Instar-owned Windmill Farms fights boycott, accusations of labor abuses as it struggles to fundraise

Canadian private equity firm, Instar Asset Management and its portfolio company Windmill Farms has been embroiled in a multi year labor abuse scandal, documented poor performance in past years, and difficulty in fundraising. The firm has not addressed these issues directly, but appears to have reopened its third infrastructure fund with a new fundraising effort and acquired a new Canadian infrastructure company, as a pending lawsuit alleging labor abuse heads to the Washington Supreme Court. 

In February 2023, Canadian private equity firm acquired a Sunnyside, Washington mushroom farm and began running it under the name Windmill Farms. Since Instar’s acquisition, the farm has: 

• Been fined by the US Department of Labor for unpaid wages and other federal violations;
• Settled a discrimination lawsuit with the WA AG for $3.4 million;
• Been sued by numerous current and former employees for alleged federal and state violations;
• Refused to meet with farmworker representatives or numerous civic organizations concerned about the treatment of Windmill workers; 
• Faced calls to be removed from the Principles for Responsible Investment (PRI) due to violating its own ESG policies; 
• Been the subject of a growing boycott of the farm’s products by the United Farm Workers union, which has been endorsed by labor, religious, and civic groups across the US and Canada

This almost four year long labor dispute continues to create financial and reputational risks for the farm and its private equity owner, Instar Asset Management. The Texas Municipal Retirement System (TMRS) website shows financial reports going back to 2022 with regular poor returns from the two investments in InstarAGF Essential Infrastructure Fund II, the fund that owns Windmill Farms. The pension fund’s website does not provide quarterly reports older than March 2022. The March 2022 report shows the two investments as showing negative rates of return (the fund is losing money on the investment), at -8.83 and -.10; the September 2025 report, the most recent one available on the website, shows the two investments as providing a -6.37 and 3.03. Private equity data provider PitchBook ranks the Instar fund that owns Windmill Farms poorly, in the fourth quartile of IRR performance compared to its peers as of the third quarter of 2025. 

Instar’s problems have been documented in a recent PESP blog as well as an in depth report by the University of Oregon Labor Education and Research Center. 

While it appears that the firm abandoned its 2021 effort to raise a third infrastructure fund, it more recently began fundraising again and acquired Groupe Somavrac Inc., a Canadian infrastructure company with its second infrastructure fund in January 2026. 

In December 2025, the Washington Supreme Court agreed to take up the appeal of a lawsuit brought by current and former Windmill Farms employees brought in 2023. In November 2023, Toronto-based Globe & Mail covered the situation at the farm in two separate articles, as did The Seattle Times and the LA Times, when “A half–dozen Washington–state agricultural workers filed a lawsuit Tuesday against their mushroom farm’s Canadian owners, saying employees attempting to organize a union there have been harassed, singled out for mistreatment and in some cases terminated.”

“The lawsuit demands a halt to the use of production quotas to discriminate against some workers, an end to workplace surveillance of certain employees and an end to separating union supporters from one another in order to stop them from discussing workplace concerns.”

Instar and Windmill Farms argued that workers did not have the right to sue the company because they had signed mandatory arbitration agreements. Workers previously reported that when Instar bought the farm, workers were fired and then offered jobs only if they signed mandatory arbitration agreements. The judge ruled against the workers, stating that they had to use the arbitration process, before the Supreme Court agreed to hear the case in December. 

As Instar attempts to revitalize fundraising for its third infrastructure fund, investors should request detailed information about the cause of the poor performance of the previous fund, what is happening at Windmill Farms, and why the firm appears to haveviolatedtheir own ESG policies and refuse to engage with civic and labor groups to seek a resolution to the underlying labor dispute causing the costly legal disputes and a growing boycott of a key portfolio company.