Author: Lindsey McDonald | UC Berkeley School of Law | J.D. Candidate 2021 | Posted: November 20, 2020
March of 2020 brought unprecedented challenges for US companies. As the Covid-19 pandemic surged across the world, with uncertainty and confusion spreading faster than the virus itself, companies were forced to make a choice: employee welfare or short-term profits. For many, it was an easy decision. They adjusted sick leave policies, allowed employees to work from home (some, indefinitely), and even increased pay and gave bonuses.[i] “For at least a time, the paramount concern for most corporations was not just profit and the bottom-line.”[ii] However, this cannot be said for all companies – particularly those in the meatpacking industry.
While working from home was not an option given the nature of their work, meat processing plants could have enacted a number of different measures to improve worker safety, including:
- Slowing production lines in order to facilitate social distancing between workers
- Providing personal protective equipment
- Encouraging sick or vulnerable employees to stay home
- Providing paid sick leave
Instead, safety measures were poorly implemented or not conveyed to workers, many of whom don’t speak English, and sick employees were encouraged to come to work.[iii]
The consequences of prioritizing profits over employees were severe. Meatpacking plants, where employees often work shoulder to shoulder on assembly lines, became “early epicenter[s]” for infections.[iv] Smithfield’s pork plant in Sioux Falls, South Dakota, which employs about 3,700 workers, had over 200 cases linked to it.[v] At Tyson’s Waterloo facility in Iowa, more than 1,000 employees were infected and five died.[vi] According to the CDC, “[i]n April and May, more than 17,300 meat and poultry processing workers in 29 states were infected and 91 died.”[vii]
These workers were primarily undocumented immigrants and minorities, further underscoring how Covid-19 disproportionately affects people of color and marginalized groups.[viii] This crisis shows that the most critical impacts of a failure to address employee welfare concerns will be felt by the poorest workers who, in this case, likely did not have the luxury of choosing their health over their paycheck.[ix]
While the consequences for employee health are undoubtedly paramount, employees were not the only ones affected – so too were profits, the very thing management sought to prioritize. Incapable of controlling the spread of Covid-19, meat giants including Tyson Foods Inc., Smithfield Foods Inc., JBS USA Holdings Inc., and Cargill Inc. were forced to shut down more than a dozen major processing plants.[x] Now, these companies are facing gross negligence and wrongful death lawsuits, which will likely prove both economically and reputationally costly.[xi]
Additionally, if meatpacking companies thought they were cutting costs by not investing in employee health measures, those hopes were short-lived. In response to shutdowns, meatpackers “spent hundreds of millions of dollars on safety equipment such as personal protective gear, thermal scanners and workplace partitions, and they boosted workers’ pay to encourage them to stay on the job.”[xii]
It may appear that meatpacking companies reversed course relatively quickly and are now prioritizing employee safety, but in reality, these changes are long overdue. Nadira Narine, a senior program director at the Interfaith Center on Corporate Responsibility (ICCR) explained that poor working conditions and lack of investment in employee welfare are “longstanding engagement themes that weren’t created by – but only exacerbated by – the Covid-19 crisis.”[xiii]
Meat processing remains one of the more hazardous jobs in the U.S.[xiv] In 2018 there were “4.3 workplace injuries or illnesses per 100 full-time workers,” a rate that is “nearly 40% higher than the national average for all industries, surpassing logging, mining and construction.”[xv] Senior advocacy and collaborations adviser for U.S. domestic programs at Oxfam, Alex Galimberti, described the sector as having “a history of not respecting human and worker rights…. Its objective has been short-term profit without protecting the long-term sustainability of the sector. Now we see the industry’s fragility.”[xvi]
Sustainable investors have long pushed for ESG advancements in the industry. Just this February, a shareholder proposal on human rights due diligence was rejected at Tyson’s annual meeting.[xvii] It was the second of its kind filed by the American Baptist Home Mission Society.[xviii] Now, investors, through organizations like ICCR, are increasing pressure on meatpacking companies to enforce social distancing, provide protective equipment, and oppose legislation that denies unemployment benefits to workers that refuse to return to work due to fear of being infected.[xix]
Thus, the Covid-19 crisis, while not the cause of employee welfare issues, has exposed major weaknesses in the meatpacking industry. With hindsight, it is clear that early investment in ESG and employee wellbeing would have not only saved lives but also protected profit margins. Meatpacking companies would have seen lower output numbers for March and April but likely could have avoided outright shutdowns. Even more importantly, companies could have prevented infections and deaths.[xx]
Notably, these lessons are not unique to the meatpacking industry. Meatpacking plants serve as a case study on how prioritizing short-term profits over long-term sustainability results in severe consequences. Other industries with similar priorities have faced similar challenges throughout the pandemic. Perhaps now, industries slow to embrace ESG will appreciate the importance and value in investing in employee welfare and ESG measures.
[i] Ezequiel Minaya, New Ranking of Nation’s Top Employers’ Responses to Pandemic, Forbes, https://www.forbes.com/sites/ezequielminaya/2020/05/26/the-forbes-corporate-responders-new-ranking-of-nations-top-employers-responses-to-pandemic/#73952ae44a51 (last visited Sept. 24, 2020).
[ii] Id.
[iii] Janet Adamy, Families File First Wave of Covid-19 Lawsuits Against Companies Over Worker Deaths, Wall St. J. (July 30, 2020), https://www.wsj.com/articles/families-file-first-wave-of-covid-19-lawsuits-against-companies-over-worker-deaths-11596137454.
[iv] Jacob Bunge, Coronavirus Surge Tests Safeguards for Meatpacking Workers, Wall St. J. (July 2, 2020), https://www.wsj.com/articles/coronavirus-surge-tests-safeguards-for-meatpacking-workers-11593719573.
[v] Jacob Bunge, Jesse Newman & Kirk Maltais, Meat Companies Want to Reopen, but Officials Fear New Wave of Coronavirus Infections, Wall St. J. (Apr. 30, 2020), https://www.wsj.com/articles/meat-companies-want-to-reopen-but-officials-fear-new-wave-of-coronavirus-infections-11588261811?mod=searchresults&page=1&pos=18.
[vi] Adamy, supra, note 3.
[vii] Jacob Bunge & Jesse Newman, Tyson Turns to Robot Butchers, Spurred by Coronavirus Outbreaks, Wall St. J. (July 9, 2020), https://www.wsj.com/articles/meatpackers-covid-safety-automation-robots-coronavirus-11594303535.
[viii] Isis Almeida, Meat Companies Get Pressure from Investors to Improve Working Conditions, Bloomberg (May 21, 2020), https://www.bloomberg.com/news/articles/2020-05-21/meat-giants-face-esg-fight-with-investors-managing-2-trillion.
[ix] David Pitt, CDC: Minorities affected much more in meatpacking outbreaks, Associated Press (July 8, 2020), https://apnews.com/article/12c6f7dd8888b7f2a174ae4ba8f06b67.
[x] Bunge, Newman & Maltais, supra, note 5.
[xi] Adamy, supra, note 3.
[xii] Bunge & Newman, supra, note 7.
[xiii] Almeida, supra, note 8.
[xiv] Bunge & Newman, supra, note 7.
[xv] Id.
[xvi] Almeida, supra, note 8.
[xvii] Id.
[xviii] Id.
[xix] Id.
[xx] Id.