A federal investigation determined that Backyard Farms in Madison repeatedly violated federal labor laws by dismissing U.S. employees to make room for incoming foreign workers. The entrance to the company is shown Wednesday. Rich Abrahamson/Morning Sentinel

MADISON — Backyard Farms, one of the leading tomato producers in the country, repeatedly violated federal labor laws by dismissing domestic employees to make room for incoming foreign workers, according to an investigation by the U.S. Department of Labor.

The grower paid lower wages to domestic workers when compared to what migrant workers earned performing the same work, federal inspectors said in a 48-page report that reviewed company practices from 2017 to 2019. Backyard Farms also contracted with three temporary-help agencies that were not farm labor contractors registered to perform the work, a violation of federal law.

The company also didn’t provide employees with copies of their work contracts, as it’s required to do, the report said.

As a result of the violations, Backyard Farms was ordered to pay $245,351 in back wages and $92,114 in civil penalties.

The federal report recently obtained by the Morning Sentinel outlines in detail how Backyard Farms — which is based in the Somerset County town of Madison and is one of the largest employers in the region — told temporary domestic employees that there was “a lack of work” in explaining why they were let go. But the company in administrative records cited poor performance and absenteeism for the dismissals, the report said.

Federal rules dictate that employment opportunities first be given to domestic workers rather than migrant ones.

“The employer claimed the emails from its HR Department to staffing agencies stating workers were laid off due to a lack of work did not reflect the real reasons why the employee assignments ended,” the report said. “According to Backyard Farms, the HR employees did not know the reasons for the separations when they emailed temporary employee assignments were ending due to a lack of work.”

Investigators found Backyard Farms violated labor provisions of the H-2A Temporary Agricultural Visa Program and the Migrant and Seasonal Agricultural Worker Protection Act. H-2A is a federal reference to migrant workers. Specifically, the company was found to have given preferential treatment to migrant workers and failed to contact former domestic workers prior to hiring for seasonal help, according to the report.

The Department of Labor first announced its findings in March, but the report it later released was part of an Freedom of Information Act request by the Morning Sentinel, giving greater detail about the violations and the investigation itself.

Edmund Fitzgerald, a Labor Department spokesman, said in an email that the company “completed payment of the wages and penalties in March of this year.”

“When a settlement is agreed to, it includes a payment schedule,” Fitzgerald said.

Backyard Farms had three primary jobs for its agricultural workers: crop care, pickers and packers. Included in the crop care duties is deleafing plants as they grow higher in the company’s massive greenhouses. The job description for seasonal workers in 2018 was limited to deleafing.

“The employer said it decided to hire H-2A workers for deleafing in 2018 because it fell behind on deleafing work during the 2018 H-2A certification period,” the report said, noting that domestic workers sometimes did these same duties.

“Many of these workers performed corresponding employment job duties during the validity period,” though the exact number of workers was not counted and that “workers performed corresponding employment job duties during the 2018 validity period but were not paid the H-2A rate,” the report said.

For instance, one worker was paid an hourly rate of $13.25 during a shift on July 27, 2019. A different employee doing the same tasks on the same day was found to have been paid an hourly rate of $11.62.

“Violations were found for 103 workers in corresponding employment who were not paid the minimum H-2A rate.”

Backyard Farms was represented in the federal investigation by two Michigan-based attorneys, Maria Dwyer and James Stadler. They did not respond to several email requests to discuss the findings of the report.

The intentions of H-2A programs, according to the Department of Labor, is to allow agricultural employers who anticipate a shortage of domestic workers to bring in foreign workers to fill jobs on a temporary or seasonal basis. The Migrant and Seasonal Agricultural Worker Protection Act establishes employment standards for wages, housing, transportation, disclosures and record-keeping.

The investigation was the first federal inquiry into Backyard Farms, although its owner, Mastronardi Produce Ltd. of Kingsville, Ontario, has been involved in two other investigations over the last 12 years.

The first one in 2009 involved a Romulus, Michigan-based Mastronardi company that was found in violation “for warehouse workers who were not paid while they were waiting for cucumber trucks.” In this case, back wages were paid to three workers.

A 2013 investigation into a Coldwater, Michigan, subsidiary of the company revealed “H-2A violations for illegal deductions, a failure to comply with wage statement requirements, failure to provide workers with a copy of the work contract, and a failure to pay required wage rates.” In that case, back wages of more than $29,000 were paid.

The investigation into Backyard Farms began in July 2019. Investigators based in Manchester, New Hampshire, made the determination that it violated federal requirements by dismissing domestic workers employed through temporary-help agencies to make room for the incoming foreign workers.

According to the report, “a layoff for lack of work is only permitted if all the H-2A workers are laid off first.” The temporary workers were often dismissed without just cause and should have been offered employment over foreign workers, federal authorities found.

Company officials often cited performance and absenteeism as reasons for not hiring back temporary workers, but investigators found no supporting record-keeping or other evidence to back up the claims.

“The employer can say whatever it wants now about the performance of the workers, but at the time of the dismissals, the staffing agencies and workers were not told the workers were being dismissed for performance and absenteeism reasons,” the report said.

The federal findings did not prevent Backyard Farms from continuing to participate in H-2A programs, Fitzgerald said.

The company was founded in 2007 and bought by Mastronardi Produce in 2017. It operates in Madison using the two greenhouses covering 42 acres at 131 River Road.

Mastronardi Produce was founded in the 1940s and grows, packages and distributes more than 50 varieties of non-GMO tomatoes, cucumbers, peppers and other products across the country. Their products are packaged under the SUNSET brand.

The greenhouses in Madison utilize hydroponics and grow a variety of tomatoes that are shipped to stores including Hannaford, Shaw’s, Walmart and Whole Foods.