SENATE BILL REPORT
SB 5841
BYSenators Hansen, Barr, Bailey, Gaspard, Warnke, Bauer, Rasmussen and Benitz
Establishing fair practice standards for produce handlers and associations.
Senate Committee on Agriculture
Senate Hearing Date(s):February 21, 1989; February 28, 1989
Majority Report: That Substitute Senate Bill No. 5841 be substituted therefor, and the substitute bill do pass.
Signed by Senators Barr, Chairman; Gaspard, Hansen, Madsen.
Senate Staff:Bob Lee (786-7404)
March 3, 1989
AS REPORTED BY COMMITTEE ON AGRICULTURE, FEBRUARY 28, 1989
BACKGROUND:
There is no state law which requires buyers of farm products to bargain in good faith with associations of farmers. There is currently no requirement in state law for unresolved contract disputes for the sale of agricultural products to be submitted to arbitration or mediation.
SUMMARY:
An association may be formed by producers to bargain on their behalf with buyers of farm products. If the producers have given this association authority to be their exclusive negotiating agent, the association may file a request with the Department of Agriculture for accreditation. Several criteria exist for accreditation including the number of producers and the quantity of product represented by the association.
If the department finds that the association represents a sufficient number of producers or a sufficient quantity of product to function as an effective bargaining agent, and the association has binding contracts with producers empowering the association to negotiate contract terms, then the department is directed to approve the application for accreditation.
A handler of farm products includes persons who purchase farm products for processing or sale or who act as an agent or broker for a handler.
Practices made illegal for handlers of agricultural products include: (1) coercing a producer to join or refrain from joining an association of producers; (2) refusing to deal with any producer because of membership with an association; (3) discriminating against any producer as to price, quantity, or other contract terms because of membership with an association of producers; (4) coercing or intimidating a producer to join or cancel a membership agreement with an association of producers; (5) loaning or providing anything of value to a producer as an inducement to withdraw from an association of producers; or (6) refusing to negotiate in good faith with an accredited association of producers.
The following actions are made illegal for associations of producers: (1) to refuse to negotiate in good faith with a handler; (2) to coerce or intimidate a handler to breach or cancel a marketing contract with an association of producers or a member; (3) to make false reports about the finances, management or activities of an association of producers or a handler; (4) or to coerce or intimidate a producer to cancel a membership agreement or marketing contract with an association of producers.
Persons who violate these provisions can be assessed a civil penalty of up to $10,000 for each offense. A person who knowingly violates these provisions, upon conviction, is guilty of a gross misdemeanor.
A procedure is established for filing complaints with the Department of Agriculture for violations of this act. Authority is provided to the Department of Agriculture to require persons to establish and maintain records, make reports and provide other information as may be reasonable to carry out this act.
A process is established whereby an association of producers may request accreditation from the Director of Agriculture to serve as the exclusive negotiating agent for producer members.
The director of Agriculture is directed to designate an annual contract settlement period. This period is to end just prior to the earliest date that advance contracts are normally entered into for that specific crop. The director annually sets the time and place for the accredited association of producers and each handler to meet to bargain for a contract for the coming crop year.
If an agreement is not reached within three weeks of bargaining, the director shall refer the matter to arbitration.
The department selects five candidates for the position of arbitrator. Each side in the negotiation strikes two of the names and the remaining person will act as the arbitrator. Within five days after negotiations terminate and if a contract has not been reached, each party is to submit in writing its final offer. Within ten days of his appointment , the arbitrator is to choose the final offer of one party. Once the arbitrator makes his selection, the Director of Agriculture shall direct that the contract presented to the parties be executed. The contract is binding on both parties.
The reasonable costs and expenses of any arbitration shall be shared equally by the association involved and the handler.
A handler or an association of producers who violates this act shall be deemed to have committed an unfair practice and may be fined, through a court process, for up to three times the actual damages sustained.
EFFECT OF PROPOSED SUBSTITUTE:
Changes were made to the bill so that it does not apply to cooperative associations nor to firms that solely buy and sell fresh unprocessed agricultural products.
The substitute bill has the same requirement for good faith bargaining as the original bill. If agreement is not reached on the contract terms, a mediator would be appointed and is directed to use his best efforts to negotiate the disputed contract provision so that a contract may be formed.
In addition to those listed in the original bill, it is an illegal activity for a handler to discriminate against a producer because that producer promotes legislation on behalf of an association.
Appropriation: none
Revenue: none
Fiscal Note: available
Senate Committee - Testified: PRO: Donald Didier, potato grower; Steve Jorgensen, potato grower; Larry Jorgensen, potato grower; Bill Watson, potato grower; Richard LaFramboise, Central Washington Farm Crops Association; Bob Holloway, potato farmer; Dan Gwyn, potato grower; Charles Gwyn, potato grower; Ray Clayton, farmer; CON: David Blair, Bellingham Frozen Foods; Arthur Symons, Jr., Symon's Frozen Foods, Inc.; Bill Fritz, Dave Klick, Washington Food Processors Council