Hinael Nieto, left, worked for Monterey Mushrooms in Royal Oaks for 44 years until the facility closed in December. He talks to a job recruiter at a county-led event Dec. 12 in Watsonville. (Fidel M. Soto — Santa Cruz Local)

Factors in the closure included maintenance costs of a 275-acre facility and buildings more than 50 years old, according to a statement from Monterey Mushrooms. The decision to shutter the facility and lay off 605 people was “extraordinarily difficult,” said Monterey Mushrooms representative Bruce Knobeloch. About 70 employees were offered positions at the company’s Morgan Hill site.

“We made the decision after a long, long review that we just couldn’t any longer operate this facility profitably and made the decision to close it. And it was a hard decision that impacted a lot of lives, but it was one that we had to make,” Knobeloch said.

“The overall business requirements, regulatory requirements to be able to operate in the state and the county, from an ag perspective, in a facility that’s aging, it just became more and more difficult,” he said. He declined to comment on which regulatory requirements were an issue.

Monterey Mushrooms has paid out millions in recent years to settle lawsuits for polluting waterways, including a $1.2 million payment related to pollution in Elkhorn Slough in 2017. 

“We’ve spent millions of dollars in improving facilities to be able to address the concerns that were raised,” Knobeloch said. The lawsuits and settlements were not a factor in closing, he said.

About 400 workers at the Royal Oaks facility were represented by United Farm Workers and are expected to receive an average severance pay of $600 to $900, said Antonio De Loera, a United Farm Workers representative.

At least nine claims related to wage theft have been lodged against Monterey Mushrooms in California since 2016, though several claims were dismissed, state records show.

The mushroom pickers will receive up to $3,000 to settle a wage theft dispute, De Loera said. Workers alleged that the company paid less than what was owed for the weight of some boxes of picked mushrooms. UFW secured $235,000 for payouts to those workers, De Loera said.

Knobeloch declined to comment on the wage disputes.

Some of the hundreds of Monterey Mushrooms employees who were laid off in December learn about job training and unemployment benefits at a county event in Watsonville. (Fidel M. Soto – Santa Cruz Local)

‘Good union jobs’

De Loera said the closure of the facility was a “loss of good union jobs.” Many employees had worked there for much longer than usual for agricultural jobs, he said.

“For a lot of these workers, because it was such a good job, their whole careers were spent working here,” he said. “It is a workforce where there was a level of seniority that is just really unique in U.S. agriculture. There’s usually much more turnover.”

The longevity of the jobs allowed some to accumulate benefits, raises and pensions through the union, he said. The pensions are secure, he said, including for undocumented workers. “Every cent is going to be there for these workers when they retire,” De Loera said

Federal law requires employers inform workers 60 days before a mass layoff and notice be given to state and federal representatives. Monterey Mushrooms filed the notice with the state in September.

Suriano, the former employee, said the closure came as a shock. 

“It was a surprise for us from the very first moment we were told that there would be no more work,” he said. “There were not enough explanations why.”

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