Minn. Sues Dairy for $3M in Back Wages

LINCOLN, Neb. (DTN) -- The state of Minnesota alleges in a lawsuit filed this week by state Attorney General Keith Ellison that the owners of a Minnesota dairy owe hundreds of immigrant employees at least $3 million in unpaid wages as a result of shaving regular and overtime hours from their paychecks.

The lawsuit filed in Stearns County District Court against Paynesville, Minnesota-based Evergreen Acres Dairy, Evergreen Estates, Morgan Feedlots and the dairy operations' owners, Keith Schaefer and Megan Hill, asks the court to require the company to pay back wages.

In addition, the lawsuit alleges dairy employees have been living in "substandard housing" and allegedly face intimidation.

The lawsuit states the company systematically underreported the number of hours employees work on their paystubs, often shaving off 12 to 24 hours from each two-week pay period.

"Evergreen also frequently refuses to pay employees their outstanding wages once their employment with Evergreen has ceased," the lawsuit said.

"Evergreen further gouges its employees by making systematic, unlawful deductions from employee pay without first obtaining written authorization to do so from its employees as required by law. To ensure it can hire and retain sufficient workers in a region where rental housing is sparse, defendants also act as landlords and sell rental housing services to many of their employees. However, the homes' conditions are squalid, substandard, and do not meet Minnesota's standards for habitability."

The lawsuit said some housing is built onto or in barns "where tractors are stored and lack bedrooms with windows. Other properties lack heat, with employee tenants heating their rooms with space heaters. One rental home even lacks an on-site toilet, forcing employees to walk to a neighboring barn to use a toilet."

DTN's attempts to reach the central Minnesota company for comment were unsuccessful.

According to a news release from the Minnesota attorney general's office, the company allegedly "cultivated a workplace culture of fear, violence, and intimidation" and discouraged workers from complaining about their pay and housing through "threats of violence" and to call police.

"Attorney General Ellison further alleges Evergreen attempted to cover up its illegal practices by refusing to document most of its employment practices in writing, which is against the law," the AG's office said, "failing to provide employees with written information about how they are paid, which is also required by law; falsifying paystubs; and even destroying the timecards that they are required to keep by law that would show how many hours its employees actually worked."

The state alleges employees' housing situation violates health and safety standards.

"For example, some workers live in windowless 'bedrooms' with plywood walls, unfinished electrical sockets, and only space heaters for warmth," the AG's office said in a news release.

"Some employees live in housing with no onsite toilet. Other workers have lived in garages, haphazardly converted barns, and other buildings not fit for human habitation. Most of this rental housing appears to have severe insect infestations, pervasive microbial growth, and other health and safety issues."

In addition, the state alleges the company has violated employees' right to privacy by "conducting unannounced inspections of employee housing, including bedrooms."

The lawsuit also claims company employees often are moved to different properties arbitrarily.

"When Evergreen fires employees or employees quit, Evergreen frequently forces employee-tenants from their homes without notice and withholds their final paychecks," the AG's office said.

The lawsuit said that since Jan. 1, 2020, Evergreen employed at least 238 employees, and 161 of them quit or were fired. In addition, the state alleges the company made unauthorized deductions from employee paychecks.

"When they initially came to Minnesota and began working for Evergreen, most employees did not receive a paycheck from Evergreen for the first two weeks they worked," the lawsuit said.

"It was unclear to many employees the reason why they were not paid for their first two weeks of work."

Todd Neeley can be reached at todd.neeley@dtn.com

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