Dangerous workplaces are BAD for business, grain elevator closed following worker deaths

The next time you hear someone claim that worker safety regulations and OSHA hurt job growth and hinder small businesses, remind them about Haasbach, LLC. On July 28, 2010, two workers (Wyatt Whitebread, 14, and Alex Pacas, 19) were killed at a grain handling facility owned by Haasbach, when the young workers were engulfed in corn. The boys, along with several others, were hired to do dangerous work—-breaking up corn in a million bushel grain bin—-and had not been given the training or equipment to do it safely. Haasbach’s owners failed to ensure that basic safety procedures were followed. These rules have been on the books for decades and ones that should be second-nature to any grain storage company.

Following an investigation, OSHA issued citations in January 2011 for willful and serious violations and proposed a $550,000 penalty. The Labor Department also found that Haasbach violated child labor rules, specifically ones that prohibit employers from hiring minors to perform certain highly hazardous tasks. Haasbach had illegally employed four minors (not just the 14 year old who was killed), and received an additional $68,125 for that law breaking. Haasbach contested both the OSHA safety and child labor violations.


This week, the Labor Department announced it had reached a settlement with Haasbach, which was signed about a month ago. The settlement agreement reduces the proposed $550,000 OSHA penalty to $200,000, a fine that company has now paid in full. The company and the Labor Department were probably motivated in part to settle the case because Haasbach, LLC is out of business. The agreement indicates that settlement was made

“…for the purpose of compromising and settling this matter economically and amicably and without further cost of litigation.”

Individuals and entities named in the settlement include Willard Harbach, Dirk Harbach, Haas & Haas, LLC and Harbach Family Partnership. The document further explains that the company (referred to as “Respondent”):

“…has ceased to operate any ongoing business at the inspected workplace in Mount Carroll, Illinois. Respondent is no longer actively in business and is presently engaged in winding down its affairs.

Had the company followed simple safety procedures, such as locking out energized equipment, prohibiting “walking down grain,” stationing an observer when workers entered the grain bin, and having rescue equipment available, this firm would still be in business. Most importantly, two youngsters would be alive, and the young survivors and their families not traumatized and grief stricken. This terrible event is a true life rebuttal to those who claim that safety regulations are job killers. That’s oh so false. OSHA’s regulations do not kill jobs. They keep jobs safe and prevent serious and fatal injuries that can put a company out of business.

The settlement agreement goes on:

“Respondent has sold its sole physical real property asset to Consolidated Grain & Barge. Respondent presently has no contracts for the storage of grain with any individual or entity. …Respondent no longer has any employees.”

It also stipulates that if this company forms or operates anytime in the next two years, a business involved in handling or storing grain, it must notify OSHA. That’s a no-brainer precaution, but I wonder why the Labor Department reserved this notification to grain handling. Haasbach officials’ blatant disregard (or ignorance) of its legal responsibilities as an employer tells me that these individuals would not perform any better running a tree trimming, asphalt paving, roofing, or other business that depends on employees.

As far as I can tell, Haasbach officials have not issued a single public apology or message of condolence to the affected families or the community. Their settlement with the Labor Department goes one step further. It says:

“Without admitting any of the [child labor] allegations…”

and

“…none of the foregoing agreements, statements, findings and actions taken by the Respondent shall be deemed an admission by the Respondent of the allegations contained within the Citations and Notifications of Penalty…”

I know that such statements are commonplace in these these sorts of agreements, but they still make me hold my nose. This company gambled with these boys’ lives and now the youngsters are dead. Haasbach should admit that.

As I’ve written before, if a professional sports figure can admit their mistake and pay the penalty, why is it so rare for employers to do the same?

Comments

  1. #1 daedalus2u
    December 8, 2011

    I think the reason is that professional sports is entertainment, where a large part of the entertainment value is the stars being icons that are looked up to by fans. When stars can’t be looked up to, then their value to advertisers goes down.

    Business is only about money. Business leaders are supported by politicians only to the extent that those business leaders provide campaign money to those politicians.

    My guess (and it is only a guess) is that the individuals are facing other civil and criminal charges. The Labor Department isn’t the place to sort civil and criminal charges out and apportion blame and penalties between the parties. Those will likely cost much more to investigate, litigate and settle than the few hundred thousand involved here.

    If someone is in criminal jeopardy, they can’t be compelled or coerced to admit guilt under the fifth amendment. There seems to be plenty of physical evidence of wrong doing, an admission of guilt isn’t necessary for conviction.

    IANAL, but usually murder or other causes of death is a state offense and is prosecuted by states and not by the Labor Department. There is the danger that local prosecution is controlled by local politics and can be controlled by local business money. Two dead children is pretty hard for local prosecutors to ignore. This settlement may not be a legal admission of guilt, but it is an implicit admission that they didn’t have a way to fight it.

    The respondents were all corporations. It is individuals who will be prosecuted for crimes.

  2. #2 Pragmatic Realist
    December 8, 2011

    So the people who owned it, sold its property and dissolved the corporation. And the company cannot ever go into the grain business again. But what about the owners, managers and supervisors of this entity? Did they simply move over to the company who bought the old one out? Or start up a new one like Massey Energy’s Don Blankenship?

  3. #3 Ed H
    December 9, 2011

    It is true that employers more often settle than admit fault. Protecting shareholder equity is often the underlying reason.

    While I don’t necessarily endorse that notion, it is a reality of the times we live in.

  4. #4 Celeste Monforton
    December 9, 2011

    Pragmatic Realist,
    To clarify, the agreement does not prohibit the individuals associated with Haasbach to never go into the grain business again. It simply says that if they decide to go back into the grain business, they are supposed to notify OSHA—-and that notification requirements ends in 2 years.

    The agreement mentions selling to an “arms length” away company, so I presume that means it is not a firm with any ties to the Haasbach officials.