HelloFresh Shares Drop Amid Investigation

Shares of HelloFresh (ETR:HFGG) fell over 6% on Monday following reports of an ongoing investigation into allegations of migrant children working at its Aurora, Illinois facility.

The U.S. Department of Labor is investigating claims that at least six minors, some from Guatemala, were employed in dangerous overnight shifts at the facility, which operates under the brand Factor75, a prepared meal delivery company acquired by HelloFresh in 2020.

The allegations were highlighted by Cristobal Cavazos, executive director of Immigrant Solidarity, an advocacy group that reported the situation to federal regulators. Cavazos condemned the illegal and exploitative employment of minors under hazardous conditions.

The Department of Labor's investigation also encompasses Midway Staffing, the agency responsible for hiring at the facility. Midway Staffing has not responded to requests for comment from ABC News.

Upon learning of the situation, HelloFresh stated it was "deeply troubled" and emphasized that it immediately terminated its relationship with the staffing agency. A spokesperson noted the company maintains strict protocols to ensure all vendors adhere to rigorous global ethics and compliance standards, including a zero-tolerance policy for child labor.

Labor Department records indicate that in fiscal year 2024, 4,030 children were found working in violation of child labor laws across various industries, nearly half in hazardous conditions.

The allegations against the Aurora facility are not isolated; similar claims have emerged in the food and agriculture sectors. For instance, a sanitation contractor in Sioux City, Iowa, was fined for employing children to perform dangerous cleaning tasks at a pork processing plant, while in Massachusetts, a federal lawsuit involved a seafood processing plant allegedly forcing immigrant teenagers to work perilous overnight shifts.

Advocacy groups and labor experts have raised concerns about the persistence of such practices despite public outrage and legal action. Reid Maki, Director of Child Labor Advocacy for the National Consumers League, criticized the widespread nature of child labor violations in the U.S. and called for increased funding for the Labor Department to improve enforcement.

The fallout from these events has raised questions about HelloFresh's oversight of its supply chain and vendor relationships. With consumer trust at risk and regulatory investigations in progress, the company faces significant challenges in addressing the allegations and rebuilding its reputation in a competitive market. Moreover, the situation has ignited calls for stricter labor regulations and corporate accountability in industries reliant on migrant labor, especially given rising reports of underage workers in hazardous roles.