The West

California congressional candidate’s family farm walked out on $325,000 owed to workers

Former Rep. David Valadao’s family farm has not paid a $325,000 settlement it agreed to with workers who accused the farm of denying them minimum wage and overtime pay.

The case closed without payment to the workers in in April after the dairy declared bankruptcy, according to Santos Gomez, an attorney for the workers, and confirmed by Valadao’s campaign.

The Hanford Republican has said he was not involved with the day-to-day operations of the dairy while he served in the House of Representatives. Documents show Valadao signed for about $6 million in loans to the dairy while he held office.

Valadao lost his seat in 2018 to Democrat T.J. Cox of Fresno by fewer than 1,000 votes. Valadao in July filed paperwork to launch a 2020 campaign challenging Cox.

Valadao’s campaign characterized the workers’ lawsuit as “frivolous” in a written statement to McClatchy.

“No evidence supporting any claim was ever presented. The dairy settled the lawsuit for a fraction of what the cost would have been to litigate the case in an attempt to preserve jobs and keep the dairy open,” said Andrew Renteria, a spokesman for Valadao’s campaign.

The lawsuit underscores issues for Valadao he will encounter as he tries to retake his congressional seat. Like Valadao, Cox has a complicated financial history that includes a complaint over failing to pay wages to workers.

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Other candidates are unlikely to jump into the race at this point, according to Thomas Holyoke, a professor of political science at Fresno State, and voters in the district will likely have to “deal with two flawed candidates.”

“The winner will probably not come down to these candidates themselves, but to the presidential race,” Holyoke said. “People who dislike President (Donald) Trump will hold their nose and maybe vote for Cox, and on the opposite side people who like Trump or are Republican will hold their nose and vote for Valadao.”

A tossup congressional district

Democrats make up a plurality of the district, with about 43 percent of voters registered Democrat, 27 percent registered Republican and 26 percent registered as no party affiliation, according to 2019 figures with the California Secretary of State.

In the past, Valadao had consistently gotten large shares of the vote for a Republican in a district that favored 2016 Democratic presidential nominee Hillary Clinton by 15 points over Trump.

Valadao’s struggling farm has come up in past political campaigns. Political news outlet Roll Call in 2013 called him the poorest member of Congress as early as 2013 because of his business debts.

His family’s Triple V Dairy and Two Star Dairy were sued along with David Valadao by Rabobank in November 2017 over unpaid loans, which eventually led to Triple V going bankrupt. Documents show Valadao personally signed off on at least five loans totaling $6 million from Rabobank since he was sworn in as a congressman in 2013.

When Valadao’s congressional office was previously asked about those debts, a spokeswoman for him repeatedly said he could not be involved in the day-to-day operations of the farm due to congressional ethics. His last financial disclosure form as a candidate, filed in 2018, listed no value to the farm but income of more than $5 million. Before that, Valadao said his stake in the farm was worth between $1 million and $5 million.

The farm worker lawsuit against Triple V Dairy initially named Valadao’s uncle, Jose Valadao.

Daniel Padilla, who is identified as a non-exempt dairy worker for the dairies Triple V Dairy and Two Star Dairy, filed the lawsuit in March 2017. Padilla accused Valadao of withholding accurate wage statements and wages owed to him and other dairy workers, in violation of labor laws.

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Jose Valadao first attempted to deny the claims based on several defenses, including saying Padilla had never complained to dairy management that he wasn’t getting breaks or improper pay and that employees were always permitted to take meals and breaks, so if they did not do so it was by choice.

Jose Valadao, on behalf of the dairies, agreed to settle the issue in March 2018, denying wrongdoing but agreeing to pay $325,000 to the workers. But the attorney for Padilla, Santos Gomez, says none of it was ever paid due to the dairy filing for bankruptcy that spring.

Bankruptcy

Rabobank seized the Triple V Dairy last year and Valadao filed for bankruptcy protection this year, citing $13 million in business debts. On the bankruptcy filing, Valadao listed the $325,000 settlement on a section detailing lawsuits, court actions or administrative proceedings of which he was involved.

Valadao in the past listed two dairies on his financial disclosure forms, the Triple V Dairy and Valadao Dairy. He now only declares the Valadao Dairy on his assets.

He said on his 2019 candidate filing that he has earned $30,000 from the Valadao Dairy so far this year.

He does not claim a stake in the Two Star Dairy, the other farm involved in the wage lawsuit.

Valadao’s 2020 opponent, Cox, has faced scrutiny over his finances since taking office in January. He failed to disclose all of his business interests, and had to revise financial statements.

This year, he settled a complaint about wages one of his businesses owed to workers since 2015.

The mining company workers complained to the British Columbian government, which placed liens on his property in another Canadian territory. When McClatchy reported on the money he owed to employees, based on the financial disclosure Cox filed in August, his campaign provided documents showing the money had been paid just days before the financial disclosure was due.

Holyoke, the professor at Fresno State, said this would be a “hard choice” for district voters in 2020.

“This is why American voters have become increasingly cynical,” Holyoke said.

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Kate Irby is based in Washington, D.C. and reports on issues important to McClatchy’s California newspapers, including the Sacramento Bee, Fresno Bee and Modesto Bee. She previously reported on breaking news in D.C., politics in Florida for the Bradenton Herald and politics in Ohio for the Cleveland Plain Dealer.
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