|Hearings Unit: Final Order
BEFORE THE COMMISSIONER
OF THE BUREAU OF LABOR AND INDUSTRIES
OF THE STATE OF OREGON
In the Matter of
TOMAS O. BENITEZ, dba TOMAS BENITEZ FARM LABOR CONTRACTOR,
Case Number 09-96
FINDINGS OF FACT
ULTIMATE FINDINGS OF FACT
CONCLUSIONS OF LAW
Where Respondent failed to pay his tax liabilities in compliance with federal and state laws and owes in excess of $100,000.00 in taxes, fees, and assessments to various government agencies and has demonstrated by his repeated failure to satisfy outstanding judgments that he lacks the character, competence and reliability necessary to act as a farm labor contractor, the Commissioner denied Respondent a farm labor contractor license, pursuant to ORS 658.420.
The above-entitled contested case came on regularly for hearing before Linda A. Lohr, designated as Administrative Law Judge (ALJ) by Jack Roberts, Commissioner of the Bureau of Labor and Industries for the State of Oregon. The hearing was held on November 14, 1995, in the Bureau of Labor and Industries conference room of the State Office Building, 165 East 7th Avenue, Eugene, Oregon.
The Bureau of Labor and Industries (the Agency) was represented by Alan McCullough, an employee of the Agency. Tomas O. Benitez (Respondent) was present throughout the hearing and not represented by counsel.
The Agency called as witnesses Julye Robertson, Administrative Specialist for the Wage and Hour Division Licensing Unit (by telephone), Nedra Cunningham, Compliance Manager for the Wage and Hour Division Farm Labor Unit (by telephone), Eduardo Sifuentez, Compliance Specialist, Wage and Hour Division, Michael Henderson, Revenue Agent for the Oregon State Employment Department (by telephone).
Respondent called his wife, Paula Benitez, and himself as witnesses. Vicky Guillen, appointed by the Forum to act as interpreter for Respondent, was present, but did not act as interpreter for Respondent who the Forum determined at hearing was able to participate in fluent English.
Having fully considered the entire record in this matter, I, Jack Roberts, Commissioner of the Bureau of Labor and Industries, make the following Findings of Fact (Procedural and on the Merits), Ultimate Findings of Fact, Conclusions of Law, Opinion, and Order.
FINDINGS OF FACT -- PROCEDURAL
1) On July 14, 1995, the Agency issued a Notice of Proposed Refusal to Renew a Farm Labor ContractorÂ´s License (Notice) to Respondent. The Notice informed Respondent that the Agency intended to refuse to renew RespondentÂ´s farm labor contractor license, pursuant to ORS 658.445(3) and OAR 839-15-520(3)(d). The Agency based its action on RespondentÂ´s alleged failure to comply with federal, state or local laws or ordinances relating to the payment of income taxes, unemployment compensation tax, and other taxes, fees, or assessments by owing $124,835.32 to the IRS, Oregon Department of Revenue, Oregon Department of Employment, and Marion County, Oregon in unpaid taxes and fees, in violation of OAR 839-15-520(3)(d). The Agency included with its Notice a document in Spanish referencing the Notice and the necessity of an answer and a Spanish version of the Notice of Contested Case Rights and Procedures. (Exhibits X-2, X-3, X-4)
2) The charging document with its attachments in Spanish were served on Respondent by certified mail on July 17, 1995. (Exhibit X-2)
3) By letter dated September 9, 1995, Respondent requested a hearing on the AgencyÂ´s intended action and submitted his answer in English. In his answer, Respondent admitted the allegations and suggested mitigating circumstances which included assertions that he was on a payment plan with his creditors. (Exhibit X-6)
4) On September 28, 1995, the Agency requested a hearing from the Hearings Unit. (Exhibit X-1)
5) On October 5, 1995, the Hearings Unit issued to Respondent and the Agency a Notice of Hearing, which set forth the time and place of the requested hearing. With the hearings notice, the Hearings Unit sent to Respondent a Notice of Contested Case Rights and Procedures containing the information required by ORS 183.413, and a complete copy of Oregon Administrative Rules (OAR) 839-50-000 to 839-50-420, regarding the contested case process. (Exhibit X-7)
6) On November 3, 1995, the ALJ issued a discovery order in Spanish and in English to the participants directing them each to submit a summary of the case, including a list of the the witnesses to be called, and the identification and description of any physical evidence to be offered into evidence, together with a copy of any such document or evidence, according to the provisions of OAR 839-50-210(1). The summaries were due by November 10, 1995. The Agency filed its case summary prior to the issuance of the discovery order. Respondent did not file a case summary. (Exhibits X-8; X-9; X-10; Statement of the ALJ)
7) In a pre-hearing conference, the Forum determined that Respondent was able to speak and understand English and would not need an interpreter. (Statement of the ALJ)
8) At the start of the hearing, Respondent said he had received and understood the Notice of Contested Case Rights and Procedures and had no questions about it. (Statement of Respondent)
9) Pursuant to ORS 183.415(7), the ALJ explained the issues involved in the hearing, the matters to be proved or disproved, and the procedures governing the conduct of the hearing. (Statement of the ALJ)
10) On January 31, 1996, the Hearings Unit issued a Proposed Order in this matter. Included in the Proposed Order was an Exceptions Notice that allowed ten (10) days for filing exceptions. The Hearings Unit received no exceptions.
FINDINGS OF FACT -- THE MERITS
1) Respondent, a sole proprietor, was a licensed farm labor contractor between February 9, 1994, and February 28, 1995, during which time he did business as Tomas Benitez Farm Labor Contractor. (Exhibit A-1)
2) On April 8, 1994, Respondent filed a form WH-152 pursuant to OAR 839-15-350 notifying the Agency that between March, 1994, and October, 1994, Respondent had agreements with several farmers to provide crews for strawberry, squash, and garlic harvesting, hoeing and irrigation, tree and crop planting, and Christmas tree harvesting, and that his harvest crew consisted of 20 to 30 workers. (Exhibit A-18; Testimony of Cunningham)
3) By letter dated August 9, 1994, Compliance Manager Cunningham advised Respondent that his license was in jeopardy due to an outstanding judgment for $4,472.72 recorded by the Employment Department against Respondent. The letter read, in part:
"ORS 658.445 states, Â´The Commissioner of the Bureau of Labor and Industries may revoke, suspend or refuse to renew a license to act as a labor contractor if, (3) The licenseeÂ´s character, reliability or competence makes the licensee unfit to act a [sic] farm labor contractor.Â´ OAR 839-15-145(1) states, Â´The character, competence and reliability contemplated by ORS 658.405 to 658.475 and these rules include, but are not limited to, consideration of: (d) Whether a person has unsatisfied judgments or felony convictions.Â´ ". . .
Cunningham sent a second and final warning letter dated October 27, 1994, to Respondent which reiterated the need for Respondent to cure the judgment either by paying it off or by entering into a payment plan to do so. Respondent did not respond to either letter. (Exhibits A-3, A-4; Testimony of Cunningham)
"You must provide one of the following on or before AUGUST 24, 1994: 1. Written evidence that you have satisfied the judgment, or 2. Entered into a payment plan to satisfy the judgment (failure to make payments as per the plan could result in license revocation, ORS 658.445 and OAR 839-15-145(1)(b)).
"Note: Failure to provide the information required above may result in the . . . refusal to renew your license, if you are currently licensed."
4) On February 24, 1995, Respondent made application for a renewal of his farm labor contractorÂ´s license which was due to expire on February 28, 1995. In response to question # 21* on the application form, Respondent wrote, "Yes, we have filed Chapter 13. Which is 100% payable every bill we owe will be paided [sic] in full in over the next 3 yrÂ´s with this plan." (Exhibit A-2; Testimony of Robertson and Cunningham)
5) Respondent filed a bankruptcy petition in June of 1994. At the time of his bankruptcy petition, RespondentÂ´s total liabilities exceeded $100,000.00. Proofs of claim were filed by RespondentÂ´s creditors showing that Respondent owed $94,240.38 to the Internal Revenue Service for back taxes, $21,921.22 to the Oregon Department of Revenue for back taxes, $4,681.91 to the Oregon Employment Department for employment taxes owed, and $19,334.90 to SAIF Corporation for unpaid workersÂ´ compensation insurance and fees owed between April, 1990 and June, 1994. Respondent reported his gross business income for the 12 months prior to filing his petition as $91,290.00. (Exhibits A-8, A-9, A-14, A-15, A-16, A-17)
6) Respondent was unable to comply with the Chapter 13 plan to pay off his debts and moved to dismiss the bankruptcy proceeding. His Chapter 13 case was dismissed by the bankruptcy judge on April 27, 1995. (Exhibits A-10, A-11, A-12; Testimony of Respondent; Testimony of P. Benitez)
7) In March, 1995, Respondent entered into a post-petititon agreement with the Oregon Employment Department to pay off amounts due on employment taxes after the bankruptcy filing date. RespondentÂ´s payments under the payment schedule were sporadic and shortlived. For the duration of RespondentÂ´s bankruptcy case and since its dismissal, the Employment Department has received a total of $700.00 for amounts covered under both the Chapter 13 plan and the post-petition agreement. Respondent currently owes the Employment DepartmentÂ´s Unemployment Compensation Trust Fund $6,390.70 for three outstanding judgments (also known as warrants) dating from September, 1992, to June, 1995. (Exhibits A-5, A-6, A-7; Testimony of Henderson; Testimony of P. Benitez)
9) Since the dismissal of his bankruptcy case and at the time of hearing, RespondentÂ´s obligations to the IRS, Oregon Department of Revenue, Oregon Employment Department, SAIF Corporation, and other creditors exceed $100,000.00. (Testimony of Respondent; Entire record)
10) Between February, 1994, and February, 1995, Respondent did the payroll on only one farm labor contract. His workers were paid directly by the farmers on all other contracts. (Exhibit A-2; Testimony of Respondent)
11) Some of RespondentÂ´s debts accrued before he was licensed in February, 1994. After he was licensed in February, 1994, Respondent continued to amass federal and state income tax, unemployment compensation tax and various other business related taxes, fees and assessments. Respondent puchased a video store and relied on his wife to handle the finances for both the video and farm labor businesses. His wife was responsible for tax related payments and the payroll. Respondent knew that the various taxes were not being paid, but did not know that interest and penalties were accruing. Some of the money he made from farm labor contracts was used for video store expenses. Based on advice from the IRS, Respondent filed a Chapter 13 bankruptcy petition in June of 1994. He cannot read or write and was dependent on his wife to handle business related matters, including the payment agreements made during and after the bankruptcy proceedings were voluntarily dismissed. Respondent blames, in part, the seasonal nature of farm labor work and the unpredictability of the weather for his inability to keep up payments on his judgments. RespondentÂ´s work experience is limited to farm labor and without a farm labor license he foresees an inability to pay his current obligations. (Testimony of Respondent; Testimony of P. Benitez)
12) Prior to receiving his license, Respondent passed the farm labor contractor examination administered by the AgencyÂ´s licensing unit. He took the exam in Spanish and was assisted by his wife. (Testimony of Respondent)
ULTIMATE FINDINGS OF FACT
1) During times material herein, Respondent was a farm labor contractor licensed by the Bureau of Labor and Industries between February 9, 1994, and February 28, 1995.
2) At material times herein, Respondent failed to pay $94,240.38 in taxes to the Internal Revenue Service.
3) At material times herein, Respondent failed to pay $21,921.22 in taxes to the Oregon Department of Revenue.
4) At material times herein, Respondent failed to pay $6,390.70 on three judgments to the Oregon Employment Department for unpaid employment taxes.
5) At material times herein, Respondent failed to pay $19,334.90 to SAIF Corporation for workersÂ´ compensation insurance taxes and fees.
6) At material times herein, Respondent entered into both a Chapter 13 bankruptcy plan and a post-bankruptcy petition plan with the Oregon Employment Department to satisfy the amounts he owed to various governmental agencies and failed to make the payments required under each plan.
CONCLUSIONS OF LAW
1) The Commissioner of the Bureau of Labor and Industries of the State of Oregon has jurisdiction over the subject matter and of the person herein. ORS 658.405 to 658.485.
2) ORS 658.445 provides that the Commissioner of the Bureau of Labor and Industries "may revoke, suspend or refuse to renew a license to act as a labor contractor upon the commissionerÂ´s own motion or upon complaint by any individual, if:
" * * *
OAR 839-15-145(1) provides, in part:
"(3) The licenseeÂ´s character, reliability or competence makes the licensee unfit to act as a farm labor contractor."
"The character, competence and reliability contemplated by ORS 658.405 to 658.475 and these rules includes, but is not limited to, consideration of:
OAR 839-15-520(2) provides:
" * * *
"(d) Whether a person has unsatisfied judgments * * *. "
"[w]hen the applicant for a license or a licensee demonstrates that the applicantÂ´s or licenseeÂ´s character, reliability or competence makes the applicant or licensee unfit to act as a Farm or Forest Labor Contractor, the Commissioner shall propose that the license application be denied or license of the licensee [not be renewed.]"
OAR 839-15-520(3)(d) provides, in part:
"[f]ailure to comply with federal, state or local laws or ordinances relating to the payment of wages, income taxes, social security taxes, unemployment compensation tax or any tax, fee or assessment of any sort" demonstrates that the "applicantÂ´s or licenseeÂ´s character, reliability or competence make the applicant or licensee unfit to act as a Farm or Forest Labor Contractor."
RespondentÂ´s unsatisfied judgments involving the failure to pay unemployment compensation tax, federal and state income taxes, and other taxes, fees, and assessments in compliance with state and federal law demonstrate RespondentÂ´s unfitness to act as a farm labor contractor. Under the facts and circumstances of this record, and according to the applicable law in this matter, the Commissioner of the Bureau of Labor and Industries has the authority to refuse to renew and may deny a license to Respondent to act as a farm labor contractor.
The Agency proposed to refuse to renew RespondentÂ´s farm labor contractor license based on RespondentÂ´s failure to comply with federal and state laws related to the payment of income taxes, unemployment compensation taxes and other taxes, fees, and assessments which demonstrate that RespondentÂ´s character, competence or reliability make him unfit to act as a farm labor contractor. Respondent admits that he has not paid his tax liabilities in compliance with state and federal law. He also admits that the amount he owes various state and federal agencies exceeds $100,000.00 and that his sporadic attempts to make payments have failed.
Though his demeanor at hearing was penitent, Respondent failed to convince this Forum that he has the character, competence or reliability to act as a farm labor contractor. Respondent asks the Forum to take into account his lack of education, his reliance on his wife to operate the financial arm of his business, and the seasonal nature of his work which renders him unable to make payments on the multiple judgments. In light of the ongoing and considerable debt Respondent owes as a result of his failure to comply with state and federal law, those factors tend to enhance rather than negate the risk he poses to potential farm workers should his license be renewed. It is incumbent upon farm labor contractors to meet their financial obligations, particularly those imposed by law. The purpose of the farm labor contracting statutes - to protect the workers - is frustrated where contractors fail to meet their statutory obligation to pay income and unemployment compensation taxes. By failing to meet his tax obligations and allowing the debts to accrue over time resulting in substantial judgments, Respondent seriously jeopardizes his ability to meet a farm labor payroll. That Respondent invested some of his farm labor contracting earnings in a video store enterprise and reportedly grossed over $90,000.00 in the year prior to June, 1994, suggests that his difficulty in meeting his tax obligations has little to do with the seasonal nature of his business, the predictability of the weather, or RespondentÂ´s education level. Establishing the ability to comply with state and federal laws relating to the payment of wages and taxes is elemental in farm labor contractor licensing and Respondent has demonstrated that he cannot be depended on to meet the financial obligations imposed on him by law.
This Forum has consistently held that where the licensee demonstrates that his/her character, reliability or competence makes the licensee unfit to act as a farm labor contractor, the Commissioner may refuse to renew the license. In the Matter of Jose Linan, 13 BOLI 24 (1994); In the Matter of Alejandro Lumbreras, 12 BOLI 117 (1993); In the Matter of John Mallon, 12 BOLI 92 (1993); In the Matter of Clara Perez, 11 BOLI 181 (1993); In the Matter of Efrain Corona, 11 BOLI 44 (1992). Respondent has produced no evidence that he is fit to act as a farm labor contractor. The Forum finds that the great weight of the evidence on the record shows that Respondent does not have the necessary character, competence or reliability to act as a farm labor contractor and the order below is an appropriate disposition of RespondentÂ´s application for renewal of his license.
NOW, THEREFORE, as authorized by ORS 658.405 to 658.503, the Commissioner of the Bureau of Labor and Industries hereby denies TOMAS O.BENITEZ, dba TOMAS BENITEZ FARM LABOR CONTRACTOR a license to act as a farm labor contractor, effective on the date of the Final Order. TOMAS O.BENITEZ is prevented from reapplying for a license for three years from the date of denial, in accordance with ORS 658.415(1)(c) and OAR 839-15-140(3) and 839-15-520(4).
DATED this _______ day of ______________________, 1996.
Bureau of Labor and Industries
Pursuant to ORS Chapter 183, you are entitled to judicial review of this Final Order. To obtain judicial review, you must file a Petition for Judicial Review with the Court of Appeals in Salem, Oregon, within sixty (60) days of the issuance of this Order.
If you file a Petition for Judicial Review, YOU MUST ALSO SERVE A COPY OF THE PETITION FOR JUDICIAL REVIEW ON THIS AGENCY AT THE FOLLOWING ADDRESS:
Bureau of Labor and Industries
State Office Building, Ste. 1005
800 NE Oregon Street, # 32
CERTIFIED TO BE A TRUE AND CORRECT COPY OF THE ORIGINAL AND OF A WHOLE THEREOF
The Commissioner of the Bureau of Labor and Industries can adopt all or any part of this Proposed Order in the Final Order. The Commissioner may provide in the Final Order for a different determination of liability, damages, means of enforcement, or, where appropriate, penalties than are set forth in this Proposed Order.
Pursuant to ORS Chapter 183, and OAR 839-50-380, you are entitled to file exceptions to this Proposed Order. To be considered, exceptions must be filed within ten (10) days from the date of issuance of this Proposed Order.
THEY MUST BE FILED AT THE FOLLOWING ADDRESS:
Bureau of Labor and Industries
1005 State Office Building
800 NE Oregon Street, #32
Portland, Oregon 97232-2162
CERTIFIED TO BE A TRUE AND CORRECT COPY OF THE ORIGINAL
AND OF A WHOLE THEREOF.