Workers' comp judge upholds $1M penalty against Derderians
07/24/2003
Staff and wire reports
Posted 3:05 p.m.
PROVIDENCE -- A Workers' Compensation Court judge has upheld a $1.06
million penalty against the owners of The Station nightclub for their
failure to carry the insurance for their employees.
Brothers Michael and Jeffrey Derderian had appealed the penalty issued by
the state Department of Labor and Training after the Feb. 20 fire at their
West Warwick nightclub, saying it was excessive. The fire killed 100
people, including four workers.
The state labor department imposed the maximum possible penalty on the
club -- $1,000 a day for the three years the Derderians owned the club and
did not have workers' compensation insurance. The amount was the largest
ever imposed in a Rhode Island workers' compensation case.
The Derderians' lawyers had argued the penalty is out of line with the
department's previous rulings and was a reaction to the publicity
surrounding the tragedy, rather than a reflection of the infraction.
However, Judge Bruce Q. Morin said today that the fine was within intent
of legislation, which says such penalties may be a minimum of $500 per day
and a maximum of $1,000 a day.
The penalty imposed by the DLT hearing officer was clearly within that
range, the judge said.
In response to a state appeal of the workers' compensation ruling, Morin
also ruled that the Derderians can be held personally liable for the
violation if the state chooses to hold them responsible.
So far, the penalty has been levied against Derco, LLC, the corporation
through which they ran the club.
Morin, however, sent that issue back to the labor department hearing
officer for reconsideration.
After Morin's announcement today, Jeffrey Pine, who represents Jeffrey
Derderian, said they would most likely appeal the judge's decision to the
state Supreme Court.
Kathleen Hagerty, who represents Michael Derderian, said the brothers do
not have the money and could not pay the $1M penalty anyway. -- With
reports from The Associated Press and projo.com staff writer Jack Perry
DIGITAL EXTRA:
Read the full text of the original order by the state Department of Labor and
Training announcing the workers' compensation penalty against the
Derderians' company.
