The Woes of Hanford Workers: Convoluted Contracts and Burdensome Bureaucracy

Sei Unno
Associate Editor
Loyola University Chicago School of Law, JD 2019

Since the Hanford Site stopped producing plutonium in 1987, contractors continue to clean up leftover radioactive contamination and hazardous solid and liquid waste. Although precautions are being taken to prevent workers from being contaminated by or exposed to the waste, the risk remains and worker’s compensation claims follow. The Department of Energy (DOE) OIG recently published an audit report concluding that the DOE does not have effective policies and procedures concerning the Workers’ Compensation Program at the Hanford Site.

What is Hanford?

The Hanford Site has fallen in and out of the media spotlight over the years. Often compared to Chernobyl, Hanford has been billed as the “most toxic place in America.” The closure and clean-up was established through a Tri-Party Agreement (Agreement) signed by the U.S. Department of Energy, the U.S. Environmental Protection Agency, and the Washington State Department of Ecology.

The clean-up efforts resulting from the Tri-Party Agreement have produced a massive web of bureaucracy, including various contractors, subcontractors, and consultants. Article II of the Agreement outlines that the DOE is responsible for relaying the terms of the Agreement to any contractors, subcontractors, and consultants as well as making sure that they comply with the Agreement. Although agents, contractors, subcontractors and consultants are required to comply with the Agreement, the terms of the Agreement are only enforceable against the EPA, Department of Ecology, and DOE. The most recent activity concerning the seemingly never-ending Hanford cleanup involves worker’s compensation claims.

The DOE OIG audit

Washington Senators Patty Murray and Maria Cantwell (both D-Wash.) had requested that the DOE OIG conduct a review of workers’ compensation issues at the Hanford Site on March 8, 2017. The letter was a result of complaints that workers’ compensation claims were being denied arbitrarily and allegations of intimidation and harassment of workers after they filed claims.

Penser North America, Inc. (Penser) is the third-party administrator for workers’ compensation claims at the Hanford Site. The worker’s compensation claims process involves three steps and three different entities. After Penser makes a claim determination, the claim is then forwarded to the Washington State Department of Labor and Industries (L&I). If L&I approves a worker’s claim, then the DOE pays medical expenses and lost wages.

The DOE OIG review consisted of reviewing policies and procedures of the Hanford worker’s compensation program and interviewing stakeholders such as DOE officials, Penser management, union representatives, representatives from L&I, and 19 workers. The workers were interviewed about their worker’s compensation claim experience such as the type of injury or illness the worker sustained; whether the doctors were qualified to determine the worker’s health condition; whether all of the relevant information was provided to their doctors; and whether the workers felt intimidated or harassed during the claims process.

The DOE OIG found that many issues existed in this convoluted worker’s compensation claims process. Among such issues, it was found that the DOE did not make sure that Penser sent complete documentation packages sent to L&I. The OIG also found that the DOE had not been billed and therefore had not paid $21.8 million worth of claims that the L&I had approved from 2000 to 2016.

The audit report continues to state that there were communications and trust issues surrounding the workers’ compensation claims involving more complicated claims. The OIG made recommendations to the DOE including putting more power into its review and control of documents; improving communication, education, and advocacy; and increased transparency surrounding claims.

Inhaling chemical vapors was one type of claim that was not being handled properly through the existing worker’s compensation program. These claims come three years after Hanford Challenge and union Local 598 filed a lawsuit to seek better protection for Hanford workers who are at risk of inhaling chemical vapors. This lawsuit was filed in conjunction with a lawsuit filed by the State of Washington against the Department of Energy and its Hanford tank farm contractor.

The contract requirements between the Department and Penser includes a provision that Penser will “provide exceptional customer service in the processing of claims.” However, there is not much else regarding performance expectations. Section C.4.3 of the contract does include a process for undertaking corrective action, but the clause is phrased in a way to put the onus on Penser to conduct internal monitoring and audits. It is unclear in what way the DOE would be involved in this process.

Next steps

The OIG attributes the various problems identified in the report to inadequate management by the DOE, including oversight of the claims process and controls over the Penser contract. The DOE OIG report concluded that the DOE is working with L&I to provide additional oversight. These measures are additional to the Hanford Workplace Engagement Center (HWEC). HWEC assists current and former Hanford employees and their families regarding their claims.

Although the OIG report puts the burden on the DOE to create a corrective action plan, the question remains how to implement effective controls that trickle down from the DOE to the claims processors, to Penser, and to the representatives at HWEC. In addition, claims that workers felt intimidated or harassed during the claims process speaks not only to a procedural shortcoming but also improvements that need to be made in customer service.

The DOE management’s response to the audit includes making systematic operational and programmatic improvements to promote better communication and trust with contractor workers. Creating a corrective action plan starts with policies and procedures but successfully implementing them on a personal level is another challenge that the DOE will face in addressing the concerns of Hanford workers. For example, whether the mental health of Hanford workers is being taken care of alongside their physical injury and illness claims. Ideally, HWEC will provide a holistic resource to the workers and their families.

As this story develops, time will tell how the DOE will ensure that workers feel heard and respected during the complicated claims process and that claims are properly passed from Penser to L&I to the DOE.