Castro Valley Winery to Government: Crush Grapes, Not Vintners

Debra J. Saunders
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Posted: Sep 21, 2014 12:01 AM
Castro Valley Winery to Government: Crush Grapes, Not Vintners

"You'll never meet anyone who says, 'I want to be a millionaire. I think I'll start a winery,'" owner Bill Smyth tells me from his small office over the tasting room of Westover Vineyards, nestled in Palomares Canyon. Smyth has worked in a number of fields. He made some money. He bought the vineyard property when he was young. His ex-wife bought him a kit to make wine, and his labor of love turned into a small business.

Now, thanks to heavy-handed California regulators, he's selling off his ports and boutique wines and turning his winery back into a home.

In July, California Department of Industrial Relations officials showed up at Westover Vineyards and slapped Smyth with $115,550 in fines, back wages and penalties. His bad: Like many other East Bay wineries, Westover benefits from the labor of volunteers to help with winemaking and pouring. Smyth offers a free course in winemaking; he says participants are free to help out or not. He has a legal form for volunteers. It reads: "I am donating my labor free by choice."

We're not talking about teens being pressed into grueling labor in hot fields. As one who enjoys the fruit and neighborhood feel of Livermore Valley wineries, I've met both volunteers and employees who started as volunteers. They tend to be middle-aged professionals who want a piece of the oenology dream.

Meteorologist Phil Vogt volunteered at Westover for three years. "It was a fantastic thing," he told me. He hoped to take up winemaking when he retired. He didn't want to be paid; it wasn't a job. He tried to return the check he received for back wages, but that, too, was illegal.

"I was not doing it to make money," Vogt added. "I have a day job that pays quite well. I was doing it to learn." His hobby, it turns out, is against the law. Vogt is not sure what he'll do next. Maybe he should take up robbing banks.

Smyth tells me investigators first visited Westover in July. On the spot, they handed him notices that he had violated the state's minimum wage law and wage reporting requirements and had to pay fines to the state, as well as back wages. No official had called him beforehand. The $115,550 came without warning for a business that grosses some $200,000 annually, nets $11,000 and is open to the public a mere 10 hours per week.

What prompted state scrutiny? Smyth suspects a "disgruntled person" who, he insists, was not a volunteer at the time of disgruntlement. He would not elaborate.

He only knows that he cannot stay in business if he has to pay the state and former volunteers the equivalent of 10 years' profit. Regulators could have sent him a cease-and-desist order. They could have fined him and made him pay back wages for anyone who complained. Instead, the state went big casino.

Department of Industrial Relations spokeswoman Erika Monterroza told me the labor code dictated the penalty. Smyth could have appealed, but he only appealed a $30,000 damage assessment. What public interest is served here? "I don't think there is public interest in putting this gentleman out of business," Monterroza answered. "But in situations where businesses are not paying their workers, it's in violation of the law." Wineries that pay people have to compete with vintners staffed by volunteers.

Assemblyman Bob Wieckowski went to kindergarten with Smyth. He plans to sit down with Department of Industrial Relations Director Christine Baker. "The state has an interest to make sure that people aren't exploited, and they should be paid," Wieckowski told me. That said, he's not sure the state needs to intervene in business-killing fashion for "some retiree from the Livermore Labs who wants to learn how to make port." Yet that is what the law says. Any scheme that would allow the state to pick which businesses are worthy of exemption and which are not has problems, too.

Here's a radical idea: California could allow adults to make adult decisions, such as whether they want to be volunteers. If they don't want to, they don't have to.

I watch as Smyth sells three heavily discounted cases to Livermore Realtor Cindy Williams, who called ahead to make an emergency pickup for a party. Is Smyth really going to close shop? If the state reduced what he has to pay to the $29,375 he already has paid in back wages, Smyth shrugs, the economics could work out. But it is not going to happen.

Smyth cannot believe that the state has the authority to outlaw a consenting relationship between adult wine lovers and a winemaker. And what of the romance of the grape? Smyth's wife, Jill, started as a volunteer. Now, he confides, "they've taken the love and the passion out. They're making it a job."