milk_chocolate.pngThis week, the federal government said it found major safety violations at a key Hershey plant in Pennsylvania.

But guess what? Hershey isn’t in trouble.

The Occupational Safety and Health Administration cited two Hershey contractors — Exel Inc. and SHS Staffing Solutions — for the violations. The charges are serious including everything from willful thwarting of U.S. safety laws to the failure to keep tabs on worker injuries, and the fine was high, nearly $290,000.

Even though the workers at the plant make Hershey products and the company profits from those Kisses and Kit-Kats, the company pretty much gets to wash its hands of the whole thing.

A reporter for the New York Times, Julia Preston, rightly called Hershey after news of the fine came out, and the company took a pass:

A spokesman for the Hershey Company, Jeff Beckman, noted that Hershey had not been cited by OSHA, and he said he could not speak for Exel.

But what about Hershey’s role in this? I asked Labor Department spokeswoman Joanna Hawkins why Hershey wasn’t cited, and she said, “under Occupational Safety and Health Review Commission case law, the only employer who is citable is the one that has significant control over the manner and means of the employee’s work.”

Hiring third-party contractors to run a company’s manufacturing operations is nothing new, and it’s only gotten more popular in recent years because many of these firms are pros at keeping costs down.

In the case of this Hershey plant, Excel handled the operations and SHS did some of the hiring. One particular group of recruits SHS was responsible for bringing in were foreign students. The students were able to come into the country thanks to an organization called Council for Educational Travel-USA, which sponsored their visas.

Well, earlier this month the federal government banned the group. This from the Philadelphia Inquirer:

The U.S. State Department has banned a nonprofit group that supplied 400 foreign students as laborers to a Hershey Co. candy-packaging plant last year from participating in a popular cultural-exchange program for two years.

The California-based organization, CETUSA, brought the foreign students to the United States on J-1 visas. Once here, the students were to have practiced English and learned about America while also earning money in summer jobs.

The students, many from Ukraine and Turkey, protested in August on Chocolate Avenue in Hershey saying they were forced to work long hours for low pay in the Palmyra packaging plant, and had little time or funds to travel and interact with Americans.

OSHA said CETUSA was not cited in the report, but the U.S. Labor Department is investigating the organization for potential wage and hour violations and withholding information.

The harsh conditions at the Hershey plant cited by OSHA in its report this week did not only focus on the safety of the students, but the overall workforce. Shouldn’t the responsibility of providing a safe work environment to all the employees also fall on Hershey, as well as the contractors?

“This is an important question because of the increased frequency of the use of contractors and some widely publicized cases of companies trying to shirk their responsibilities by pointing to contractors,” said Gary Chaison, professor of industrial relations at Clark University. “For example” he added, “Apple uses a contractor in China to build its iPhone and there have been many complaints about working conditions in those plants, including worker suicides. My impression is that companies like Hersey are responsible, both legally and ethically, for the safety violations committed by contractors, because Hersey has the right to inspect production facilities and withdraw or modify the contract if it’s not up to the company’s standards of workplace safety and fair employment.”

I also wondered about the Hershey products these workers, under the auspices of third parties, were making. What if my kid got a bad Hershey Kiss? Who’d be liable in this regard?

“The answer is it depends,” said Marc Breakstone, a Boston attorney who specializes in product liability cases. “So much depends on the contract language between the two parties. Generally, if a company puts a defective product in the stream of commerce, they are liable, whether they, or a third-party actually manufactured it. The liability of the contractor depends on the contractual agreement and indemnification between it and the company.”

On the safety issue, I decided to ask OSHA’s Hawkins the big question: “So, if an employee at the Hershey plant died or was seriously injured Hershey would not be liable?”

She said: “Eve, to answer your hypothetical question, it would depend on the specific evidence in the case.”

In the end, said Chaison, “the workers are the losers, and Hersey and CETUSA and their lawyers are the big winners. They managed to craft a situation in which no one knows what’s happened and no one can do anything about it, and I find that amazing.”

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