Egg City, a huge Ventura County chicken ranch operating under bankruptcy court protection amid a bitter labor dispute, said Wednesday that it has cut the wages of its 240 hourly workers by $2 an hour.
A temporary wage reduction was approved by U.S. Bankruptcy Judge Calvin K. Ashland after Egg City lawyers argued that the chicken ranch, the world's largest, needed to cut its payroll to turn around financially. The rollback, lowering the affected employees' pay to between $4.07 and $5.69 an hour, is retroactive to June 1 and will show up in workers' checks on Friday.
Egg City's move heightened tensions at the ranch between management and hourly employees, who are represented by Cesar Chavez's United Farm Workers. Union officials have vowed to fight the wage cut.
"It's our feeling that they are trying to break the union. This is just the first step," said Dean Beer, a UFW lawyer.
UFW officials have said they would consider the various concessions that Egg City claims it needs to stay in business if management would fully disclose the ranch's finances. Egg City counters that it has given the union enough information to make a decision.
Labor and bankruptcy law experts have questioned whether Egg City needed bankruptcy court approval to cut wages because the ranch's most recent union contract expired in September. They say that a company with an expired union contract can normally, under state or federal laws, implement its last offer once negotiations reach an impasse.
But Arnold Kupetz, Egg City's bankruptcy lawyer, said the ranch wanted a judge's approval to bolster its legal position should the union ever raise charges of unfair labor practices. He said Egg City lawyers believe that they may be in a "gray area" because California farm workers are governed by the state's farm labor laws rather than by federal labor laws.
The bankruptcy judge is expected to schedule another hearing within 60 days to rule on whether the wage cut should be permanent. Egg City listed $24.1 million in liabilities and $21.5 million in assets when it filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code on May 9.
The ranch, founded in 1961 by Julius Goldman and located north of Moorpark, projects revenue of $45 million this year.