Posted 12:05 p.m.
PROVIDENCE -- Lawyers for the owners of The Station nightclub told a judge
today that the fine levied against their clients for failing to carry
workers' compensation insurance was excessive and unjust.
The state Department of Labor and Training fined Derco LLC, the company
owned by Jeffrey and Michael Derderian, $1.06 million for not having the
required insurance during the more than three years they operated the
club.
The club, located in West Warwick, was the scene of a Feb. 20 fire that
killed 100 people, injured about 200 and destroyed the building. Sixteen
nightclub employees were working that night, four of whom died.
The state's attorney, Bernard Healy, said the fine was reasonable and
dictated by law.
Businesses with one or more employees are required to carry the
insurance. Companies can be fined up to $1,000 a day for every day they
operate without it.
Attorney Kathleen Hagerty, who represents Michael Derderian, said the
maximum penalty imposed on Derco LLC is without precedent -- it's the
largest ever imposed by the state.
"The seven-figure penalty is clearly unreasonable, it's unusual, not
proper and unjust," Hagerty said.
But Healy said no evidence was presented to the department to support
deviating from the maximum.
The brothers have acknowledged they did not have the insurance from
March 2000 when they bought the club until February.
Judge Bruce Morin ordered the attorneys to meet with him on June 25 for
further deliberation in chambers. Then, Morin will decide a date to
issue a decision.
Yesterday, the state Senate unanimously approved a bill allowing the
state to levy felony charges against businesses that fail to carry the
required workers' compensation insurance. An identical bill is being
considered in the House. Failure to carry the insurance is now a
misdemeanor.
The measure comes as the state reviews nightclubs, bars, restaurants and
other businesses to see if they comply with workers' compensation laws.
If there had been workers' comp insurance at The Station, the families
of the dead employees would have been eligible for $15,000 for burial
and other expenses plus a portion of the deceased's lost wages. The
injured employees could also have qualified for compensation, depending
on the nature of their injuries and extent of disability.
