Smithfield Fine in Deadly Covid Outbreak Labeled ‘Paltry’

(Bloomberg) -- U.S. regulators issued their first sanction against a meatpacker connected with a deadly Covid-19 outbreak: a $13,494 fine against Smithfield Foods Inc. that drew criticism as inadequate from two senators, a former safety official and a major national union.

Nearly 1,300 workers at Smithfield’s Sioux Falls, South Dakota, plant tested positive for the virus, 43 were hospitalized and four died between March 22 and June 16, according to inspection documents. The U.S. Occupational Safety and Health Administration said in a statement that the fine was the maximum allowed by law. Smithfield is owned by the Hong Kong-based WH Group Ltd.

The meatpacking industry was an early epicenter of coronavirus as the disease rapidly spread among its often poorly paid immigrant employees working in close quarters. Democratic critics such as Senators Elizabeth Warren and Cory Booker have highlighted the toll the pandemic has taken on employees as emblematic of failures to protect frontline workers.

Booker called the fine “paltry” in a tweet. Warren said it sent “a message that companies won’t face real accountability.” Debbie Berkowitz, who was chief of staff at the regulatory agency under President Barack Obama, disparaged the OSHA penalty as “barely a slap on the wrist.”

OSHA cited the facility for one violation of a rule that employers keep workplaces free from recognized hazards that can cause death or serious harm. Inspection documents indicate the meatpacker failed to provide adequate social distancing.

Berkowitz compared it unfavorably to fines of more than $200,000 each that California state occupational safety regulators issued this month against frozen-food manufacturer Overhill Farms Inc. and its employment agency for improper social distancing following an outbreak in which 20 workers tested positive and one died.

Berkowitz, now health and safety director for the National Employment Law Project, said OSHA could have fined Smithfield separately for every area of the plant without adequate social distancing or sought a large penalty for a “willful” violation. Issuing only one citation for safety problems throughout the plant “is a choice they made,” she said.

“Without Merit”

Smithfield considers the OSHA action “wholly without merit and we plan to contest it,” Keira Lombardo, the company’s executive vice president of corporate affairs and compliance, said in a statement, noting that the agency didn’t issue guidelines for the meatpacking industry until April 26.

“We took extraordinary measures on our own initiative to keep our employees as healthy and safe as possible so that we could fulfill our obligation to the American people to maintain the food supply,” Lombardo added, saying the company incurred $350 million in expenses related to Covid during its second quarter.

Smithfield said in a letter to two U.S. senators that it was nearly impossible to social distance inside its plants. Spreading out workers would slow down meat production and could contribute to empty store shelves. “For better or worse, our plants are what they are,” Chief Executive Officer Ken Sullivan said. “Four walls, engineered design, efficient use of space, etc. Spread out? Okay. Where? To say it is a challenge is an understatement.”

The North American Meat Institute, an industry trade group, said in a statement that meatpackers “quickly and diligently took steps to protect and support workers” and new Covid cases associated with meat production are now “trending down compared with cases nationwide.”

Confirmed Cases

A tabulation of local news reports by the Food & Environment Reporting Network totaled at least 42,123 confirmed Covid cases and 201 related deaths among meatpacking workers through Thursday.

The United Food and Commercial Workers International Union, which represents workers at the Sioux Falls site and other meatpacking plants across North America, condemned the penalty in a statement Thursday as “completely insufficient” and “insulting.”

In July, Smithfield asked a U.S. court to keep OSHA from obtaining documents related to employee reports of illness, Covid-19 test results, and interviews with its South Dakota plant workers.

Smithfield said its employees “have legitimate privacy interests in this information” in its motion to quash the regulatory agency’s subpoena.

OSHA served its subpoena on the South Dakota Department of Health on June 23, seeking records related to a Covid-19 outbreak at Smithfield’s Sioux Falls facility, which temporarily closed for more than three weeks after hundreds of workers had tested positive.

That case has since settled.

Smithfield’s Sioux Falls plant is one of the largest pork processing facilities in the country, representing 4% to 5% of U.S. pork production, according to the company’s website. It employs 3,700 workers. .

©2020 Bloomberg L.P.