Judge grants injunction to stop business from operating without workers’ comp insurance

IOWA CITY — A judge granted a temporary injunction to the county last week, which ordered Hawkeye Waste Systems Inc., to stop operating its business or employing anyone in Johnson County because they don’t have workers’ compensation insurance.

Johnson County renewed its motion for an injunction Oct. 7 because Johnson County Attorney Rachel Zimmermann Smith found out the company’s insurance lapsed in September.

The county attorney’s office had previously reached an agreement before an injunction hearing in August, because company owner James Watts provided proof of insurance. The insurance was purchased July 11 for one year. If the business maintained insurance going forward, Zimmermann Smith said she wouldn’t ask the court for the temporary injunction.

However, Zimmermann Smith renewed her motion when the online database for the National Council on Compensation Insurance, which verifies an employer’s workers’ compensation insurance coverage, showed Hawkeye Waste had a lapse in coverage, starting Sept. 10, and remains uninsured.

Zimmermann Smith, in her motion, said Hawkeye shouldn’t be allowed to continue operating in the county without proof of workers’ compensation insurance because it’s a violation of Iowa law. Company officials have demonstrated a “lack of regard for the safety and welfare of their workers, the public and the court’s order,” she said.

Hawkeye has a history of non-compliance and has violated the agreement with the county and the court to maintain insurance coverage, the motion noted.

The county filed the initial temporary injunction when the insurance issue came to light last year after a Hawkeye Waste employee, Matthew Reuwsaat, 61, was crushed by a skid loader Oct. 31, 2024, and died Nov. 9.

The Occupational Safety and Health Administration and the Iowa Division of Workers’ Compensation investigated the accident and found the business was operating without workers’ compensation insurance.

Hawkeye Waste filed a “Notice to the court” on Oct. 3, acknowledging there had been a lapse from Sept. 10 to Oct. 1, but that it had secured a new policy, which started Oct. 2, according to the notice filing.

Last Friday, 6th Judicial District Judge Kevin McKeever, in his ruling, said the order is effective Oct. 18, unless the following conditions are met:

-Within 10 days of this order, the company must file a proof of “paid-up, in force” worker’s compensation coverage valid through Jan. 20, 2026 and verified through its insurance carrier, including proof of payment of all premiums.

-The company must file monthly proof of coverage by the 2nd of each month, including proof of payment of premiums.

-The company must also maintain continuous workers’ compensation insurance that is verifiable through a National Council on Compensation Insurance search.

If Hawkeye satisfies the above conditions, the court will stay the injunction until Jan. 20, 2026.

According to the order, a violation of this temporary injunction “constitutes contempt,” if proven.

After the judge’s ruling, Alfredo Parrish, lawyer for Hawkeye Waste, filed a motion for reconsideration. He argues the injunction has no sufficient legal basis and is being pursued for “unlawful purposes.“ Hawkeye Waste isn’t in violation and filed its proof of insurance and payment under seal after the county filed its renewed motion, Parrish said in his motion.

The county plans to file a resistance to the reconsideration motion, Zimmermann Smith told The Gazette on Tuesday.

The owner and managers of Hawkeye Waste also were charged in April for not having workers’ compensation insurance.

James Watts; Chris Watts, 30, general manager of Hawkeye Waste; Mary Sheen, 59, office manager and controller of Watts Trucking; and Chris Dohrer, 43, a contract laborer; each were charged with failure to maintain workers’ compensation insurance, a Class D felony. All have pleaded not guilty and a trial is set for Jan. 27.

Trish Mehaffey covers state and federal courts for The Gazette

Comments: (319) 398-8318; trish.mehaffey@thegazette.com