Mid-to-late June 2016, federal and state authorities brought a variety of enforcement actions against food and beverage companies under environmental, health, and safety statutes, suggesting increased governmental oversight throughout the supply chain.

Safety and Health Enforcement

Frozen food producer Ajinomoto Windsor faces $140,000 in civil penalties after a federal Occupational Safety and Health Administration (OSHA) inspection, which was prompted by two amputation injuries suffered by the company’s workers.  Both incidents were attributable to alleged failures to comply with OSHA standards fundamental to the entire manufacturing sector—machine guarding and “lockout-tagout.” OSHA imposed penalty amounts at or near the maximum for most violations revealed during the investigation.

As for state enforcement, the Washington Department of Labor and Industries recently fined potato-processor Washington Potato Company $213,160 for alleged violations discovered during an injury investigation.  An employee was injured cleaning a machine that was still on, prompting an investigation into the company’s lockout-tagout practices. The investigation revealed a history of lockout-tagout and other violations, resulting in high-penalty assessments due to the “repeat” nature of the violations. The state agency also served notice that the company had been identified as a “Severe Violator” subject to heightened scrutiny and follow-up inspections.  The company is contesting the citations.

These worker safety enforcement actions confirm regulators’ continued focus on lockout-tagout requirements, which is the number 1 most-cited standard in the food manufacturing industry. Moreover, the increased penalties for repeat violations highlight the importance of challenging erroneous OSHA violations that might otherwise be settled or go uncontested.  In addition, we have noticed increases in the issuance of repeat citations on a company-wide basis, and OSHA is set to increase its penalty amounts this summer. Therefore, we expect food and beverage companies will be reviewing their facilities’ past OSHA violations to identify areas of risk.

Environmental Enforcement

Clean Water: On June 23, beer-maker D.G. Yeungling and Son entered into a multi-million dollar consent decree with the United States to resolve alleged violations of the pretreatment requirements for indirect dischargers under the Clean Water Act at two of its Pennsylvania breweries.  Yeungling’s Pottsville brewery discharges wastewater to the local sewer authority, which in turn discharges treated wastewater to the Schuylkill River.  The complaint accused Yeungling of numerous pretreatment program violations, including discharges of wastewater that exceeded effluent limitations for biological oxygen demand, among others; along with notification and monitoring violations.

Once the consent decree is approved, Yeungling will pay a civil penalty of $2.8 million and take the several affirmative actions to improve environmental compliance, including future environmental audits. Notably, these audits will cover not only the Clean Water Act, but a host of other federal environmental statutes. In a press release issued June 23, Yuengling announced that it had already installed an $8 million “state-of-the-art” wastewater treatment system at its historic Pottsville brewery.

With municipal water systems coming under increased scrutiny and the EPA’s “Keeping Industrial Pollutants out of the Nation’s Waters” national enforcement initiative, enforcement pretreatment standards are likely to be on the rise.

Clean Air: Last week, Trader Joe’s entered into a consent decreewith the United States to resolve alleged violations of the Clean Air Act (CAA) at its retail grocery stores associated with refrigeration equipment that contains the ozone-depleting substance R-22.  The CAA requires businesses that utilize ozone-depleting refrigerants to monitor for and promptly repair leaks.  The company agreed to pay a $500,000 civil penalty, implement a corporate refrigerant compliance management system, reduce its average refrigerant leak rate, and use equipment that contains non-ozone-depleting substances in new stores and remodels. This settlement follows similar CAA enforcement actions at major grocery store chains, including a 2013 settlement between the EPA and Safeway.

Chemical Safety: JSB, a family-owned and -operated frozen bakery business, recently settled several alleged violations of regulations governing the use of anhydrous ammonia in refrigeration equipment. Provisions the company allegedly violated include: 1) the “general duty” clause of the CAA; 2) notice requirements in section 103 of Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA); and 3) inventory reporting requirements in Emergency Planning and Community Right-to-Know Act (EPCRA).  Under its settlement, JSB will pay a civil penalty of $156,000 and undertake a supplemental environmental project that will provide approximately $119,000 worth of equipment to local fire departments, intended to assist nearby “environmental justice areas of concern” with chemical release response.

These enforcement actions illustrate that traditional environmental, safety and health enforcement is alive and well, and failure to comply may result in government investigations and, at least in these cases, the payment of substantial penalties accompanied by ongoing agency involvement in the operations of company facilities to ensure future compliance.