EEOC and U.S. Attorney Successfully Intervene in Deal That Would Have Diverted Monies Away From Victims of Discrimination
DALLAS – U.S. District Chief Judge Jorge A. Solis issued an order on September 11, 2015, to override a confidential settlement that would have re-directed over half a million dollars away from a class of 32 intellectually disabled former employees of Hill Country Farms, Inc. (HCF), dba Henry’s Turkey Service.
The U.S. Equal Employment Opportunity Commission (EEOC) had asked the U.S. attorney’s office for the Northern District of Texas to monitor a suspicious land deal — a financial arrangement that would have resulted in a total of approximately $600,000 changing hands in settlement of an action for declaratory judgment filed in Mills County, Texas, where Henry’s Turkey Service was based. As a result, the U.S. attorney’s office found evidence of what it found to be a fraudulent transaction and filed an emergency motion for a court intervention.
When issuing the order, Judge Solis wrote: “The Court does not believe it is by accident that the settlement proceeds make their way to the children of HCF’s owners, all while avoiding the reach of the United States. This was an intentional scheme concocted solely to shield a substantial sum of money from the United States’ collection efforts. Accordingly, the Court finds … any benefit due to the Estate under the Settlement Agreement is the property of HCF and, as such, is subject to this Court’s authority to aid the United States in obtaining satisfaction of its judgment against Henry and HCF.”
The U.S. attorney and EEOC had filed briefs seeking the court’s intervention to prevent the injustice that the government alleged would result if a secret side agreement were allowed to control a settlement of the Mills County action.
EEOC and the U.S. attorney were able to intercept and secure the monies as part of an effort to collect over $3 million in unpaid judgments obtained by two federal agencies against Henry’s Turkey for wages, financial exploitation, discrimination and abusive conduct against the disabled adults who worked in Texas and Iowa for decades while never being paid more than $65 per month.
The Motion for Turnover Order filed by the U.S. attorney in Case No. 3:12-CV-4737-P in the Dallas federal court sought to collect on both the $3.74 million judgment (2013) in favor of EEOC under the Americans with Disabilities Act (ADA), against Hill Country Farms, dba Henry’s Turkey Service, and an earlier $1.7 million judgment (2011) by the Wage and Hour Division of the U.S. Department of Labor (DOL) against the same defendant and corporate officer, Kenneth Henry, for minimum wage and overtime violations of the Fair Labor Standards Act (FLSA).
“Since the time when most of the men were rescued from their deplorable working conditions in 2009, they have been waiting for compensation,” said Robert Canino, regional attorney for EEOC’s Dallas District Office, who worked closely with the U.S. attorney’s office in the collection. “The jury verdict in 2013 struck a blow toward justice and brought to light important discrimination issues; however, the monetary aspect of the legal remedies has been slow in coming. While the case has been very important in furthering societal dialogue on employment practices that can be misused to exploit the disabled, EEOC has not relented in its pursuit of the dollar compensation that these men earned by their sweat and their suffering.”
On May 1, 2013, a jury in U.S. District Court for the Southern District of Iowa in Davenport rendered a verdict of $240 million in favor of the 32 workers. The jury found that for years during their employment, the intellectually disabled men went unpaid and were subjected to substandard living conditions, restrictions on personal freedoms, denial of medical care and harsh discipline as well as verbal and physical harassment. The jury found further that the treatment suffered was because of the contracted turkey processing workers’ vulnerability as persons with intellectual disabilities.
This largest jury verdict ever obtained by EEOC was later reduced to $1.6 million, representing $50,000 in compensatory and punitive damages per man based on applicable statutory caps under the Civil Rights Act of 1991. An earlier award for unpaid market wages for a two-year period, together with the damages for the treatment, brought EEOC’s total judgment to $3.74 million. Notwithstanding the elusiveness of the company’s assets in the years surrounding the litigation, collection of the judgment through garnishments and liens had recently reached an accumulated amount of about $272,000 prior to this latest court order. The confidential agreement to change the beneficiaries of the Texas land deal to re-direct proceeds away from possible payment for the discrimination was dated July 2013, only one month after the June 2013 final entry of judgment in favor of EEOC in the discrimination case.
If the company and private parties involved comply with the court’s order, the government will begin a process for distribution of over $850,000 collected to date to the class members. EEOC will coordinate with the U.S. Department of Labor to begin the distribution plan and process.
Protecting vulnerable workers is one of the six strategic enforcement priorities identified by the Commission. EEOC is responsible for enforcing federal laws against employment discrimination. Further information about the agency is available at www.eeoc.gov.