As 10th Anniversary of deadly fire looms, nightclub owners still owe workers’ comp fine

Ten years ago, excited music fans set out to see a show featuring the band Great White at the Station nightclub in Warwick, Rhode Island. In a horrific turn of events, the club became an inferno where one-hundred people –including a band member and four club employees– lost their lives.

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In the aftermath of the fire, there were a lot of revelations about things like poorly-staged pyrotechnics, botched fire inspections, and lax building code standards, but one of the lesser talked-about discoveries involves workers’ compensation insurance….or rather, the marked lack of it.

After four of the club staff died in the Station fire on February 20, 2003, it came to light that club owners Michael and Jeffrey Derderian (operating as DERCO, LLC) carried no workers’ compensation policy on its employees. Later that year, the state Department of Labor fined the Derderians and their corporation for not complying with the law mandating worker coverage.

The fine, which amounted to $1.066 million, was the maximum possible under Rhode Island law and the biggest workers’ comp penalty imposed by the state at that time.  It was subsequently appealed and has been frozen there ever since. That is, until the beginning of this month. A workers’ compensation court judge has set out to find why the fine has yet to be paid.

Workers’ Compensation Court Judge George E. Healy, Jr. met with attorneys for the Station’s former owners and lawyers for the Department of Labor and Training two weeks ago.  The action apparently came about as a result of a Rhode Island paper inquiring as to why the record-setting penalty had not been enforced or vacated after eight years.

In response, the Department of Labor and Training –which is a party to the case– released a statement about the inquiry.

“At present, the Department of Labor and Training believes that it followed standard procedures concerning any required notifications to the Workers’ Compensation Court in the case of Michael and Jeffrey Derderian. However, the Department of Labor and Training and the  Workers’ Compensation court are working together to investigate the matter further.”

Which is code for, you know, Hey, people are looking! Do something!

In his own statement, Judge Healy said, “As you know, these matters have been pending before the Rhode Island Workers’ Compensation Court for some time. While there has been much discussion recently about why this matter has languished, the goal for our meeting…was simply to ensure that the file was back on course for decision.”

He also noted that both sides would be given adequate time to prepare briefs in the case and ready responses to any new arguments, adding that the matter would be ready for Appellate Panel submission by February 28th, with a decision no later than April 1st.

“While it is unfortunate that circumstances conspired to delay this case,” said Judge Healy, “it is my sincere hope that at this point, the matter will soon be concluded in this forum.”

What is even more unfortunate is that families of the deceased workers did not receive the death and wage benefits that were their entitlement under the workers compensation law. Rhode Island, by its lack of responsiveness in this case, is sending a very poor message of condolence to those families.

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