Dozens of interviews show hidden perils
at Colorado Mushroom Farm, which sold produce at Whole Foods and King Soopers before going bankrupt
By Shannon Najmabadi | Colorado Sun
FOR decades, a mushroom farm in the San Luis Valley was celebrated as a major employer that gave an economic future to Guatemalans who fled civil war in the 1980s.
Its manager, Baljit Nanda, was described as a “mushroom magnate.” Button, crimini and portobello mushrooms — grown, plucked and packaged by migrant workers laboring in a 10-acre metal warehouse northeast of Alamosa — were sold to grocery stores like Whole Foods and King Soopers.
But when the farm quietly closed last year, it owed thousands of dollars in unpaid wages to employees, some of whom were injured on the job and subjected to unsafe working conditions, according to more than a dozen interviews with former employees, their family members and community advocates.
Baljit Nanda says the 10-acre Colorado Mushroom Farm northeast of Alamosa was hit hard by the pandemic, but says his employees were always paid and that working conditions were safe. (9News Denver)
A couple from Guatemala who had worked at Colorado Mushroom Farm say their wages stayed the same for over 20 years. (Olivia Sun, The Colorado Sun via Report for America)
One woman was struck by a forklift while working at the farm. Another had her finger amputated after her hand was caught in equipment. Laborers and at least one vendor were paid with checks that bounced. When some employees confronted a manager at Colorado Mushroom Farm last year, he threatened to call immigration authorities
The farm filed for bankruptcy in December, citing $100,000 or less in assets and $10 million to $50 million in liabilities. Some of the former workers are undocumented, leaving them little recourse to pursue lost wages or compensation for workplace injuries.
“All the families .are victims — my family and my kids, other families and their kids,” said Juan Mejia, who worked at the mushroom farm until June 8, operating heating and cooling systems that kept conditions ideal for growing mushrooms. “There’s no way this can happen in the United States.”
The farm had been a major employer in Alamosa — at its best, contributing $15 million a year to the local economy, Nanda said. Employees earned above average wages for the region. And unlike other agricultural work, employees could pick and package produce indoors and year-round. Community leaders said mushroom farm officials allowed worker advocates into their facility, and donated money or goods to local organizations.
“It was a good place to work for,” said Lucia Gaspar, who worked at the mushroom farm for a few years starting in 2009.
Despite the farm’s troubled history, some former employees are considering taking over the operation as a worker cooperative. Rocky Mountain Employee Ownership Center expects to produce a feasibility study for the former workers in January or February.
Many of the mushroom growers and pickers came from Santa Eulalia, a mountainous town in northwestern Guatemala, and are part of the same Mayan tribe, offering them a sense of community. Other workers had been hired from Mexico.
Growing supervisor Esteban Lucas, 47, said he earned $80,000 at the mushroom farm — and now makes $14 an hour at Arby’s. He loved working at the farm and said most of the former workers want to return.
“Most of the people, they work 10, 15, 20 years in this (mushroom farm). They buy their own house. They have a good life,” he said. “But now, after the farm is closed, the people — they find other jobs but they don’t make the same money.”
“Stealing from the low-income people, that’s very low.”
— Juan Mejia, who worked at the mushroom farm until June
(Olivia Sun, The Colorado Sun via Report for America)
Record of unsafe working conditions
Nanda suggested allegations of unsafe working conditions or lack of pay came from a small number of “complainers” and that the claims were “inaccurate, embellished” or in need of explanation.
Injuries were investigated and typically deemed to be “human error,” he said, “when a worker did not follow the instructions or violated rules.”
Nanda also denied the farm had unsafe conditions and said it was “not true” that a manager threatened to call immigration authorities on workers. There would be no need, he said, because the farm didn’t hire undocumented workers.
“The farm employee I-9 files have been periodically inspected by (the) Department of Homeland Security (DHS) and have not found a single violation. The last review was performed in 2021,” he wrote in an email, after a reporter tried to reach him at his home near Denver. “Under my management, the employees were always treated with dignity and respect.”
Workers at mushroom farms near Vale, Oregon, have also accused Nanda of not paying them overtime for their work, which averaged 45 to 90 hours a week.
Federal records show the Alamosa farm’s facility left employees at risk of being burned, shocked, electrocuted, or falling, due to the lack of effective guardrails on a mezzanine in a maintenance area, and a corroded and broken ladder. In 1993, there was no evacuation plan and exits were not clearly marked. In 2015, the structural integrity of concrete panel walls, a concrete roof and steel beams had not been verified after they’d been damaged, leaving workers vulnerable to being crushed, according to the Occupational Safety and Health Administration. A large hole in the roof leaked water, according to former workers and photos reviewed by The Colorado Sun.
Videos from inside the farm show rows of wooden pallets — filled with compost and sprouting white mushrooms — stacked on top of each other in dark grow rooms. Workers weigh and pack mushrooms into cartons, sending them down conveyor belts to be sealed, labeled and moved into cardboard boxes. Mounds of shredded compost material, nearly reaching the ceiling, are spit out by a machine. Some of the rooms are dark, with heavy machinery.
“We try to simulate a cave-like environment with slow-moving air,” business manager Don Clair said, in a 2004 interview.
In 2001, at least three employees at the farm were exposed to high levels of carbon monoxide — averaging six to nine times the recommended limit over an eight-hour period.
In 2003, an employee fell onto the conveyor chain and was killed.
And in 2020, the state of Colorado sued the farm because tap water consumed by employees contained high levels of arsenic — a violation they had been told to correct as early as 2011. After months of unsuccessful negotiations, the state in November 2022 asked a judge to order the farm to pay $25,003.42 for unaddressed problems, including poor sanitary conditions that could leave the farm “vulnerable to contamination” and outbreaks of waterborne disease.
The company provided bottled water and instructed workers not to drink the water, Nanda said, but employees interviewed by The Sun said they were not aware that arsenic was present.
Over time, workers who consume high levels of arsenic can be at risk of skin damage, circulatory problems, and increased risk of cancer. Prolonged exposure to carbon monoxide can cause nausea, dizziness, unconsciousness and death.
Trace Larson, the coroner for Alamosa County, said there have been no deaths at the mushroom farm since he joined the office four years ago.
Some of the farm’s workers have been unable to find new jobs since the Alamosa facility stopped operating. Others have found work as housekeepers, cutting trees or on local potato farms. Inability to travel long distances for work and language barriers — many speak Qʼanjobʼal, a dialect spoken in Guatemala and southern Mexico — make finding new employment difficult.
The San Luis Valley Immigrant Resource Center and other nonprofits have passed out boxes of food to the farm’s workers since the farm closed down and provided help paying for rent and utilities.
Mejia, the former worker, stopped being paid by the farm around February and estimates he is owed $6,000 to $7,000. He took classes and found another job last summer providing asbestos abatement at a military base in Colorado Springs. But he had to take out an $8,000 loan and move away from his teenage daughters, one of whom wanted to finish high school in Alamosa. Half the loan went to rent, and the rest to cover basic expenses like food, gas and school supplies for his daughters, he said.
“I got educated. I got a good job. I got good pay. My kids don’t worry about money anymore,” said Mejia, who still believes “rule of law” in the U.S. will prevail and he’ll get his back wages. “Thank God my oldest kid is almost 19 now, so she’s helping with the little one.”
He grew emotional as he talked about his children, who come up to visit him on the weekends.
“Stealing from the low-income people,” he said, “that’s very low.”
The San Luis Valley Immigrant Resource Center and other nonprofits have donated food, supplies and other resources to workers since the mushroom farm closed. (Olivia Sun, The Colorado Sun via Report for America)
History of financial troubles
The farm has a history of financial problems and worker complaints.
In 1996, the farm’s 235 Guatemalan and Mexican workers threatened to strike, saying their wages — 15 cents per pound of mushrooms picked, or $7 to $8 an hour — hadn’t been raised in 10 years. About a decade later, workers tried to strike again, in part over labor conditions, said Flora Archuleta, executive director of the San Luis Valley Immigrant Resource Center.
The farm filed for bankruptcy in 2012. Nanda took on a more active role when it reopened in 2014. He said in testimony at the time that he intended to turn the operation around.
“I came out of retirement in 2014 to start up the closed farm at the request of the Guatemalan and Mexican workforce who had been working at the farm and lost their high-earning jobs,” he told The Sun. He’d managed the farm before, from 1985 to 2009.
But the pandemic decimated agricultural businesses, including the mushroom farm. It lost more than $5 million between 2020 and 2021, due to restaurant closures and COVID-19 outbreaks among farm workers in May 2020 and January 2021, Nanda said.
A project to replace the warehouse’s 40-year-old equipment was postponed due to the pandemic’s disruption of supply chains. By 2022, managers temporarily closed the farm because its aging equipment was breaking down so often, Nanda said.
On Dec. 21, the day Nanda was scheduled to be deposed in one long-running lawsuit brought by Rabo Agri-Finance, lawyers called for a pause in the proceedings because the mushroom farm had filed for Chapter 11 bankruptcy.
The farm owes nearly $4.4 million to its 20 largest creditors, the most to Missouri-based Rabo Agri-Finance ($935,190.29) and the Internal Revenue Service ($882,795.84). It also owes $357,634.53 to the Colorado Department of Revenue, $242,606.34 to the Alamosa County Treasurer, $46,201.44 to Colorado and Kansas health system Centura Health and $130,117.36 to Clair, the manager.
The farm received $1.7 million in Paycheck Protection Program loans, which were forgiven. It also applied for a $2 million Economic Injury Disaster Loan from the Small Business Administration to cover the cost of farm improvements, Nanda said. It’s not clear if that was granted.
Nanda said the farm’s investors and managers remain committed to refinancing the farm, completing the equipment overhaul and taking “care of all its obligations.”
Clair could not be reached. A representative for Rabo Agri-Finance, a lender specializing in the food and agriculture industry, declined to comment.
Warnings to workers are posted on the doors at Colorado Mushroom Farm, including one that says checks are not available until 2 p.m. on payday. Some workers shared photos of messages written on whiteboards inside on a payday in April that said “No Checks Today.” (Olivia Sun, The Colorado Sun via Report for America)
Conditions deteriorated after 2012
Working conditions deteriorated after the farm first filed for bankruptcy in 2012.
By 2022, bathrooms and equipment at the facility outside Alamosa were filthy. Workers toiled in near darkness, and used their own money to purchase headlamps, batteries and gloves. They weren’t reimbursed. Pregnant women were among the workers who climbed stacks of planting beds, some 8-feet high, to pick mushrooms. Some people fell. Injured employees were not reimbursed for medical care or paid as they stayed home to recover, multiple former employees said.
Mejia said he always returned to his house to use the toilet. He called the cops once when his manager told him to go into part of the facility marked with a big warning sign: “DANGER PESTICIDES,” it said, according to a photo he took. “KEEP OUT NO ENTRE.”
Around April 30, 2021 — payday — he took another photo of a whiteboard that signaled workers wouldn’t be receiving their wages: “NO CHECKS TODAY,” it said.
Juan Daniel González, a packer and former supervisor at the farm, recalled numerous instances when mushroom pickers fell from the soil beds, breaking or injuring their ribs, legs or shoulders, and two people who lost all or part of a finger. He was working when a woman was struck by a forklift.
“They never give us good training or they don’t put (up) the signs — like ‘forklift in that area,’” said González, who worked at the farm for about 17 years.
“Inside of the building, we have a lot of problems. The machines, they don’t work. We don’t have the parts,” he added. “The lunch area, when we have a lot of snow, it starts leaking.”
Gaspar, who now works part-time at Los Promotores del Valle de San Luis, where she advocates for mushroom farm employees and other agricultural workers, was one of the workers who climbed up planting trays to pick mushrooms while she was pregnant. She also remembers waiting for an ambulance to come after a woman was struck by a forklift.
“‘Oh my gosh, how could this happen?’” Gaspar remembers thinking, as she saw the woman laying on the ground after being hit.
“It’s not safe,” she said, but “you have to be there to be able to provide for your family.”
A sign over the door at Colorado Mushroom Farm near Alamosa is cracked and melted. Workers say conditions inside the 10-acre building have been unsafe for years. (Olivia Sun, The Colorado Sun via Report for America)
Workers pick mushrooms at the Colorado Mushroom Farm, then known as Rakhra Mushroom Farm, on Oct. 6, 2010. (Jim West, Alamy Stock Photo)
At least three dozen former employees are still owed money, ranging from about $500 to several thousand dollars, according to surveys Gaspar and other employees with Los Promotores del Valle de San Luis have conducted.
Charlie Griego, who has served as an Alamosa city councilman since 1983, has received repeated pleas for help from the farm’s workforce, and last year frequently saw workers huddled outside First Southwest Bank on Alamosa’s Main Street trying to cash checks in the morning.
Workers said they often raced to the bank after being paid on Fridays because the funds would run out. Sometimes they were paid in cash.
“This last time what happened was they told them, ‘OK, the mushrooms are ready. Come on in and we’ll make sure you get your pay,’” Griego said. When workers finished the harvest, Nanda’s company told them there was no money to pay them.
Workers have shown Griego their uncashed checks, totaling $800, $1,000 or more.
One man who worked at the farm for 35 years packaging mushrooms said he initially earned about $3 an hour and worked 140 hours every 15 days — more, if the work was available.
He saw signs of financial trouble in the past five years. If machinery broke, it wasn’t replaced. He was working 30 hours a week instead of 40 to 60. He earned about $12.50 an hour.
A document he was provided by the farm after it closed in June shows he is owed at least $2,024 excluding unpaid vacation time.
Another couple said their wages stayed the same for more than 20 years: They got $1.40 for each 10-pound box of mushrooms they picked. When paychecks didn’t come on time, they’d look for other income.
“Sometimes we would go out to collect pine nuts to sell them and earn some money,” the husband said, in Spanish.
The man injured his hand working at the farm and was told he’d be reimbursed for his medical bills. He said he never was. His wife injured her foot when she fell in the dark. She took 10 days off from work. She also wasn’t paid.
The woman had been sending money back to Guatemala for her family until she stopped getting paid last year. Her mother got sick and died during that time.
“I felt so bad,” said Griego, who spoke with the couple. “They tell me this in Spanish: ‘Look at these checks. Here they are. We work hard for them and they don’t want to pay us.’”
TOP PHOTO: Colorado Mushroom Farm filed for bankruptcy in December. Former workers say the farm had unsafe conditions for years and they were not always paid for their work. (Olivia Sun, The Colorado Sun via Report for America)
Shannon Najmabadi has covered rural affairs and the rural economy for The Colorado Sun since 2021. She was previously a reporter at The Texas Tribune. Colorado Sun staff writer Delaney Nelson and International Center for Journalists fellow Michelle Madrid contributed to this report.