United States Gypsum (USG) Corporation

Company History & Asbestos Use in Joint Compound

United States Gypsum Company was incorporated in 1902 through the consolidation of 35 smaller gypsum producers, immediately making it the largest gypsum manufacturer in the country. Operating from its Chicago, Illinois headquarters, USG vertically integrated its supply chain — mining raw gypsite from deposits in the American West and Midwest, then processing it into finished wallboard, plaster, and finishing products at plants scattered across the country. By mid-century, the USG brand was virtually synonymous with interior wall construction in the United States.

The company’s product line grew rapidly after World War II as the American postwar housing boom created insatiable demand for fast, affordable interior finishing materials. Gypsum board — sold under USG’s Sheetrock brand — displaced traditional lath-and-plaster construction because it was cheaper, faster to install, and required less skilled labor. But gypsum board alone did not produce a finished wall surface; it required joint tape and compound to conceal seams and create a smooth, paintable surface. This system — board plus finishing compound — became the foundation of USG’s dominance in residential and commercial construction for decades.

It was in these joint compound and plaster formulations that asbestos became a critical ingredient. Chrysotile asbestos — the most commercially common fiber type — offered properties that made it attractive to product formulators in the 1950s and 1960s. When mixed into joint compound, asbestos fibers reduced cracking as the compound dried and shrank, improved adhesion to tape and board surfaces, and added a degree of fire resistance that appealed to builders seeking to meet increasingly stringent fire codes. Plaster formulations likewise used asbestos to improve workability and dimensional stability.

USG’s internal records and litigation documents have confirmed that the company was aware, at least by the early 1970s, of scientific literature linking chrysotile asbestos inhalation to pulmonary disease and lung cancer. Despite this knowledge, USG continued manufacturing asbestos-containing joint compounds and plasters until regulatory pressure, shifting liability environment, and the availability of synthetic substitutes prompted a reformulation effort that was largely complete by 1977. The company’s own reformulation timeline, however, did not trigger an immediate product recall, meaning that asbestos-containing USG products already distributed through supply chains remained in use on job sites and in warehouses well into the late 1970s and early 1980s.

USG’s asbestos exposure story differs in a significant way from manufacturers like Johns-Manville or National Gypsum. Those companies eventually sought bankruptcy protection, establishing trusts under Section 524(g) of the Bankruptcy Code. USG, by contrast, remained financially solvent and continued operating as a going concern, ultimately establishing a separate settlement trust to manage its asbestos liabilities outside of bankruptcy. Today USG operates as a subsidiary of Knauf, a German building materials group that acquired the company in 2019, but the USG Asbestos Settlement Trust continues to handle claims arising from USG’s historic products.

Asbestos-Containing USG Products & Exposure Mechanisms

USG manufactured a wide range of gypsum-based construction products, and asbestos was incorporated into several categories of finishing compounds and plasters sold throughout the United States during the peak construction years of the postwar era. The following table summarizes the principal products implicated in asbestos exposure litigation and trust fund claims.

The sanding phase of drywall finishing consistently produced the highest airborne fiber concentrations. Industrial hygiene studies conducted in the 1970s and confirmed in later peer-reviewed research found that hand sanding dried joint compound containing chrysotile asbestos generated fiber counts several times above the permissible exposure limit then in effect. Power sanding — which became common in commercial construction to accelerate finishing work — generated even higher airborne concentrations. Workers who sanded without respiratory protection in enclosed spaces, as was standard practice throughout the 1950s, 1960s, and 1970s, received cumulative fiber doses that decades later translated into elevated rates of mesothelioma and asbestosis among the drywall finishing trade.

USG Manufacturing Facilities & Mining Operations

United States Gypsum operated one of the most extensive gypsum extraction and manufacturing networks in North America. The company’s geographic footprint spanned virtually every region of the United States, positioning USG products within practical shipping distance of nearly every major construction market. Workers at these facilities, as well as construction workers in the regions they served, faced asbestos exposure from USG products.

Beyond these primary sites, USG operated or leased distribution terminals, warehouse facilities, and regional sales offices in dozens of additional metropolitan areas. Workers at manufacturing plants mixed raw gypsum with additives — including asbestos binders in the plaster and compound lines — often in poorly ventilated environments. Bag-packing operations were particularly dusty, and maintenance workers who cleaned equipment or repaired production lines frequently encountered concentrated asbestos-containing dust. While construction workers who used USG products on job sites typically receive more attention in litigation, plant workers also filed significant numbers of asbestos-related disease claims.

Drywall Workers, Plasterers & Ongoing Renovation Exposure

The drywall finishing trade represents one of the occupational groups with the highest documented rates of asbestos-related disease among those who worked during the 1950s through the 1970s. The mechanics of the work created near-constant aerosol exposure. A typical finisher would begin a project by mixing powdered setting-type compound — often a USG Durabond product — with water in a mud pan or bucket. The bag-dumping and mixing process generated clouds of fine dust; because the compound was not yet hydrated, the asbestos fibers released at this stage were at their most respirable. The worker would then apply the mixed compound over taped joints, let it cure, and sand the hardened surface to achieve a smooth, seamless finish. Sanding was the step that produced the greatest fiber release per unit of time, generating visible dustfall that settled on workers’ clothing, skin, and hair as well as floating in the air of the workspace.

Union drywall finishers working on large commercial projects — office towers, hospitals, schools, hotels — often worked in enclosed, unventilated spaces where multiple finishers sanded simultaneously. Fiber concentrations in these environments could remain elevated for hours after active sanding ceased because the smallest, most dangerous respirable fibers stayed suspended in still air. Many finishers describe working in conditions where they could see the dust in the air but had no respiratory protection because respirators were not standard practice, were not provided by employers, or were considered impractical for sustained finishing work.

Plasterers faced comparable exposures working with USG Structo-Lite and Red Top plaster products. Basecoat plastering involved spraying or troweling a thick layer of plaster onto metal lath or gypsum board, then applying finish coats by hand. Spraying operations were particularly hazardous because aerosol spray carries fibers deeply into the lung periphery where the most dangerous biological effects occur. Spray plasterers who worked without respiratory protection throughout the 1960s and early 1970s accumulated substantial cumulative doses of chrysotile asbestos that could not be recovered once deposited in lung tissue.

What makes USG’s asbestos legacy especially relevant today is the enormous stock of pre-1977 construction that remains in service across the United States. Buildings constructed or renovated between the 1950s and 1977 may contain USG joint compound and plaster products with asbestos content. Renovation, remodeling, and demolition work on these buildings continues to create fresh asbestos exposure decades after USG reformulated its products. The Occupational Safety and Health Administration estimates that millions of construction workers encounter asbestos-containing materials during renovation work each year. Drywall contractors, carpenters, painters, electricians, plumbers, and HVAC workers who disturb old joint compound without testing and proper abatement procedures face the same fundamental exposure pathway that affected previous generations of construction workers.

Homeowners undertaking do-it-yourself renovation projects represent a separate, less regulated exposure pathway. A homeowner who sands old joint compound to repair a wall or patch a ceiling before repainting may not realize that the compound was installed in 1965 and contains asbestos. Unlike commercial construction workers, homeowners typically have no training in asbestos hazard recognition, no respiratory protection, and may perform the work in small, poorly ventilated rooms. The Environmental Protection Agency recommends that suspect materials in pre-1980 buildings be sampled and analyzed by a certified laboratory before any sanding or mechanical disturbance takes place. Identifying asbestos-containing joint compound before renovation is straightforward and inexpensive; the cost of a bulk sample analysis is a small fraction of what medical treatment will cost if exposure results in disease.

Secondary exposure — also called take-home or para-occupational exposure — is a recognized route by which family members of drywall finishers and plasterers developed asbestos-related disease without ever working in the trade themselves. A finisher who came home with asbestos-laden dust on his clothing, work boots, and hair exposed spouses and children who laundered those clothes or embraced the worker after a shift. Several mesothelioma cases among spouses of drywall workers have been linked to this exposure pathway, and some asbestos trusts including the USG trust accept claims from secondary-exposure victims who can demonstrate a sufficiently close and sustained connection to an exposed worker.

USG Asbestos Settlement Trust: Status & How to File

Unlike the majority of major asbestos defendants, United States Gypsum Company never filed for bankruptcy protection. Companies such as Johns-Manville, National Gypsum, and Eagle-Picher all sought Chapter 11 reorganization in part because of the weight of asbestos liabilities, emerging from bankruptcy with 524(g) trusts funded during the reorganization. USG’s continued solvency meant it had no legal vehicle to force all present and future claimants through a single bankruptcy-supervised trust. Instead, USG negotiated directly with the plaintiffs’ bar over many years to establish the USG Asbestos Settlement Trust as a private settlement mechanism outside of bankruptcy court.

The USG trust currently pays eligible claimants at a payment percentage of approximately 11 percent of the scheduled value assigned to their disease category. Payment percentages in asbestos trusts are not fixed permanently — they can be adjusted upward or downward by trust administrators as claims come in and the trust’s projected long-term liabilities are recalculated. However, the 11 percent figure has been relatively stable in recent years, and attorneys who file USG claims regularly can provide clients with a current expectation of recovery. For a mesothelioma patient with a maximum scheduled value, an 11 percent payment still represents a meaningful sum, and it is paid in addition to — not instead of — any other trust or litigation recovery the claimant pursues.

To be eligible for payment from the USG trust, a claimant must demonstrate two things: a qualifying diagnosis and qualifying exposure to a USG asbestos-containing product. The qualifying diagnoses follow the standard disease hierarchy used by most asbestos trusts, placing mesothelioma at the highest scheduled value, followed by lung cancer with asbestos markers, asbestosis, and other asbestos-related conditions. Exposure criteria require evidence that the claimant worked with or around a specific USG asbestos-containing product for a qualifying period. The trust’s exposure criteria may be satisfied by direct testimony from the claimant, corroborating affidavits from coworkers, employment records placing the claimant at a job site where USG products were used, or contractor purchasing records showing USG products were ordered for a specific project.

The USG trust differs from the National Gypsum trust, which is the other major gypsum-industry asbestos settlement vehicle. National Gypsum did file for bankruptcy and its trust was created through that proceeding. The National Gypsum Trust and the USG trust handle claims against different product lines, and many drywall finishers and plasterers worked with products from both companies — meaning they may have valid claims against both trusts simultaneously. This concurrent-filing strategy is standard practice in mesothelioma representation and is not considered double recovery; it reflects the reality that a worker exposed to multiple manufacturers’ asbestos products has a legitimate claim against each company that contributed to the cumulative exposure burden.

The statute of limitations for filing asbestos trust claims varies by state and by the nature of the claim (personal injury versus wrongful death). Most states require filing within one to three years of diagnosis or discovery of the asbestos connection. For deceased workers, surviving family members may bring wrongful death claims, often within two years of the date of death, though specific deadlines depend on state law. An experienced mesothelioma attorney can identify the controlling limitations period and ensure claims are filed before that deadline passes. Given the 11 percent payment percentage, the USG trust alone rarely resolves a mesothelioma case; it is typically one of several trust filings made on behalf of a client who may have additional claims against pipe insulation manufacturers, brake lining companies, or other asbestos product producers whose materials were also present on the same job sites where USG compound was used.

Because USG remained solvent and did not reorganize through bankruptcy, the trust’s funding and longevity differ from the pressures facing some underfunded bankruptcy trusts. Claimants dealing with USG can generally expect consistent processing timelines and payment percentages rather than the volatility that can affect trusts with rapidly depleting assets. That said, promptly filing a claim once a diagnosis is confirmed is always advisable, both to comply with state statute of limitations and to begin the resolution process as soon as possible for a patient who may have limited time and escalating medical needs.

Frequently Asked Questions