The industry's struggles with the problem didn't start yesterday and won't end tomorrow.

Drycleaner testifies before congressional panel

From Baise & Miller PC

Barney Deden's testimony:

My name is Barney Deden. My wife, Patty, and I own and operate a drycleaning and laundry business in Omaha, Nebraska. We spend nearly all our waking hours in the operation of the business and, like most small business owners, our reward over the years has been more emotional than monetary. The feeling of accomplishment we get from seeing our business survive and prosper makes the long hours and hard work worth the effort. I guess that is what is known as the entrepreneurial spirit.

When we bought our business in 1981, we were able to spend most of our working day in contact with employees, improving our customer relations, and looking for ways in which we could improve the business. It was very rewarding to be able to make improvements and see what our time and efforts would accomplish. We dealt with regulations, primarily in the labor and tax fields, but they were not overwhelming. As I look back on those years, I realize that we really had it pretty nice.

Hazardous waste disposal
Beginning in the mid-1980's, we started to see the expansion in federal regulations which, while quite frankly they did not make much sense to us, at least taken individually were not overwhelming. I'm referring to rules like OSHA's "Right To Know" rules, some of the hazardous waste rules, and most of the environmental cleanup requirements which evolved from Superfund legislation. Cumulatively, however, as more and more federal regulations were added, the time came when I spent so much time dealing with regulations that I could not effectively perform the duties necessary to run my business. Even after adding a full-time professional employee just to keep up with regulations, I now deal with so many regulations that I have little entrepreneurial spirit left. I have no pride in my accomplishments on a day-to-day basis and each day I feel more strongly that I manage a subdivision of the Federal Government.

I am not against regulations. In fact I am very sure that a society cannot live in a state of healthy civilization without well defined rules of conduct and social control. As a former teacher of life sciences, I am also an avid environmentalist. However, I am convinced that many of our regulations have no basis in logic, nor do they seem to be based on sound science. They seem to have been enacted with little or no understanding of the effect they have on the small businesses of America. I will describe my experience with a few of these regulations.

The drycleaning process rinses garments in a solvent and then evaporates the solvent from the garments. By recovering, filtering, and distilling the solvent in a closed cycle, it can be used over and over. The most commonly used solvent, perchloroethylene, usually called "perc", has been classified as a hazardous chemical because it, like most solvents, may be toxic in large doses if not handled properly. Most drycleaners pass their perc through paper filters to remove the lint and dirt. We also distill our solvent to remove the impurities which are too small to be removed by filtration. Our used filters and the residue from our distillation are considered hazardous wastes under EPA regulations issued under the Resource Conservation and Recovery Act of 1976 and expanded to cover small businesses in 1985.

Although it was not legally required, I installed a solvent recovery system in my stores in the early 1980's which allowed me to recover the perc from my used filters and to re-process my still residue to recover over 99% of any remaining perc. In this way, I recovered about 800 gallons of solvent per year, which would otherwise have been lost in the waste stream. This obviously benefited both my pocketbook and the environment. The used filters were then disposed of in the local landfill with the written approval of the Nebraska Department of Environmental Control.

Still residue was removed by a licensed waste removal company. I really felt good about this program because I was saving solvent, saving money, and protecting the environment through the most efficient recycling program possible. I even learned that a state environmental official considered these used filters an asset to landfills because they absorbed other liquids which would otherwise leach from landfills and contaminate surrounding soil or water. Everybody wins.

Then, in 1988, the EPA rescinded the exemption which allowed landfill disposal of these filters. The law no longer allows me to move the filters to my solvent recovery unit, so I pay a hazardous waste company $11,000 a year (1996 figures) to haul these filters to their facility several hundred miles away and dispose of them. I also lose the perc I would have reclaimed from these filters. I don't understand how this program protects the environment better than the program I used.

Contact water disposal
Another product of the drycleaning process is a small amount of water that is recovered during the drying process. This water has been in contact with perc and consequently contains a small amount of perc (approximately 100 parts per million) dissolved in the water. My plants each generate from a quart to three gallons of this contact water per day. The EPA has approved three methods for disposal of this water. Directly to the floor drain (if the local sewer utility approves), through evaporation (if the local and state environmental authorities approve), or removal by a licensed hazardous waste company (a very expensive alternative).

I am aware of many very expensive contamination cleanup projects which have resulted from the legal disposal of products with very low levels of perc. A good example is one recently settled by the International Fabricare Institute (IFI) in Silver Spring, Maryland. This is our largest trade organization and they operate a training facility which uses a full range of drycleaning equipment.

In the past, IFI legally disposed of all waste, including their contact water. In 1992, a suit was filed against IFI naming them as the responsible party for perc contamination from a leaking sewer downstream from the IFI facility. The suit was complicated and was settled in 1996, costing IFI well over one million dollars. This and many similar incidents lead me and most drycleaners to choose not to dispose of our contact water in the drain, even when it is legal to do so. For this reason, I initiated a procedure in 1990 to take my contact water to one plant where I converted an unused still to a very efficient evaporator. The contact water was evaporated above the roof and dissipated harmlessly with no adverse effects on any person and no chance of environmental contamination.

In November, 1996, representatives from the EPA regional office visited two of my plants and cited me for transporting this contact water without a license. When asked what they recommended as a disposal method, they suggested evaporation on-site at each location, disposal in the drain, or removal by a licensed hazardous waste company. We asked for a clarification on how a product could be labeled hazardous and still be disposed of in the drain. To allow drain disposal but prohibit me from moving this water to my evaporator a few miles away did not seem logical to me. It also did not seem logical to require me to pay several hundred dollars per barrel for a waste disposal company to remove the water, nor did it seem logical to require a separate evaporator in each plant for the elimination of such a small amount of water.

The EPA's response did not address our points, but did inform me that I could not haul the water without a proper permit, which would make the procedure very complicated and expensive. Since that notification I have discontinued the transportation of this water. This regulation and its interpretation are not based on logic, common sense, or sound science, but I'm certainly not hauling contact water now!

Cleanup standards
My industry deals with other regulations on a daily basis which are based on arbitrary numbers rather than on good science. One of these is the contamination cleanup standard. Each state sets this standard, but most are set by applying the Federal Drinking Water Standard of a maximum contamination of five parts per billion to water and soil in each state. I know of many drycleaners, several of them personal friends, who are in various phases of contamination litigation, including bankruptcy, because of the nightmare called "strict and joint liability".

Prior to the EPA's regulation of perc and its waste products, many drycleaners disposed of filters and still residue through normal trash disposal methods. Now landlords, lenders, neighbors, or other parties sue for the cleanup of these properties to levels which are not only illogical, but not even attainable by any existing technology. These suits are the unintended products of irrelevant EPA standards. I lose a lot of sleep wondering when I will be served with a contamination suit and why my government enacted legislation which could bankrupt me for past actions which were legal when they occurred.

Workplace exposure standards
Another federal action which I simply do not understand is the OSHA treatment of perc. The present exposure standard is 100 parts per million, a time-weighted average adequate for a working lifetime. In 1989, OSHA reduced the permissible exposure level for perc fumes in the workplace to 25 parts per million as the maximum vapor our employees could be exposed to for eight hours each day over a lifetime in the workplace.

The standard was purely arbitrary and infeasible. The Court of Appeals agreed, forcing OSHA to return the standard to the previous level. Now the industry publications indicate that OSHA plans to try to lower the standard again within the next few months, again without any new evidence or scientific justification. I have studied the Toxicological Profile for Tetrachloroethylene (another chemical name for perc), August, 1995, prepared for the U.S. Department of Health and Human Services, and I can find no logical health reason to lower the standard.

I am very frustrated by the actions of OSHA, the EPA, and other regulatory agencies, but feel helpless. Those of us in small businesses have no choice but to comply with regulators who do not think we can provide safe and healthy workplaces for our employees. In late 1995, during one of the numerous closings of federal offices, I saw then-Secretary of Labor Robert Reich address a group of his OSHA employees. On C-SPAN, he told them that the health of great numbers of America's workers was in jeopardy because his OSHA inspectors were not on duty. What an insult! To imply that we provide safe conditions only when OSHA is "on patrol" certainly doesn't give much credit to the integrity of America's small business owners.

EPA places perc in a category somewhere between a possible and a probable carcinogen. The irony is that this classification is based on animal studies, which are generally considered acceptable only when there is little human epidemiological evidence. For perc, however, there are six decades of human exposure, and a plethora of scientific studies. They clearly show no cancer risk, at least to humans. The risk to rodents, or at least to certain species of rodents, may be another matter but should not be the EPA's concern.

The EPA's creeping classification of perc as even a possible carcinogen without scientific evidence is very unfair to an entire industry. That single action on the part of the EPA opens the door to legal suits from every employee or former employee, and every customer, of every drycleaner in America. This is a very good example of an action taken by a regulator which is meant in good faith, but which is not based on sound science and which could devastate an entire industry.

And still more regulations
There are a number of other federal regulations which are nearly impossible to comply with. Some are in conflict with each other, such as EEOC restrictions on pre-employment questions, which may result in the employment of non-citizens with improper documents. Of course, this would put us in violation of INS rules and subject us to significant fines. Polygraph rules make it impossible for me to investigate employee dishonesty effectively.

To avoid even the chance of violating child labor laws, I simply do not hire young people in protected categories. I refuse to allow extra work requested by ambitious employees because of the chance of violating overtime laws. I accept sub-standard performance from some employees because of the fear of suits under the Americans with Disabilities Act. Many provisions of the Right To Know laws are not practical when applied to small businesses. There are many more federal regulations to deal with each day, and when added to state and local regulations, the burden is nearly impossible for small business owners.

The really sad aspect of this situation is that my 27 and 25 year old sons, both of whom help me in the business, have asked me not to pass the business on to them. Their sole reason for declining ownership of a very good business is a reluctance to spend the next 40 years of their lives struggling with government interference and litigation in their business. I am very concerned that young people in America with vision and ambition will be increasingly reluctant to enter the business world as they become more aware of governmental interference.

If the intent of regulators is to choke small business out of existence, the actions of past years have been very effective. However, if the Congress of the United States wants small businesses to survive and prosper it is imperative to rein in the regulators and put an end to all current and proposed regulation not based on good logic, good science, and good economics. Someone once said government could serve business best by getting out of the way. I don't know a better way to say it.