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California and the West

Suit Targets Hiring of Illegal Farmworkers

A Santa Monica temp agency alleges a grower and two firms violated a state law on unfair competition by using undocumented workers.

August 23, 2006|Molly Selvin | Times Staff Writer

Opponents of illegal immigration are using a new legal tactic: Suing businesses that allegedly hire illegal workers, contending they gain an unfair competitive advantage.

In a complaint filed Monday, a Santa Monica-based temporary employment agency that supplies legal farmworkers sued a Central Valley blueberry grower and two other companies. The agency contends that the grower hired illegal workers, violating a contract to use the agency's employees.

The California lawsuit is believed to be the first based on the state's unfair-competition law, legal experts said. Although the case may be difficult to win, they said, it seeks to highlight widespread criticisms that the federal government is ineffective in enforcing laws barring the hiring of illegal workers.

Companies that follow the law can't compete because their labor costs are so much higher than those using illegal workers, said David Klehm, a Santa Ana attorney who filed the suit. He said he was readying similar claims on behalf of roofers, framers, metal shop owners and other small-business owners.

For The Record
Los Angeles Times Thursday August 31, 2006 Home Edition Main News Part A Page 2 National Desk 2 inches; 79 words Type of Material: Correction
Global Horizons: An article in the Aug. 23 Business section about an unfair-competition lawsuit filed by Santa Monica-based Global Horizons Inc. noted that Labor Department officials in May had assessed the labor contracting firm $300,000 in fines and back wages for unfair labor practices. Global Horizons said last week that it announced in June it was backing out of an agreement with federal officials to pay the fines and back wages and was pursuing litigation to resolve contested issues.

Santa Monica-based Global Horizons Inc. claimed in the lawsuit, filed in Kern County Superior Court, that blueberry grower Munger Bros. hired illegal immigrant workers from Ayala Agricultural Services and J & A Contractors. All the defendants are based in California's farm-rich Central Valley.

The suit alleges that Munger Bros. had agreed to have Global Horizons provide more than 600 blueberry pickers this spring but abandoned the agreement less than a month into the two-month contract and instead hired illegal immigrants.

"People have been turning their back on the reality that 95% of the agricultural industry uses illegals," Global Horizons President Mordechai Orian said. "We just got hurt with what's out there. We bring in legals. This is just unfair."

Theodore Hoppe, a Fresno lawyer representing Munger Bros., denied that his client hired undocumented immigrants. He said he hadn't yet seen the lawsuit but insisted that Global Horizons "walked off the job because they couldn't perform as contracted."

"Their workers weren't able to do the type of work they had warranted," he said.

Global Horizons sued under the Cartwright Act, California's version of U.S. antitrust laws.

Klehm, Global Horizons' lawyer, said the defendants "conspired to use undocumented workers" who earn lower wages. "By engaging in this conduct of illegal behavior, it lessens competition," he said.

Klehm opened his practice two months ago, after 13 years representing hospitals and doctors, to focus on companies that have lost business because their competitors are hiring illegal immigrants.

Legal experts said these cases could be difficult to win.

"It's clearly a novel strategy, but it may reflect desperation as well as novelty," said Harley Shaiken, a UC Berkeley professor who studies labor issues.

Under California statutes, plaintiffs must prove that a competitor directly harmed their business.

"You have to prove intent, that real damages were suffered," Shaiken said, and there are "endless reasons" that a defendant could marshal against that claim.

"The suit reflects a real anger that's out there, but it's unlikely to change much on a firm-by-firm or case-by-case basis," he said. Only Congress can change the nation's immigration laws, and "Congress is unable to act."

The Global Horizons suit follows the settlement in January of a Washington state class-action lawsuit involving employees of a grower who sued their employer for driving down wages by hiring undocumented workers. The grower settled the case, based on federal anti-racketeering laws, for $1.3 million.

Global Horizons has had labor troubles of its own. The company -- which 16 years ago started providing temporary workers for high-technology industries -- now operates in 28 states, concentrating on healthcare, agriculture and high tech.

In May, the U.S. Labor Department ordered the company to pay $300,000 in fines and back wages for allegedly deceiving and underpaying 88 Thai workers it sent to Hawaii to harvest onions and pineapples.

Federal investigators also found that Global Horizons illegally deducted wages for housing and food, and may not have paid for the workers' transportation.

The company has also had problems involving alleged labor violations in California and Washington state.

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