Downers Grove-based Hearthside Food Solutions has agreed to settle a child labor investigation by the Illinois Department of Labor and attorney general for $4.5 million.
The state agencies opened a joint investigation into Hearthside, which was named in a sweeping New York Times investigation into migrant child labor, last year. The company is a contract manufacturer that produces packaged, fresh and frozen foods for other food companies.
Hearthside filed for Chapter 11 bankruptcy protection in federal court in Texas two weeks ago, a move it said was not primarily driven by the child labor allegations. On Friday, it filed a motion asking the court to approve the proposed settlement agreement with the Illinois agencies.
“The Attorney General’s office is working to protect minors from hazardous working conditions because children belong in classrooms, not manufacturing facilities,” spokesperson Annie Thompson said in a statement Friday. “We are committed to reaching a resolution with Hearthside Food Solutions that protects minors from exploitation and holds the company accountable for any practices that violate Illinois labor laws.”
Hearthside, which in its initial bankruptcy filing estimated its assets and liabilities to be between $1 billion and $10 billion, did not admit wrongdoing as part of the proposed settlement and continues to deny allegations it violated any child labor laws.
“Hearthside looks forward to moving the [c]ompany into the future on strong footing, leaving past challenges behind, and positioning the business for sustained growth,” it said in a statement.
If approved by the court, up to half of the $4.5 million settlement would be set aside by the labor department for people who say they worked for Hearthside while under age 16 and who can provide documentation supporting their claim.
The settlement agreement, which would be valid for two years if approved by the bankruptcy court, requires Hearthside to submit to ongoing oversight by the state.
The agencies will be permitted to audit Hearthside during the terms of the agreement, which allow them to request “all communications, records, and other documents related to the hours worked, wages, assignment, duty, identity, and age of any workers employed by Hearthside or its agents or independent contractors performing work in Illinois.”
Hearthside would also be required to open a hotline for employees to anonymously report alleged child labor violations and would be required to investigate any such complaint in good faith. Complaints and any investigations that follow must be reported three times a year to the labor department and the attorney general’s office.
The company must also provide child labor compliance training to managers at its 10 facilities in Illinois, which represent about a third of its network nationwide.
Hearthside, which has described the child labor allegations as being “principally connected” to third-party staffing agencies, will also be required to work only with staffing agencies that agree to regularly provide required information, such as their child labor law compliance policies and the birth dates of all temporary employees, with the company.
The company has said it has already taken steps to reduce its reliance on third-party staffing agencies and temporary labor, saying last month that temps now make up about 10% of its workforce, down from nearly half previously, and that it now works with fewer than 10 staffing agencies rather than the nearly 50 it contracted with previously.
A separate investigation into Hearthside by the U.S. Department of Labor is ongoing, spokesperson Scott Allen told the Tribune on Friday. Hearthside declined to comment on the national investigation.
