How a Scott County tobacco farm allegedly mistreated workers from Mexico

According to a lawsuit filed in May against Scott County farmers Gene and Austin McKenzie by eight Mexican farm workers, this house in Stamping Ground is where some of the workers were assigned to live by the McKenzies in 2013. The lawsuit alleges many complaints, among them that the houses were not fit for occupancy, because of broken plumbing, little to no furniture, rats and insects, a lack of heat and no window screens. Photo by John Cheves | Staff
According to a lawsuit filed in May against Scott County farmers Gene and Austin McKenzie by eight Mexican farm workers, this house in Stamping Ground is where some of the workers were assigned to live by the McKenzies in 2013. The lawsuit alleges many complaints, among them that the houses were not fit for occupancy, because of broken plumbing, little to no furniture, rats and insects, a lack of heat and no window screens. Photo by John Cheves | Staff Herald-Leader

STAMPING GROUND — Scott County tobacco farmer Gene McKenzie needed workers in 2013, but no American was willing to stoop in his sun-baked fields, he said. So he reached out 2,350 miles to the impoverished southern Mexican state of Oaxaca, where an agent recruited 14 men to travel north and toil at McKenzie Farms for six months.

That was perfectly legal. McKenzie brought the Mexican workers into the United States through the federal H-2A visa program, created expressly for this purpose. Hundreds of Kentucky farmers in search of affordable labor have done likewise. Nationally, the number of "guest" workers on H-2A visas soared 60 percent from 2010 to 2014, reaching 89,274.

The trouble at McKenzie Farms started after the men arrived.

According to a lawsuit the workers filed in May, McKenzie Farms illegally charged them thousands of dollars for their H-2A visas, housing and transportation; underpaid them by thousands more; provided shabby living quarters; and falsified wage-and-hour paperwork so it appeared they worked less than they really did. The men said they were threatened with arrest and deportation if they complained to the authorities.

Authorities got suspicious before the suit was filed. The U.S. Department of Labor sent investigators to McKenzie Farms to look into the men's situation. Although the government concluded that it couldn't prove who was to blame for some problems, such as expenses charged to the workers, it fined the farmer $12,600 for wage-and-hour contract violations that "are very serious and show a complete disregard for the law and the workers," according to a January 2014 report from one of the investigators.

McKenzie sent the government a handwritten note on April 4, 2014, pleading ignorance of H-2A program rules.

"This was the frist year for us with H-2A workers we did not no what to do," he wrote. "This is a lot money we don't have."

The Labor Department's Wage and Hour Division office in Louisville halved McKenzie's penalty to $6,300, which he paid.

McKenzie still uses H-2A labor from south of the border. He's trying to settle the workers' lawsuit out of court. In a brief interview with the Herald-Leader, he declined to talk in detail but blamed his previous immigration lawyers for giving him bad advice in 2013 on how to comply with the program.

"They're the ones who wrote the damn contracts for us. This was the first time we'd ever been in the program. We didn't know what to do," McKenzie said. "They never gave us no direction on what to do with these boys. They just dropped them off here. As far as I'm concerned, we treated them right."

The law firm McKenzie used — Conley Law Group of Lexington, headed by attorney Elizabeth Conley Buckley — also was named as a defendant in the workers' lawsuit. The firm has hired attorney Thomas Bullock to defend it.

"My client denies any wrongdoing toward any party," Bullock said last week. "My client is a law firm that prepares applications for the H-2A immigration program. With respect to information exchanged between my client and the farm, the rules governing lawyers keep us from being able to provide any such information at this time."

'Captive labor'

It's not uncommon for foreign workers to be exploited through the H-2A program, said Briana Beltran, an attorney for Southern Migrant Legal Services in Nashville, which represents the men suing McKenzie.

"The very nature of the H-2A program is that people can only work for the employer who requested their labor. They cannot search for a better opportunity," Beltran said. "So we have someone who comes here from Mexico without any resources, who possibly cannot speak English, who is legally tied to one farm until he leaves. That makes him much more vulnerable to exploitation. The farmers literally have captive labor.

"That's not to say that every employer recruits H-2A workers for this reason. But based on our own legal work, it's clear that many of them do."

The same day Beltran's group sued McKenzie in U.S. District Court, it filed lawsuits against tobacco farms in Monroe and Nicholas counties on behalf of H-2A workers who say they were mistreated during their time at those places. The Department of Labor said it has fined the Monroe County farm $4,736 for unpaid wages and for migrant worker and fair labor violations, and it has opened an investigation at the Nicholas County farm.

Nationally, the number and median size of fines levied against H-2A employers more than tripled from 2010 to 2013. Yet critics say penalties still aren't strong enough. In March, the U.S. Government Accountability Office issued a report acknowledging widespread abuse of H-2A workers but poor coordination among the departments of Labor, State and Homeland Security to bar offending employers from participating in the program.

One example given frequently by migrant labor advocates: Candy Brand, an Arkansas tomato farm, settled a class-action lawsuit in 2011 by agreeing to pay $1.5 million in back wages and damages to more than 1,800 of its former H-2A workers from Mexico. But Candy Brand remained in the H-2A program under a new name, Clanton Farms.

The Department of Labor is pushing for stronger enforcement, said agency spokesman Lindsay Williams. In fiscal year 2014, the department recovered $2.61 million in back wages for more than 3,600 H-2A workers and $2.2 million in penalties from their employers, Williams said. But it can be difficult to get at the truth in some cases, he said.

"Conducting investigations in low-wage industries, including agriculture, can be challenging when workers are reluctant to speak to investigators," Williams said. "This can be for a variety of reasons, including that they may fear jeopardizing their current employment if they are seen talking with one of our investigators."

'Kickbacks' alleged

Gene McKenzie and his son, Austin, farm about 225 acres they own just outside the small town of Stamping Ground. In early 2013, the McKenzies decided to bring in Mexican workers to help them set, cut, strip and house their burley tobacco. They had advertised for local field hands in the Frankfort newspaper, but nobody expressed interest, Gene McKenzie said later.

"Many years ago, Americans were willing to do this work. People came in from Clay County, they came in from Hazard, they came in from Harlan County to knock on doors at farms, looking for work stripping tobacco," said Hampton "Hoppy" Henton, a Versailles farmer and former U.S. Department of Agriculture official. "But I can't remember the last time anyone knocked on a farmer's door and said, 'Do you need any help?'"

This was McKenzie's first time hiring foreign workers, so he retained Conley Law Group to walk him through the H-2A visa application process and advise him. In Mexico, Isaias Diego-Ramirez recruited men for McKenzie with the promise of good American wages. Diego-Ramirez's Spanish-speaking brother, Francisco, would be McKenzie's crew foreman in Kentucky.

As soon as the Mexican workers arrived, in June 2013, McKenzie Farms began to breach its contract with them, according to the men's lawsuit. One key allegation contained in the suit is that each worker was charged $2,000 for his H-2A visa, $180 for his transportation inside the United States and $80 for his monthly rent, none of which was supposed to be the workers' responsibility. Most of the workers had taken out loans in Mexico to pay for their passports and the 900-mile trip from their hometown to the U.S. border, so they already were in debt.

The men "had no practical choice but to continue their employment with defendant McKenzie Farms in order to earn money to pay down these debts," they said in their suit.

The men paid these expenses in cash as "kickbacks" to the foreman, Francisco Diego-Ramirez. The men asked Gene McKenzie who ultimately was pocketing their money, him or the foreman, but he "only instructed them to settle things with Francisco Diego-Ramirez," according to the suit.

Confronted about kickback allegations by the Department of Labor, McKenzie "stated he did not know anything about it and denied ever receiving any money from the workers for payment of visa fees or rent. Even some of the workers' interviews show they think (Diego-Ramirez) took the money and did not give it to the employer," investigators wrote in their report. The government appeared to drop the matter.

Diego-Ramirez, who supervised the men and drove them to and from their work sites, could not be reached for comment. Court records show that Kentucky State Police arrested him Aug. 27, 2013, in Georgetown on charges of driving without a valid operator's license or proof of insurance. He paid $268 in fines and costs.

'There was pressure'

Other allegations in the suit include:

■ The workers were supposed to get $9.80 an hour for a 35-hour week. But some weeks they worked 50 or more hours and were paid less than $7 an hour. They also were short-changed when they were paid collectively as a group on a "piece-rate" basis. During slow periods, when there wasn't enough for the men to do on the farm, they were told to find outside jobs to support themselves.

■ Two small houses provided for the men, in Stamping Ground and Georgetown, were unfit for occupancy. Problems included rats and insects, lack of furniture, broken plumbing, no screens and no heat despite freezing temperatures in December.

■ In August 2013, Department of Labor investigators came to McKenzie Farms to interview the men about their working conditions. Diego-Ramirez ordered the men "to deny everything, to tell the investigators that they were getting paid well and to say that they were not being charged for the visas, in-bound transportation and rent," according to the suit.

At this time, Diego-Ramirez also insisted that each man sign a document written in English stating that he "had no problems at work," according to the suit. When the men balked, Jessica Nolazco, the client coordinator for Conley Law Group, told the men they would lose their H-2A visas if they did not sign the document, the suit alleges. Under pressure, the men complied. Austin McKenzie collected the signed papers from them.

Department of Labor investigators returned three months later, but Gene McKenzie and Diego-Ramirez "intervened, preventing them from completing interviews with the workers," according to the suit.

"There was pressure here, we feel, to keep the Department of Labor from learning the full story on what was going on," said Beltran, the workers' attorney.

The lawsuit also alleges that the workers were ordered to meet at their Stamping Ground house in October 2013 with two women from Conley Law Group, identified in the suit as Nolazco and Maria Hernandez.

The women allegedly told the workers to hand over their identification documents so the workers could return to McKenzie Farms in 2014. The women also said the workers had to pay them $1,500 for their H-2A visas for the upcoming year. The workers refused. The "women became angry" and threatened "to have them sent back to Mexico," according to the suit.

"One of the women stated that she needed to be paid for her fees because otherwise she would have no money to eat," according to the suit.

The Department of Labor did not hold Conley Law Group responsible for problems in its final report on McKenzie Farms. But it did criticize the farm for contractually failing "to forbid their agent, Conley Law Group, from seeking or receiving payments from any prospective H-2A workers," in violation of federal regulations.

'No one's happy'

Kentucky farmers have their own complaints about the H-2A program. They cite voluminous record-keeping, bureaucratic delays, strict on-site inspections and rising costs, including an hourly "prevailing wage" established for all tasks, no matter how menial, that now tops $10.

Kentucky House Agriculture Committee chairman Tom McKee, D-Cynthiana, has sponsored legislative resolutions urging Congress to make the H-2A program cheaper and easier for farmers. McKee, a farmer himself, has used H-2A workers and says "it's a program that we couldn't grow tobacco without — not in any large amounts, anyway."

But he warns others to consult a qualified attorney before trying to bring workers into the country.

"There are timetables involved and things you're responsible for doing at different steps along the way, and if you've not done this before, it can look like a sea of paperwork," McKee said.

Henton, the Versailles farmer, said he hires local people for $10 to $12 an hour rather than importing workers. Unlike a 10,000-acre farm with diversified operations, he said, most small farms need work crews only "in spurts" during the busiest parts of their season. But H-2A rules require farmers to provide a full set of hours for their foreign workers week after week, month after month, until the workers go home.

"So this program isn't really designed to fit a family farm in Stamping Ground," Henton said.

He added: "No one's happy with H-2A. But no one has a great alternative, either."