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Shepherds’ Wage Fixing Suit Fails

Working at the beginning stage of the food supply chain, a group of shepherds has failed in their attempt to be reclassified as employees.

A group of shepherds working under the H-2A visa program, which covers agricultural guest workers, alleged that members of two trade associations that represent sheep ranchers conspired to suppress the wages paid to shepherds in violation of federal antitrust laws.

Under the H2-A visa program, the Labor Department sets a monthly wage floor for shepherds, who had been hired by the associations instead of by their member companies.

The shepherds asserted that the sheep ranchers’ association members had fleeced them by conspiring to fix wages only at the minimum wage floor that was set by DOL each month.

A district court judge in Colorado issued a ruling that effectively ended the suit by holding that the shepherds, whether by hook or by crook, had failed to make their case.

Despite its seeming novelty, the case has important implications, according to attorney Stephen R Chuk of the law firm of Proskauer Rose LLP .

Because this is one of the first judicial opinions following the Justice Department and Federal Trade Commission’s recently announced initiative to prosecute wage fixing claims, he says the judge’s decision is seen as providing important guidance for associations and their members who could end up facing similar claims.

“Where a regulatory system provides companies with an incentive to offer only a minimum wage, Plaintiffs have a significant burden to demonstrate more than parallel conduct on behalf of defendants,” Chuk points out.

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