Hershey, the 117-year-old candy maker that landed on Forbes’ Nifty 50 list of most innovative companies in early August, has run into some awful publicity in the last two weeks and had to face the perils of turning over responsibility for a portion of its labor force to a sub-contractor.
More than many companies, the appeal of Hershey’s sugary product line relies on the clean, wholesome reputation of its corporate owners. But instead of associating Kisses and Kit-Kats with Hershey’s benevolent founder, chocolate-themed amusement park and eponymous home town, the public has recently facednews that Hershey has been exploiting some 400 foreign students who thought they were signing on for an enjoyable summer of work experience and a healthy exposure to American culture. Instead the students, who came to Pennsylvania through the State Department’s J-1 guest worker visa program, staged a series of protests starting August 17, claiming that they had been toiling on fast-moving assembly lines, packing and lifting 50-lb. boxes of Reese’s and other sweets, sometimes on the overnight shift starting at 11 p.m.. They also said their wages were so low, they weren’t earning enough to pay back their expenses.
Hershey has had to cope with a large share of the negative publicity, even though it was three steps removed from hiring the students. The students work for a warehouse run by Exel, a logistics company hired by Hershey. Exel had turned to a staffing vendor, SHS OnSite Solutions, and outsourced the hiring to yet another company, a San Clemente, Calif. nonprofit called Council for Educational Travel, USA (CETUSA), one of 52 nonprofits that handle hiring for the J-1 program. Some 120,000 foreign students come to the U.S. on J-1 visas every year. The students work for several months and then can travel for a month as tourists. At the Exel warehouse, the students come from a number of countries, including Turkey, China, Ukraine and Nigeria.
Yet another organization, the National Guestworker Alliance, helped organize the students’ protests, with involvement from the A.F.L.-C.I.O. and the Service Employees International Union.
Since the protests began, Exel has told staffing company SHS OnSite Solutions, to stop hiring J-1 student workers. The Labor Department has said it would investigate both wage-and-hour violation claims and safety concerns, and the State Department said it would look at the nonprofit group to make sure it was monitoring working conditions. CETUSA has put out its own lengthy statement, defending its practices, here. CETUSA refers to the “media frenzy” and includes documents the students received in advance, that spelled out the work they would be doing in the warehouse.
Media frenzy or not, the controversy has spawned unwanted coverage for Hershey and other companies that use the J-1 program, including a forceful New York Times op ed by Fordham law professor Jennifer Gordon, that calls Hershey’s business strategy “a microcosm of the downsizing and subcontracting that so many American companies have pursued during the past few decades in search of ever cheaper labor.” Gordon points out that union workers, who made $18-$30 an hour, had previously done the warehouse job now handled by the foreign students, whose hourly wage is $8. Gordon reminds readers that there have been a series of exposes on the J-1 program. (You can find a well-done December 2010 investigation by the APhere.) “At a minimum,” Gordon argues, “the government should preclude the use of the J-1 program as a way to obtain workers at below-market rates.”
Since the protests started, Hershey has maintained, as Hershey spokesman Kirk Saville says, that the company “cares deeply about all its employees and all of its vendors.” Saville says that Hershey asked Exel, SHS and CETUSA to give the students a week of paid leave “for students to immerse themselves in U.S. culture,” a move that was announced Wednesday. Hershey is also offering students a day of educational and cultural activities in Hershey, Pa., including “an in-depth look at Milton Hershey’s legacy.”