(CN) – A federal judge in Iowa ordered a company to pay $1.8 million to 31 mentally disabled employees who gutted turkeys at a West Liberty processing plant for $65 a month – 41 cents an hour – for more than 20 years.
U.S. District Judge Harold Vietor issued the partial summary judgment against Hill Country Farms dba Henry’s Turkey Service and owner Kenneth Henry in the Davenport-based District Court. Vietor found that Henry’s, based in Goldthwaite, Texas, willfully violated federal minimum wage and overtime laws and is liable for unpaid wages and liquidated damages.
He ordered payment of $880,777 in back wages, and an equal amount in liquidated damages.
“Working on a poultry processing line is a particularly difficult and dangerous job,” Secretary of Labor Hilda Solis said in a statement. “Henry’s Turkey Service exploited vulnerable employees who have a right to, and deserve, every penny that they earned.”
Most of the workers, whom Henry’s allegedly referred to as “the boys,” lived in a 100-year-old dilapidated bunkhouse in Atalissa that resembled a barracks, with boarded-up windows and only space heaters for warmth.
Henry, a labor broker, brought the men from their homes in Texas to the West Liberty Foods plant 20 years ago.
A state fire marshal closed the bunkhouse in February 2009, soon after The Des Moines Register reported that the bunkhouse appeared to be operating as an unlicensed care center, and that their disabled workers were paid about 41 cents an hour.
Most of the men stayed in Iowa, where they received help in their search for permanent housing and jobs, while the others returned to Texas, according to the Iowa Department of Human Services.
The U.S. Department of Labor said Henry’s charged the workers for room and board, serving as their caretaker as well as the designated representative payee of their Social Security benefits. Labor said the company claimed credit for the food, housing and care against its wage obligations – and reimbursed itself for those expenses using the workers’ Social Security benefits.
“It was $65.00 a month, month after month, year after year,” Vietor wrote. “Hill Country Farms chose to pay this amount because it was the maximum cash wage a worker could receive that would not reduce the amount of his Social Security benefits. Even when company time sheets reflected that the workers put in over 40 hours a week, the stated wage on the time sheet always remained the same.”
Under their contracts with Henry’s, the men began their days at 4:45 a.m. with a half-hour of unpaid lunchtime. Though room and board was deducted from their social security benefits – and the price for those services increased each year, the men’s wages remained the same.
The Department of Labor investigated Henry’s in 1997 and 2003 and found that the disabled workers were not paid overtime. The company paid the back wages and agreed to comply with FLSA provisions.
But the most recent probe revealed that Henry’s owed 31 disabled workers more than $500,000 in unpaid minimum wages and more than $800,000 in unpaid overtime wages.
Henry and his company argued that they were contracted to West Liberty Foods and were the employees of the plant.
But Vietor found that the defendants’ paperwork shows a different story. “In respect to both turkey plant and bunkhouse workers, Hill Country Farms listed the workers as employees with the Texas Workforce Commission’s Unemployment Tax Services, paid their Medicare and Social Security taxes, and submitted W-2 tax forms on their behalf,” the 21-page ruling states. “Moreover, defendant Henry, in his deposition, stated that Hill Country Farms was their employer. Thus, Hill Country Farms d/b/a Henry’s Turkey Service was the employer of the turkey plant and bunkhouse workers and responsible to comply with FLSA requirements.”
Vietor also found that Henry’s failed to show that it incurred any costs above the amount received from the Social Security benefits and denied the credit toward the workers’ wages.
Henry’s also was sued by the U.S. Equal Employment Opportunity Commission, which accuses it of acting with malice or reckless indifference in committing major violations of the Americans With Disabilities Act.
The EEOC says the men were hit and kicked by their caretakers, that their complaints of injuries were ignored, that they were subjected to “derogatory and humiliating name-calling based on their disability,” were at times confined to their rooms in the bunkhouse, were denied restroom breaks and were denied medical attention.
State labor officials with Iowa Workforce Development previously levied a $1.1 million penalty against Henry’s for violations of state labor laws and the “depraved” exploitation of its workers.
The case was litigated by the Labor Department’s regional solicitor in Kansas City, Mo.
Labor Secretary Solis said in the statement that “Henry’s Turkey Service exploited vulnerable employees who have a right to, and deserve, every penny they earned.”
Vietor scheduled a bench trial on the remaining counts for July.