The Boston Globe’s Megan Woolhouse reported earlier this week on a civil lawsuit against construction contractors and Walmart for the wrongful death of Romulo de Oliveira Santos, 47. The Brazilian immigrant and a crew of other workers were assigned to tear down the ceilings and walls on the night of September 8, 2008 at a Walmart in Walpole, Massachusetts. The workers weren’t made aware of the live electrical wires, and Santos was electrocuted and fatally burned. Woolhouse writes the victim’s family seeks:
“$5 million in damages from Walmart and two subcontractors, alleging the conditions that led to Santos’ electrocution are part of a pattern of unsafe practices at Walmart construction sites, including the hiring of unlicensed contractors and so-called straw men to obtain local permits.”
It’s a legal strategy to hold the global retail giant responsible for the actions of its construction contractors. The case is being heard in a Massachusetts Superior Court.
I couldn’t help but notice the reference to OSHA’s investigation of Mr. Santos’ death. Woolhouse indicates that Walmart was not sanctioned by OSHA, but reported that two firms hired by Walmart to perform the work received OSHA citations. Marcy Goldstein-Gelb of the Massachusetts Coalition for Occupational Safety and Health (MassCOSH) told the Globe reporter how this case illustrates the deficiency in our worker safety regulatory system, where contractors are sanctioned, but their corporate clients are not held accountable.
Here’s what I learned today about the sanctions imposed by OSHA following Mr. Santos’ death. His employer, Italo Masonry, was cited in March 2009 for 8 serious violations for electrical hazards, unsafe scaffolds, and inadequate training and accident prevention programs. OSHA proposed a $9,300 penalty. T&M Electric was also cited by federal OSHA for five serious violations of electrical and other standards. OSHA proposed a $6,450 penalty.
Sounds like OSHA was trying to hold someone accountable, right? Maybe not Walmart, but at least the contractors involved in the work that led to Mr. Santos’ death.
The problem is, neither firm has paid the fine. A Labor Department spokesperson confirmed that neither Italo Masonry nor T&M Electric paid the monetary penalty, and both cases have been referred for debt collection. It appears both firms are still in business.
How effective is a sanction if it is simply ignored?
Let me give an example you hire someone to fix your roof, and a worker falls off, should you be responsible if you ensured that the contractor had the required licenses, and you did not closely supervise the work? Should you be liable for the injuries? Of course part of it is an attempt to get around the workmans comp laws and get the lawyers more money.
It is very common for corporations to contract out their renovation projects. Often this is done through a related subsidiary that is little more than a dummy corporation that allows one more level of limited liability. Many of these subsidiaries do no actual work but contract out jobs to contractors that act as little more than clearing houses linking projects, usually just part of a project, to a subcontractor who may subcontract some or all of the job to another contractor. Even individual workers can be signed on as an independent contractor. Which leaves safety as the responsibility of the person both most likely to be injured and the person profiting the least.
With each step both the profit margins and accountability go down. As profits get slim the tendency is for the businesses to spend less on training, safety equipment, and trained employees. If, when, an accident happens the last contractor in line, sometimes the individual worker acting as an independent contractor, takes most of the blame.
Not uncommon to have smaller operators recreate the company time after time under a slightly different name as costly mistakes, and lawsuits over missing insurance, paying the labor, and injuries pile up. Most of their injured employees end up in the ER with the state picking up the bill. As you go down the chain of contracting the more immigrants, and illegal immigrants, get used. Immigrants are seen as being more likely to work a dangerous job, less likely to complain, or complain to authorities, and they work cheap. Free, if you can avoid paying them. A person who doesn’t speak english and may be in the country illegally are far less likely to go to authorities and demand their wages.
As always corporations, and business in general, are all about privatizing profits and socializing liabilities. Subcontracting through a string of organizations helps keep costs, and the costs of worker injuries, low.
This is a terrible tragedy and Wal Mart does not want workers dying or getting hurt on their construction sites. I know everybody hates Wal Mart but they are providing goods to citizens that want them. I am sure that after this terrible tragedy Wal Mart will do a better job at screening sub contractors that are working on their construction sites. Third party over action cases are common in construction. This is why owners and general contractors are named as additional insureds by the sub contractors insurance policy and contracts require indemnification. Screening contractors that follow safe practices is the issue. Even after screening one they may follow unsafe practices. I deal with it every day. Most sub contractors are small and have limited resources. OSHA needs to do a better job at helping these small contractors develop and implement their safety programs instead of fining them after the fact or after a terrible tragedy has taken place. Part of any OSHA settlement should require the employer to conduct training and implement safe practices. Just fining becomes the cost of doing business.
But then again what do you expect from OSHA when the Secretary of Labor is the new Sheriff in town.