The parent company of the firm that allegedly exploited mentally disabled workers in Iowa claims not to be subject to our state’s labor laws, the Des Moines Register’s Clark Kauffman reported today.

In May, Iowa Workforce Development fined Henry’s Turkey Service $900,000 for 9,000 violations connected to men who worked at a plant in West Liberty. They received pitiful wages after fees were deducted for housing, food and other expenses.

But the parent company of Henry’s Turkey Service sees things differently:

An attorney for Hill Country Farms said in a written response that the company “is organized, operated and controlled according to the laws and regulations of the State of Texas” and is not subject to the Iowa laws it’s accused of violating.

The company maintains that all of the Iowa workers who lived for decades in a bunkhouse in Atalissa, near the West Liberty plant, were technically residents of Texas and that their real employer was West Liberty Foods, not Hill Country Farms.

State and corporate records support some elements of that argument but undercut other aspects of the company’s case.

For example, some of the Atalissa men were enrolled in Texas Medicaid – a program that in theory is open only to residents of Texas. But the W-2 tax forms in which the men’s wages were reported to the Internal Revenue Service indicate that Hill Country Farms, not West Liberty Foods, was the employer.

Kauffman writes that “it could be a year” before an administrative law judge rules on this case. I’m not an attorney, but I would hope Hill Country Farms is not able to get away with claiming men in Atalissa, Iowa, as Texas residents.

Staff at Iowa Workforce Development and the state legislature should look for ways to close any loopholes companies may be using to evade our labor standards.

Click here for the archive of Des Moines Register reports on Henry’s Turkey Service and the men it housed in Atalissa.

Iowa Workforce Development is fining Henry’s Turkey Service $900,000 for labor law violations, the Des Moines Register reported on May 29. The fine stems from 9,000 counts of making improper deductions from paychecks, not paying the minimum wage, and not providing pay stubs to the mentally disabled workers who lived in a decrepit bunkhouse in Atalissa. (The violations affected at least 30 workers during every pay period in 2007 and 2008.)

Since various agencies are conducting other investigations into the company’s treatment of its workers, I expect this fine will be the first of many levied against Henry’s Turkey Service. However, an attorney for the parent company of Henry’s Turkey Service told the Des Moines Register that the company will challenge Iowa Workforce Development’s proposal. It will be some time before any fines are paid.

Click here for the archive of Des Moines Register reports on this appalling story.

Tom Harkin will schedule a hearing in the U.S. Senate Committee on Health, Education, Labor and Pensions to examine how this scandal occurred:

For 34 years, Henry’s Turkey Service acted as landlord, caretaker and employer for dozens of mentally retarded men sent from Texas to Atalissa [Iowa] to work in West Liberty’s meat-processing plant. The men were housed in a former schoolhouse, known as “the bunkhouse.” Nine days ago, state officials shut down the bunkhouse, describing conditions there as unsafe and “deplorable.”

In return for working 30 to 40 hours per week, the workers received room, board and care in the bunkhouse, plus a salary that, in some cases, averaged 44 cents an hour.

The Des Moines Register quoted Harkin describing the conditions as “pretty close to slavery.”

The company that contracted with Henry’s Turkey Service says it is not to blame:

A West Liberty Foods executive says the company never asked about the wages paid to the mentally retarded men who worked in the corporation’s meat-processing plant.

For years, Henry’s Turkey Service of Texas provided West Liberty Foods with workers in return for a fee. That fee was based on the number of hours worked by the mentally retarded men Henry’s had working in the plant.

West Liberty Foods Vice President Dan Waters said the weekly payments his company made to Henry’s, if divided by the hours worked by the men, were “well in excess of the minimum wage.” He declined to be more specific. […]

Waters said West Liberty Foods never asked how much of the money paid to Henry’s was passed on to the individual workers in the form of salary.

[…]

Waters said West Liberty Foods does not have any agreements with other companies to place handicapped workers in its plants. State labor officials say they have subpoenaed West Liberty Foods’ payroll records.

Unfortunately, this may not be an isolated incident:

Curtis Decker of the National Disability Rights Network […] said his organization plans to contact the U.S. Department of Labor and to work on ways to improve oversight of companies that employ the disabled. […]

Decker said many companies provide work for the mentally disabled at less than the prevailing wage. With government approval, they can pay less than the minimum wage, which is $7.25 an hour in Iowa. That can lead to abuse by unscrupulous employers, Decker said. “There’s very little oversight of all this by the Social Security Administration,” he said.

In the same article, Peter Berns of the advocacy group Arc called for a federal investigation to determine how Henry’s Turkey Service was able to treat its workers in that fashion for decades without being caught by federal, state or local agencies.

The Houston Chronicle reported on February 11,

It is not the first time the bunkhouse or the Henry’s Turkey Service operation has been examined by Iowa officials. State healthcare facility regulators visited the bunkhouse in 2005 and 2001, but on both occasions found the men to be functioning well enough not to be classified as “dependent adults.”

But in the past four years, the men’s conditions and mental states worsened enough to force Iowa officials to remove them.

On Saturday, state fire marshals closed the bunkhouse.

“The state fire marshal’s office did not know this building existed until we got the call,” said Courtney Greene, spokeswoman for the Iowa Department of Public Safety, which includes the state fire marshal division.

“All 21 men have mental retardation,” said Roger Munns, spokesman for the Iowa Department of Human Services, which petitioned a court this week that all 21 be classified as “dependent” adults. Arrangements were being made Tuesday to transfer the men from the motel they have been living in since Friday to a facility for the mentally disabled in Waterloo, Iowa.

Attempts were being made to keep all the men together because they consider each other family.

I hope these men will find decent care in the same facility, and I hope there will be a full federal investigation of this exploitation following the Senate hearing.