Portland labor lawyers have filed an aggressive and potentially precedent-setting class-action lawsuit against a Portland baked goods manufacturer, alleging the company overworked its production line employees—many of whom are vulnerable immigrants and refugees with limited English skills, they said—and bilked them out of overtime pay.
The suit—which seeks both daily and weekly overtime pay for workers—is unheard of in Oregon, and could have a major impact on the manufacturing industry in the state. For now, though, it’s focused on one Gresham business: Portland Specialty Baking (PSB).
About 175 production line workers at the plant mass-produce baked goods for outlets like Starbucks, Walmart, and Jamba Juice under the “Franz” and “Rich’s” labels.
Seven named plaintiffs, along with other current and former employees that the suit is aimed at compensating and protecting, “are hard workers, and many of them come to this country from difficult circumstances, seeking to start to start new lives,” said Corinna Spencer-Scheurich, an attorney and deputy director of the Northwest Workers’ Justice Project (NWJP), which filed the complaint. “The lawsuit is seeking to assure these Oregonians have fair working conditions and pay.”
PSB’s no stranger to complaints. The company was fined $28,125 last year by the Oregon Occupational Safety and Health Administration for a number of “willful” safety violations after a worker’s hand was crushed in a dough-mixing machine. Late last year, an employee not involved with the current lawsuit filed a complaint with the state alleging issues with pay and the lack of breaks. And the company was accused of union-busting earlier this year, when a complaint with the National Labor Relations Board alleged it threatened to fire workers and close the plant if a union formed, the Northwest Labor Press reported.
In this case, employees say PSB routinely violates overtime pay laws, regularly forces workers to work more than 13 hours a day, and illegally pressures them not to take sick leave.
“We always knew it was illegal but just no one would stand up,” employee Jose Ignacio Mazahua Reyes told the Mercury via a translator. Reyes is a 63-year-old Mexican immigrant, and a plaintiff in the suit, who’s worked at PSB for nine years. He works on his feet during his shifts, which are regularly scheduled for eight hours. But when time comes to clock out, he says, his boss will often tell him he needs to stay longer—without paying the overtime rate he’s owed.
“It’s very sad because I finished my schedule and I’m ready to go, and it’s sad we have to do a lot more work,” Reyes said. “How is it that we have more work? When did you ask me to do it? When did I agree to it?”
The potentially precedent-setting aspect of the suit concerns whether a manufacturing company needs to pay both daily time-and-a-half overtime when an employee works more than 10 hours in a day, as well as overtime for when the same employee works more than 40 hours in the same week.
PSB argues everything has been above board. Scott Seidman, a lawyer for Tonkon Torp representing the company, says the bakery calculates both the worker’s daily and weekly overtime and pays the higher of the two, which the Oregon Bureau of Labor and Industries (BOLI) suggests.
“There’s nothing in the statute that says I’ve got to pay you double or triple time. Oregon doesn’t have any double-time or triple-time law, and that’s the main dispute,” Seidman says. “If they are right about how overtime works, then every manufacturing employer who has been following the Oregon Bureau of Labor and Industries’ guidance and has been relying on it for many years presumably must be all liable” for paying both daily and weekly overtime.
Spencer-Scheurich says manufacturing companies are, in fact, liable for both amounts.
“We think that the BOLI FAQ [or “frequently asked questions” document] on the issue is simply wrong,” she says. “A FAQ is not a law or regulation and it even contains a disclaimer about how it is not legal advice or an agency order.”
Spencer-Scheurich argues daily and weekly overtime laws “are two separate statutory schemes. Nothing in either statute says that PSB gets out of paying both. It would undermine the purpose of the daily overtime statute if an employer could get out of paying daily overtime just by making you work more than 40 hours in a week, or vice versa.”
And BOLI, despite a long-held position that manufacturers should pay one type of overtime wage or the other, concedes the legal argument is unheard in Oregon, and may actually be correct.
“We absolutely see the legal position that’s being taken—the laws themselves don’t actually say that you look at both and compare them and pay them the highest” said BOLI Deputy Labor Commissioner Christie Hammond. “We’re not aware that anybody has ever pursued this theory before.”Read the lawsuit below, or click here to view it in a separate window: