers; in fact, they’d rather not have guest workers, because they think they compete with the U.S. workers and therefore drive down the rates because you have a more plentiful supply of labor.
It's very important for us because if you have immigration reform, you’re eventually going to have people who are citizens or have a right to work in other industries, and eventually you're going to be relying all on guest workers because agriculture is not going to be the chosen occupation if they can work in any field they want.
They only way we can do it now is under existing federal law and the labor code section is called H2A; that's where we get the agricultural workers. It's unworkable, and they make it very complicated. It's administered by the Department of Labor who doesn’t like it. They won't answer the phone to answer questions because they say they don’t have sufficient manpower.
Oft times when they do give workers the visas to come and work, it's after the harvest has begun. You need it on a timely basis and we’re not growing widgets here, we’re growing perishable crops. We can't just store them like we do potatoes and carrots. A head of lettuce is going to go bad on you in a short period of time if it isn’t harvested, and people want something that's fresh.
In some countries like Australia and New Zealand, the farming business model is based on enticing younger people to work on farms, often as a tourism experience for foreign backpackers. Could something similar be done in California?
We want them to work, we’ve tried to encourage them, getting high school students and football players to come out for the summer, but they won’t do it. They won't do it for any price, they don't like the labor. It's hard work and that's not what they're into - they think they're above farm work; they go to school, get an education, they're not raised to be farmworkers and there are opportunities.
What are some other key trends you see in the industry?
I think to the extent that we continue to have labor shortages, we're going to see people getting into less labor-intensive crops. There are a lot of safer crops they can farm. Fruits and vegetables are high-value crops so you have to invest a fair bit of money before you can get a return, and if you don’t have the labor to harvest those crops the losses are unbearable.
Also, they're working with technological innovators to find mechanical ways of thinning, harvesting, doing the operations in produce so that they don't have to rely on a migrant workforce.
For raisins, tree fruit and tree nuts, a lot of that is mechanically harvested. You've had carrot diggers a long time as it's not exactly a fragile crop. There is also so much leafy green produce in California that a lot of the innovations are going towards the mechanical harvesting of lettuce and other leafy green products.
Speaking of leafy greens, a lot of supermarkets on the East Coast are setting up programs with urban farming companies focused on the 'local' movement. Do you see that as much of a threat to salad growers here?
I think the demand for food is going to so far outstrip the supply of food that nobody is going to be threatened by that. The threat is a lack of natural resources like water, a lack of labor, or such regulation that it’s impossible to produce here, and all of our production goes abroad.
Almost everybody who’s expanding is expanding overseas. So we're helping foreign economies to provide jobs instead of doing it here in the United States. It's happening in Mexico and has been for years, and it's in South America too in places like Chile and Argentina, and in Central America.
How do farmers feel about that?
Obviously the more they can do in the United States, the better, but they have to be able to provide water and labor, and have friendly governments. They don't find them in this country so they have to go abroad where they're welcomed with open arms.
And how would you compare California Governor Jerry Brown's approach to agriculture compared to his predecessor, Arnold Schwarzenegger?
Schwarzenegger was very friendly to agriculture, but also sympathized with the unions. I would say for agriculture he was a fairly good governor. Governor Brown has turned out to be fairly pragmatic and he understands that we have to survive too in agriculture, and that we can't be overregulated, but he's always had a heart for the farmworker so he's going to help them where he can.
But he doesn’t just blanket sign bills that come up that are anti-ag or pro-union because that’s what the union wants. There has to be a reason for it.
I guess that was shown in the blocking of SB 25, which would have given even greater power to the ALRB in enforcing labor contracts.
SB25 wasn’t necessary. It didn't address a lot of the issues. There's a report on why he vetoed the legislation in which he talked about the need to do more than that particular law would cover, and also include elections to make sure votes were counted; a far more balanced approach.
On a more personal note, what is your background in farming?
I'm not a farmer, I’ve never been a farmer, but I’ve owned farmland before. I was an agricultural labor relations lawyer in my first occupation so I’m very familiar with what goes on in agriculture. I’ve been representing farmers against the unions since I graduated just about.
It was when Cesar Chavez was around. He was the guy across the table when I was first practicing the law.
I've seen the recent film about him, but that was probably just one side of the story.
You won't hear the other side. Cesar Chavez was a nice man – he wasn't a pounder, a yeller or a screamer. I think he truly believed in what he was doing but times were different and the unions’ attitude was the ends justify the means, so we would accuse the unions of violence and they would say, 'if that’s what we have to do, that’s what we have to do because in the end these workers need representation'.
When they first got their contracts and they had strikes, there wasn't any violence. We had elections, we had contracts, and we lived happily ever after with the union, but when the re-negotiations came up they wanted to exert more control over the workforce rather than having the company have control. They wanted to get the wages up really high so they can go to Texas and Florida and say, 'look what we did in California, we can do the same thing for you'.
We were never accused of violence. There was never an unfair labor practice charge filed against a farmer for violence. There was never a case under the Agricultural Labor Relations Act or in the courts against a farmer for violence, but there were several against the union for violence, and we won every one of them.
What type of violence occurred?
They went out into the fields and would physically attack farmworkers. They'd follow workers who wouldn't strike to their homes or to bars, they'd burn their cars, they’d beat them, destroy tractors, set them on fire. They'd set fire to police cars, turn them over.
When we sued them and we won, it pretty much took all the money they had out of them so they disappeared for a long time. That's why you didn’t see the union for a long time, because they kept getting sued for violence and they kept losing. This was probably between 1979-81.
Our firm represented Carl Maggio of Maggio Farms. The union had to pay several millions of dollars, plus they took it up on appeal and lost on appeal they had interest on all that money. I think it'd be about US$4 million in total.
At times like those did you ever think, 'this isn't the industry for me, it’s too dangerous'?
No. I'm a fighter, I'm an advocate, so I don't shy away from things like that. What bothered me in wondering why I was continuing to practice law was the fact that every time we had a hearing before the Agricultural Labor Relations Board, regardless of how meritorious our case was, they'd rule against us.
And every time we filed an unfair labor practice charge against the union, they denied each and every one of them. They never granted one unfair labor practice against the union, and they granted every unfair labor practice against the farmers, and we would have to go to a civil court to get justice; many times to the California Supreme Court to get justice.
And it was there that justice was given?
Yes, but it’s such an expensive and long process, and it’s so frustrating to listen to these people who are the hearing officers and the ALRB attorneys, and all they cared about was winning for the farmworker whether they were right or wrong.
So it's almost a case of being guilty until proven innocent?
Absolutely, and they don't want you to be proven innocent. They don't even think that's part of the deal. It's just a question of prosecuting you and getting you to pay damages, or agree to certain terms. That's what disappointed me as an attorney. Do I want to deal with a corrupt organization?
But sometimes it's the struggle that keeps you going.
I had an unusual opportunity offered to me by the Reagan administration to come work for the president. If I hadn't done that I would have continued working for the farmers.
How long did you work for the administration, and what did you do there?
Eight years. I was five years in D.C. and three years in Morocco. I went to work for the president as Deputy Chief of Protocol for the White House. Whenever there was a foreign visitor we would arrange all the meetings, all the security between the Secret Service and the foreign secret service, wherever their protection agency was.
The president would invite them to spend a couple of days in Washington D.C., I'd take them over the country around different states, to meet the leaders of the states.
I became Chief of Protocol when my chief resigned, and then I was acting until they brought in a new chief and I became Deputy Assistant Secretary of State for Near East and South Asian Affairs. As we used to say, 'everything from Marrakesh to Bangladesh'; all of North Africa, Egypt, Israel, India, Pakistan, Iran, anywhere there's trouble. That was my beat.
So I imagine that made a couple of burning cars in a field seem not so scary?
I got involved in a lot of the Libyan affairs. When Western Growers hired me they said, 'well if he can handle the Libyans he can handle some farmers', and I said 'I'm not so sure that's true’.
Then I was in Morocco as the U.S. Ambassador for three years. There was a lot of agriculture there actually. We had big programs – we had a lot of advisors to help them be self-sufficient in agriculture, and actually produce crops for export, because they were a natural for the European market.
Do you think your Lebanese origins had anything to do with why you were selected for roles dealing with the Middle East?
Yes. The peace process is something I wanted to work on, trying to bring peace to the region.
But your job today involves a lot of fights. Which do you think is the toughest?
The real fighting is more in the labor arena and on the immigration side. For water it’s more about trying to get people to be reasonable about legislation and the environment, how you increase or better utilize the existing natural resources that we have. It’s a terrible and serious problem for us, but I don’t consider that so much a fight, although we are at odds with the environmentalists over these issues.
The unions cannot organize farmworkers without the government doing it for them. The government has to keep changing the rules so that the union doesn’t have to do anything. If that were not true, they would represent more than a few thousand people out of 400,000-500,000 we have here in California.
There has been a legitimate and utter failure of the unions to be able to organize workers. Our farmers are well-educated, they don't mistreat their workers. It's not the old south centuries ago, it's not even old California centuries ago. There are plenty of state laws, federal laws and other regulations that ensure workers are protected, and employers see workers as the most important asset in their company so they want to take care of them.
What are some other key talking points for the produce sector?
It's about trying to get food safety to be a priority, not just for the producers but for the people who buy at retail. They’ve got to be able to handle it in a safe manner and make sure that when they put stuff in a box that it's safe. The bigger stores are trying to impose what they call sustainability standards, which include things like wages and hours, and from my perspective that’s none of their business.
We’ve got plenty of state laws and unions that protect the workers – we don’t need grocery stores, just because they’re big buyers, to tell us how much we should pay, coming out to interview our employees to see if we’re treating them right.
There are plenty of people who do that on a regular basis, who are in government and are authorized to do so, but we see that movement more and more. Most of it came out of Europe.
Another big trend in Europe is the focus on maximum pesticide residue limits. How much of an issue is that in the United States?
I just met with the FDA (Food and Drug Administration) and I asked if there is any danger in people talking about the difference between organic and conventional. They said 'no' - neither one is more dangerous than the other, neither one is more nutritious; they're both nutritious and healthy.
It's an idea that consumers have because that's what environmentalists and the organic folks shove down their throat. That's not a fact, there's no basis in science.
On that note, does Western Growers have organic farmers as members?
Absolutely. We represent around 30% of all the organics in the country. We don't care whether they're organic or conventional, as long as it's fresh produce. That's going to give people better health.
And how many members do you have in total?
About 2,500 individual companies. Our members produce about half the fresh produce in the country.
Do you see that membership base growing?
No, because there’s so much consolidation - the more regulations, the less likely the small guys can exist, they get absorbed by the bigger companies. People complain about big ag and corporate ag, but the government forces that to happen. They're killing the little guy and only the big guy can afford it.