YAKIMA, Wash. — Legal advocates for employees and employers are engaged in a public debate over whether the state Farm Labor Contractor Act is serving its original purpose to protect employees, or if it’s eliminating jobs by running unsuspecting companies out of business.

The debate follows two decisions in state and federal courts in recent years that haven’t settled the contention over what constitutes farm labor contracting, fees for service and how penalties and damages should be applied to those held liable for violating the law.

Legal advocates for employers say there could be hundreds of companies and farmers currently operating as unlicensed farm labor contractors under state law. Farm labor advocates, meanwhile, say the law is unambiguous and has successfully provided recourse to workers who were denied basic information about their wages and other terms of their contracts.

On June 17, a judge with the federal Eastern District Court of Washington ruled that N.W. Management and Realty Service Inc. failed to register as a farm labor contractor or provide written documentation about wages and other conditions of work, a requirement under the law, to at least 650 farm workers.

But N.W. Management and Realty Service wasn’t held solely liable for violating the law. Also liable was John Hancock Insurance Co., which owned the Alexander and Independence orchards near Sunnyside and had leased them to another company, Farmland Management Services, which then subleased the orchards to N.W. Management and Realty Service. The court found both Hancock Insurance and Farmland guilty of doing business with an unlicensed contractor.

Hearings are still ongoing to determine damages in that case, Columbia Legal Services attorney Lori Isley said. Columbia Legal, which represented the workers in the case, is a legal services firm that frequently represents farm workers in disputes with employers.

Isley said such cases are only pursued to ensure the minimal protections promised under the law.

“You have to tell someone what the minimal terms of the job are, and that’s what did not happen here,” Isley said.

Yakima attorney Brendan Monahan, who has represented several large companies and growers in cases involving the law, said the language in the act, last overhauled in 1985, is vague and the fines per violation per employee can quickly amount to millions of dollars that would put many custom farmers out of business if they were found in violation. Monahan said the law was passed to single out knowingly unscrupulous farm labor contractors, but lawsuits have broadened the act to punish even those who unknowingly break the law.

“More recently, however, there has been a concerted effort by Columbia Legal Services to use the Farm Labor Contractor Act as a sword to impose extraordinary monetary judgments on farmers who have no idea that the Farm Labor Contractor Act even applies to them,” Monahan said.

In August 2011, the 9th U.S. Circuit Court of Appeals awarded $2 million in damages to 600 workers who had accused the now-defunct farm-labor contractor Global Horizons, along with Green Acre Farms and Valley Fruit Orchards, of unlawfully displacing them with guest workers from Thailand. But later that year, the appeals panel withdrew its decision and asked the state Supreme Court to hear questions in the case related to damages awarded by the Farm Labor Contractor Act.

In 2012, the state Supreme Court ruled unanimously in Perez-Farias v. Global Horizons Inc. that judges require those found guilty of violating the farm labor law to award $500 per plaintiff per violation. Monahan had argued on behalf of Green Acre and Valley Fruit that the act allowed lower court judges to use discretion in determining the amount of damages.

“It’s not unusual at all for an (agricultural) employer to have 2,000 different employees on payroll over the course of a year,” Monahan said. “If you have no idea you’re acting as a farm labor contractor, you see how it can get out of hand real quickly.”

Isley said the decision is consistent with previous court rulings, and that Columbia Legal Services doesn’t blithely involve itself in any grievance that comes across its attorneys’ desks. She said the companies were found in violation of the statute under “common sense” intepretations of the law.

“Our resources are limited and we can only take on the most egregious violations,” Isley said. “The Farm Labor Contractor Act allows for the appropriate enforcement of the law when there have been violations.”

Suchi Sharma, an attorney with the state Department of Labor and Industries, agreed with the court’s interpretation of the law. Sharma said the law clearly lays out what constitutes a farm labor contractor and the penalties for conducting business without a license.

“The agency believes the law is clear about what a fee means,” Sharma said. “The Legislature has said that it is not only money or cash, but anything that is valuable in exchange for contracting farm labor.”

According to Labor & Industries, a farm labor contractor is defined as any person, agency or subcontractor who, for a fee, recruits, solicits, employs, supplies, transports or hires agricultural workers to perform farm labor. The definition of those activities includes growing, producing or harvesting farm or nursery products, as well as reforestation work and even harvesting Christmas trees.

Dan Fazio, director of the Washington Farm Labor Association, said his organization has been inundated with requests for more information on the Farm Labor Contractor Act following the federal ruling in June. Fazio said the way the act is currently enforced amounts to providing “another meaningless disclosure form” that burdens individuals conducting legitimate business practices.

“I personally know many employers who are actively engaged in the process right now,” Fazio said. “And they came to the same conclusion I did.”

But the Washington Growers League, a Yakima-based organization that represents the interests of agricultural employers, for years has advised employers to apply for a farm labor contractor license if they believe the act applies to them, executive director Mike Gempler said.

“A lot of farms are doing relatively casual labor sharing, and the labor exposure is such that we think it’s prudent for farms to get the license,” Gempler said.

The fee to apply and renew such licenses in the state is $35, although the fee is $100 for contractors involved in forestation or reforestation work. Contractors also have to provide tax compliance certifications and a surety bond, which ranges from $5,000 to $20,000 depending on the number of employees.

There are 112 licensed farm labor contractors in the state, and only 10 of those are in Yakima County. Since 2010, Labor & Industries has cited two Yakima County-based contractors — Northwest Immigration and Consulting Services and Central Washington Recruiting — operating in violation of parts of the law.

The state has cited 17 other contractors statewide since Jan. 1, 2010. A violation of the Farm Labor Contractor Act is a misdemeanor, punishable by a maximum fine of $5,000 or up to six months imprisonment, or both.

Sharma, of Labor & Industries, said the business structure of the agricultural industry has become more complex in recent decades but that the law, backed up by consistent interpretations by the courts, hasn’t become any more difficult to apply.

“By placing these duties on the contractor, and the employer if they knowingly work with someone who is unlicensed, the worker is able to know basic terms and conditions and have some recourse by knowing who it is they are working for,” she said.

• For more information on getting a farm labor contractor license, visit www.lni.wa.gov online or call the Department of Labor & Industries employment standards program at 360-902-5315.

• Mike Faulk can be reached at 509-577-7675 or mfaulk@yakimaherald.com. Follow him on Twitter at twitter.com/Mike_Faulk.