The agreement requires UTC to pay $3.7 million under the Resource, Conservation and Recovery Act (RCRA) - the largest civil penalty ever imposed under RCRA in an EPA agreement. The remaining $1.6 million will be paid under the federal Clean Water Act (CWA) and the Connecticut Water Pollution Control Act (CWPCA). UTC's violations of environmental laws ranged from improper handling of hazardous waste to discharging pollutants without a permit.
Twenty-six UTC facilities in New England are covered by the audit agreement, which will assess the company's ability to comply with a wide range of environmental statutes. Federal officials maintained that UTC's widespread, serious and repeated violations could have been prevented if proper compliance procedures had been in place.
Under the agreement, UTC is required to retain a management consulting firm to assess the company's management systems and its ability to comply with federal environmental laws, and to recommend improved management and environmental compliance procedures, which the company will then implement.
The settlement also requires that an outside firm audit UTC's improved management procedures to ensure that they result in compliance.
"The audit, one of the most extensive ever agreed to in an enforcement action, will force widespread management improvement strategies to achieve compliance with every major environmental law at all of its facilities," says Paul G. Keough, EPA acting regional administrator for region 1.
As part of the settlement, Kimberly-Clark agreed to spend at least $47 million on facility improvements, including a new plant that will eliminate the use of chlorine in the bleaching process. The new facility is scheduled to start up in late 1994.
The agreement settles five dioxin lawsuits filed in 1990 and 1991 that sought a total of $500 million in damages.
The settlement covers all past, present, and future property damage claims by class members related to activities at the plant from 1988 to July 1993. Plaintiffs' attorney Richard Freese says he is "unaware of any" health problems of landowners.
Kimberly-Clark did not admit to any wrongdoing in the settlement. The company denied that any health damages had occurred, or that the dioxin posed any material threat to human and aquatic life. The company said that upon completion of the new facility it will have spent $130 million on environmental improvements at the mill since 1988.
The complaint charged that Kimberly-Clark "knowingly and intentionally" discharged a form of dioxin known as 2,3,7,8-TCDD into the Coosa River which runs into Lay Lake. Tests of fish directly downstream from Kimberly-Clark's waste discharge point at Coosa Pines have shown dioxin levels in excess of 30 parts per trillion (doses as low as .001 parts per trillion have produced cancer in test animals, according to the plaintiffs' complaint). Many of the fish in the river had developed sores, lesions and numerous growths on the exterior and interior parts of their body. Prior to the discovery of these problems, the river had been a popular fishing area.
"We will not tolerate companies that seek to gain competitive advantage through the strategy of undermining the nation's fair labor standards," Department of Labor Secretary Robert Reich says.
Of the $16.2 million, $13.2 million will go toward back wages for current and former Food Lion employees; $2 million will be paid as civil money penalties arising from the overtime and minimum wage violations; and another $1 million will be paid as civil money penalties for child labor violations.
Food Lion operates approximately 1,100 stores with over 60,000 employees. The company did not admit to any violations of FLSA in the settlement.
"Rather than spend considerable resources and years in litigation, we decided to resolve our differences with the Department now, and invest our dollars in our workforce," says Tom Smith, president and CEO of Food Lion, Inc.
Food Lion agreed to inform all employees of their rights and assured the Labor Department that no retaliatory action will be taken against employees who file complaints about unpaid overtime or other potential FLSA violations.
The settlement did not satisfy labor groups. "We don't think the settlement was adequate in terms of the amount of money for back pay for workers, nor do we think it was adequate in terms of preventing future violations," says Greg Denier, of the United Food and Commercial Workers (UFCW). The UFCW filed the initial complaint, which included grievances from former Food Lion employees in 141 stores, with the Labor Department in September 1991. The $13.2 million settlement averages to about $330 per worker in back-pay compensation.
"Food Lion still had a net gain by violating the law," Denier says. "If the company made $65 million a year in not paying workers for off-the-clock work, then, after three years, paid $13.2 million in back pay, it's certainly to [their] advantage to break the law."
- Ben Lilliston