Exclusive: Most U.S. firms hit with COVID-19 safety fines aren't paying up

Chris Kirkham
·7-min read
FILE PHOTO: Employees wear face masks at the JBS USA meat packing plant in Greeley

By Chris Kirkham

(Reuters) - U.S. workplace safety regulators have announced more than $4 million in penalties on more than 300 employers they say put workers at risk during the COVID-19 pandemic.

But about two-thirds of these employers aren't paying up.

Only 108 companies had paid a total of about $897,000 in fines as of last week to the Occupational Safety and Health Administration (OSHA) since the pandemic hit the United States last year.

Those who haven't paid include meatpacking giants Smithfield Foods Inc and JBS USA - which had outbreaks infecting thousands of workers - as well as packaged foods company Conagra Brands Inc. All three firms have appealed the citations and say they are without merit.

More than half of employers cited for COVID-19 safety problems by federal OSHA authorities have appealed, according to a Reuters analysis of OSHA enforcement data. That compares to 8% of fined companies that appealed in the five years before the pandemic, according to OSHA data. During the appeals - which can drag on for years - companies don't have to pay fines and aren't required to fix problems identified by OSHA inspectors.

The payment delays follow the agency's larger failure to hold employers accountable for unsafe conditions during the pandemic, a Reuters special report revealed in January. Reuters identified dozens of workplaces where employees complained of slipshod pandemic safety around the time of outbreaks - and regulators never inspected the facilities or, in some cases, took months to do so. (For full story, click https://reut.rs/3jC2hQf )

Further, the payment delays involve relatively small fines - averaging about $13,000 - that are not an effective deterrent, especially for large companies, five current and former OSHA officials told Reuters. Companies have so far had little to fear from regulators during the pandemic, said David Michaels, who led OSHA during the Obama administration and advised President Joe Biden's COVID-19 task force during the transition.

"This is sending a message," said Michaels, who is now a professor at George Washington University's school of public health. "It's just sending the wrong message."

James Frederick, acting head of OSHA, did not directly address Reuters' findings but said the agency is "taking a hard look at enforcement efforts related to COVID-19."

Frederick, a Biden appointee, pointed to new guidance OSHA issued to employers on infection control in January, following a White House executive order on pandemic worker safety. The agency is exploring the development of an emergency standard that could require masks and social distancing at workplaces, a move resisted by the administration of former President Donald Trump.

Reuters examined citations issued by federal OSHA but not those issued by OSHA affiliates who handle enforcement in about half of states.

Meatpacking giants JBS and Smithfield both argue that OSHA's citations are baseless because the agency had not issued guidance to meatpacking companies on protecting workers from the virus at the time of the alleged violations in March. The companies said they did their best in the absence of clear standards and have since improved worker protections.

OSHA says all companies have a "general duty" to protect workers from hazards including infection and that both companies failed to ensure a safe workplace.

'POCKET CHANGE' FINES

OSHA fined JBS $15,615 in September for violations at its beef plant in Greeley, Colorado, where six workers died and 290 tested positive for coronavirus through the end of July. The same month, it levied a $13,494 fine on Smithfield for failing to protect workers at its pork plant in Sioux Falls, South Dakota, where nearly 1,300 workers were infected and four died as of June.

The companies' appeals are pending before administrative judges at the Occupational Safety and Health Review Commission, an independent agency that reviews contested OSHA citations.

Worker advocates and family members of those who died at the plants are frustrated by what they call a lack of accountability for companies that exposed workers.

"$15,000 is pocket change to them," said Betty Rangel, whose father, Saul Sanchez, worked at the JBS Greeley plant and died of COVID-19 in April. "My dad's funeral was $22,000."

Many companies are fighting the relatively small fines because admitting violations can open up a firm to more costly workers' compensation claims or wrongful death lawsuits, said John Ho, an attorney at law firm Cozen O'Connor who has defended corporate clients against OSHA and fought corporate appeals as a Labor Department attorney. The violations can also complicate companies' efforts to secure government contracts.

"That's going to strike your bottom line, in a lot of cases, very significantly," said Ho, who is not involved in the cases described in this article.

Kim Cordova, president of the local chapter of the United Food and Commercial Workers International Union representing JBS workers, said the long appeals and small fines create "a culture where people won't speak up."

"Workers throw up their hands and think there's nothing they can do," Cordova said.

OSHA's directives for JBS to address workplaces hazards are on hold during the appeal. OSHA in September ordered JBS to enforce social distancing, to screen employees for symptoms and to work with local government officials on contact tracing to identify exposed workers.

In a statement, JBS said its workplace safety measures provide more protection than what OSHA has required.

In recent months, COVID-19 cases started climbing again at the JBS Greeley facility, with nearly 100 infections identified since mid-November, according to state outbreak data.

Anthony Martinez, a meat cutter at the plant, said he and other employees work so closely together that he "can smell the guy's breath next to me" through their masks.

DELAYED SAFETY MEASURES

OSHA has cited hospitals and other medical facilities run by Hackensack Meridian Health 15 times since September, levying more than $250,000 in fines for problems including an alleged lack of protective gear and a failure to ensure masks fit properly on nurses working with COVID-19 patients.

OSHA required the New Jersey facilities to document how they fixed the protective gear problems. But the company is appealing all of the citations, leaving workers facing the same unsafe conditions, said Debbie White, president of the union representing healthcare workers at several of the firm's facilities.

"Clearly, they are not working to improve the safety of their working conditions," said White, of the Health Professionals and Allied Employees union.

Hackensack Meridian Health said in a written statement that no corrective action is needed because worker safety was never compromised. The company said it has ample supplies of protective gear and properly trains staff on mask-wearing.

In November, after the company appealed many citations, workers at several Hackensack Meridian hospitals started noticing that managers were giving nurses what appeared to be low-quality N95 masks, without the proper labeling. Kendra McCann, a registered nurse at Hackensack Meridian's Jersey Shore University Medical Center, said staff couldn't get a protective seal around their faces. Management dismissed their concerns, she said.

"They get fined, and they just continue on," McCann said.

A few weeks after the ​managers provided allegedly defective masks, there was a sharp uptick in COVID-19 cases among staff, according to the union, which has filed a complaint with OSHA alleging the masks are known counterfeits.

Hackensack Meridian said it is investigating staff concerns about the masks.

CUTTING DEALS ON APPEAL

Only about a third of companies have paid their pandemic-related OSHA fines - and more than 80% of those who did pay saw their fines reduced in settlements with the agency. A Reuters review of OSHA's violations data shows those reduced COVID-19 fines dropped an average of 46%, to $7,411, from an initial average of $13,760.

Among the firms that have negotiated lower penalties are the owners of the Andover Subacute & Rehabilitation nursing homes in New Jersey. Andover made national headlines in April when local police found 17 bodies stored in a makeshift morgue at one of the facilities following a COVID-19 outbreak. The New Jersey Attorney General is investigating Andover, along with other nursing homes that had a high number of COVID-related deaths and a poor track record in health inspections.

Representatives of the nursing facilities' owner, Alliance Healthcare, did not respond to requests for comment.

OSHA initially assessed Andover fines of $22,555 and $16,504 in October for failing to protect staff. But the agency reduced the fines to $17,000 and $13,000, respectively, after a settlement.

By comparison, another agency, the Centers for Medicare and Medicaid Services, assessed a much larger fine - $220,000 - after its inspection of one of the Andover facilities found inadequate staff training and poor infection-control practices.

(Reporting by Chris Kirkham; additional reporting by Benjamin Lesser; editing by Vanessa O'Connell and Brian Thevenot)