There's trouble at the world's largest chicken ranch, and lots of feathers are flying.
On one side is Richard Carrott, a 37-year-old former television actor and owner of the Egg City ranch in Ventura County. Carrott, who a few years ago chased Space Age hoodlums while playing Cadet Captain Chris Gentry on the Saturday morning television show "Space Academy," believes that he is being portrayed unfairly as the heavy in the labor dispute at the 300-acre ranch near Moorpark.
Egg City this month filed for protection from its creditors under Chapter 11 of the U.S. Bankruptcy Code, and Carrott insists that he must slash wages by as much as one-third to stay in business.
On the other side are about 240 workers, most of whom make $6.07 to $7.69 an hour taking care of the ranch's 3 million hens and processing the more than 2 million eggs produced daily.
Productivity Demands, Work Conditions Challenged
The employees and their union, the United Farm Workers, claim that Egg City hasn't negotiated fairly in the eight months since their last contract expired, and they charge that the ranch is trying to oust the union. They also accuse Egg City of imposing stiff productivity demands and unfair working conditions such as limiting employees to one trip to the restroom every two hours.
The conflict is attracting widespread attention among California farmers. Labor law experts say Egg City could become the first farm employer in California to use the bankruptcy courts to challenge its labor contract obligations. The ranch has said that if the UFW rejects its bid to reduce wages by $2 an hour, it will ask the bankruptcy court to approve wage cuts, although some legal experts say the move is unnecessary.
The Egg City dispute also represents a major challenge for Cesar Chavez's already troubled union, which is suffering from a lack of new members and increasingly combative growers who have drawn support from the state Agricultural Labor Relations Board. ALRB officials said they believe that Egg City, California's only unionized egg ranch, has the largest unit of UFW-represented workers employed year-round in California.
In the 1970s, Egg City was the site of one of the UFW's biggest victories in its bitter struggle with the Teamsters Union over the right to represent California farm workers. The UFW prevailed in 1978 after three years of court fights and elections, including one marred by stolen ballots.
Founded in 1961 by Julius Goldman, who fled Germany during the Nazi holocaust, the ranch quickly grew into the nation's premier producer. Arnold Kupetz, Egg City's bankruptcy lawyer, said the ranch expects sales this year of about $45 million.
Quit Acting Career
Goldman sold the business over several years in the 1970s to Cincinnati-based Kroger, the big supermarket chain. Kroger, in turn, sold the ranch in May, 1985, for an undisclosed price to Carrott. The ranch's formal name now is Careau Group, Kupetz said, and Carrott is its only shareholder.
A native of Indianapolis, Carrott decided several years ago to quit a struggling acting career that included bit parts on the television shows "Love Boat" and "Three's Company" to go into the egg business. He said he made the decision after listening to a dinner conversation between his father-in-law, an egg industry executive, and a pet food company official who used flawed eggs that people wouldn't buy.
Carrott said Kroger was losing about $500,000 a month operating Egg City when he bought it. Those losses have been cut but still amounted to $1.85 million during the six months ended last March, according to Kupetz. In its bankruptcy petition, the company listed liabilities of $24.1 million against assets of $21.5 million.
Egg City still owes Kroger, one of its three secured creditors, about $8 million. The other two secured creditors are CoastFed, a Los Angeles commercial finance company that also is owed about $8 million, and Okura, a Japanese trading firm whose $1-million debt is collateralized by nearly 400,000 chickens.
Carrott blames the ranch's losses largely on its labor costs, which he claims are 30% to 50% higher than those of his competitors, all of which are non-union. He won't disclose his labor expenses, but university studies show that California egg producers last year spent an average of 7.5 cents on labor to produce, package and ship a dozen eggs.
In addition to seeking a wage reduction, Carrott also wants concessions such as a temporary elimination of the practice of giving workers five dozen free eggs every two weeks.
Wants Financial Data
The UFW doesn't deny that Egg City has financial problems, but it accuses the company of withholding key financial information from workers, making it difficult for union leaders to evaluate the proposed concessions.