Wine Woes

As if the ongoing drought and the recent earthquake in California weren't enough to cause problems for the wine industry there, now we have the state government piling on.

Castro Valley winery fined $115,000 for using volunteers

A small-time vintner's use of volunteer workers has put him out of business after the state squeezed him like a late-summer grape for $115,000 in fines -- and sent a chill through the wine industry.

The volunteers, some of them learning to make wine while helping out, were illegally unpaid laborers, and Westover Winery should have been paying them and paying worker taxes, the state Department of Industrial Relations said.

"I didn't know it was illegal to use volunteers at a winery; it's a common practice," said winery owner Bill Smyth.

State law prohibits for-profit businesses from using volunteers.

Before the fine, volunteer labor was common at wineries in the nearby Livermore Valley, said Fenestra Winery owner Lanny Replogle.

"But not anymore," he said Monday. When word got around, several wineries sent their volunteers home.

What next? Will the Red Cross be fined for using volunteers? In a state with a cratering economy, one would think the powers-that-be would do everything they could to help small businesses - heck, any businesses - to succeed.

One would be wrong.

(The winery's owners) are holding a going-out-of-business sale and plan to shut down before the end of the year. The fines represent more than a decade's worth of profits for the winery (emphasis added), which nets about $11,000 a year, Smyth said.

"There's just no money left; they've taken everything," he said.

"We're a small winery, open only 10 hours a week. We didn't really need any helpers; we were just educating people about wine," he said.

About half the people the state considered Westover employees were taking a free class at the Palomares Canyon Road winery. Students learned about growing vines, harvesting and blending grapes and marketing the finished product.

"This was an incredible opportunity for me," said Peter Goodwin, a home winemaker from Walnut Creek who said he dreams of opening a winery with some friends. "I got to learn from someone who knows the business."

The winery sometimes asked Goodwin if he wanted to assist in different tasks.

"That's what I wanted, to be as involved as much as possible -- it was all about learning," he said. "I don't understand the state's action. It was my time, and I volunteered."

Ken Tatum took the classes because he thought it would be fun to learn more about making wine and running a winery. The state fines were ridiculous and unfair, he said.

"I should be able to volunteer my time," said the retired Castro Valley resident.

I'm sorry, Mr. Tatum, but the state, in its infinite wisdom, has decreed that you should not be able to volunteer your time. The state, you see, knows better than you what is in your best interest.

So one business gets shut down, the owners lose a substantial amount of money, people who were learning a trade no longer have that opportunity, and the state loses tax revenue.

Well done, government bureaucrats!

Why, Tatum asked, didn't the state first warn Smyth that using volunteers was not OK?

The law does not allow for warnings, Melton said.

If there's one thing government drones are good at, it's following orders...