Recent Worker Deaths Raise Owner Responsibility Issues

By on June 9, 2018

by Tom Finan, Executive Director, Construction Forum STL

One thing that is crystal clear is that all parties involved with a hotel renovation and construction project on Washington Avenue in which two workers were killed on Monday agree that the incident was tragic.

After that things quickly become murkier.

The former International Shoe Building at 1501 Washington is being converted into the Last Hotel by Milwaukee Developer Fe Equus. The workers who died were employed by World Wrecking, a subcontractor to Gencorp Services, a site preparation and abatement contractor. Gencorp was hired directly by Fe Equus.  The public relations counsel for Fe Equus did not a return phone call from ConstructForSTL. 

PARIC Corporation is a prime contractor on the project. In response to written questions from ConstructForSTL, Ron  O’Connor, principal of O’Connor and Partners, Inc., supplied the following answers:

QUESTION 1 — Was PARIC on-site Monday, June 4th?

ANSWER — Yes, PARIC was on-site Monday as a prime contractor providing framing and other construction services on the top floors. PARIC works for the project owner under the coordination of the owner’s representative. The owner has a second and totally separate prime contractor providing selective demolition and asbestos abatement services. The two prime contractors have separate contracts with the owner, separate work schedules and insurance, and separate entrances to the structure. Work of the two prime contractors is coordinated by the owner’s representative.

QUESTION 2 – Who was in charge of the site?
ANSWER – Each prime contractor has site control for their separate execution of their contract work.

On Wednesday (June 6) the abatement contractor on the project Gencorp Services, issued a statement to ConstructForSTL: (click to see a copy of the statement)

“All of us at Gencorp Services are deeply saddened about the loss of two men’s lives in a tragic accident on Monday morning. We are working with others, including the building’s owner, to support the families of the two employees of World Wrecking, a Gencorp subcontractor.

“The two men were working from a basket suspended by a cable operated by a hoist inside an elevator shaft in the building at 1501 Washington Ave. The basket and cable were installed and inspected by Safway Group, an internationally respected engineering company that used union employees for the installation. This accident occurred during the first use of the equipment after it was installed and inspected when the cable lifting the basket failed.

“The World Wrecking employees who died in the accident were union members. World Wrecking has a signatory agreement with Laborers Local Union 42 for this project.

“The accident happened after a daily, task-specific safety briefing that morning among the contractors working on the project. Both men had 20-plus years of experience and were trained for their jobs.

“It is important to note that Gencorp Services has never received a federal, state or local violation — and multiple federal, state and local regulatory agencies have inspected our projects. On this job site, Gencorp Services has been inspected by federal, state and local agencies and we have received no violations or citations. Gencorp Services proactively complies with all federal, state and local regulations, making safety a priority for every employee as well as all subcontractors. Daily safety briefings are an essential part of how we work.

“Gencorp has engaged a forensic engineering company to investigate the accident. We are committed to a thorough and comprehensive investigation that will determine how this tragic accident happened.

“Our hearts are broken for the families and co-workers from local union laborers who have been touched by this tragic accident.”

Jeff Loebner, who is listed on his LinkedIn profile as “a little bit of everything” for Gencorp issued the statement. In an interview he said that, “the release is 100 percent correct, or we would not have sent it out.”

Loebner was formerly the owner of Envirotech, joining Gencorp in April of 2017 after Envirotech ceased operations. Gencorp is a nonunion company. It is a DBA name for Active Holdings Group. Active Holdings is a federally-approved contractor. It lists three Iowa men as officers, as well as Michael Renfroe of Defiance, who is vice president. In addition to Gencorp, Active Holdings also operates Environmental Training Safety Center a training facility for asbestos remediation safety with facilities in the same building as Gencorp on Dock Street and in Indianapolis.

Union Seeks “Responsible Owner” Legislation

The men’s deaths further stirred an ongoing fracas between the Eastern Missouri Laborers District Council and Gencorp. GenCorp has also been selected to provide remediation services at the former Municipal Courts building at 1320 Market Street, which developers plan to turn into another boutique hotel.

The International Shoe project has received approval for local property tax abatement, New Market Tax Credits and state and federal historic tax credits. The Municipal Courts building received approval for $8 million in tax increment financing, which lets developers use future taxes to finance a portion of their project.

Clinton McBride, government affairs director for Laborers Local 110 said that the union has concern about accountability for safety on work performed directly for owners on taxpayer-subsidized projects. McBride acknowledged that the union is losing market share of pre-construction work on tax-funded projects to nonunion firms. McBride said that Laborers want to ensure that all workers on such projects have received appropriate safety training and that safety practices are being monitored.

Otis Williams, executive director of the St. Louis Development Corporation, said that the City of St. Louis requires that workers on tax-subsidized projects are paid prevailing wage, but does set standards for safety training of the workers.

Victims Were Not Active Union Members

The two men who died — Joey Hale, 44, and Ben Ricks, 58, were not active members of unions. Ricks had been a member of Laborers Local 42, but had not worked in the trade for some time due to health issues. Hale had been a member of Operating Engineers Local 513, but was not working as a union member on the Last Hotel project.

Gary Elliott, business manager for EMLDC said that, contrary to the statement issued by Gencorp Services, there was no union contract with World Wrecking at the time of the accident. In January, Elliott said, World Wrecking had signed a one-off agreement with Laborers Local 42 to perform cutting torch work. Elliott said that World Wrecking had only submitted a single benefits report in February and that as far the union knew it was completed. He said that the union had not sent out the workers who were killed and that there was no active contract with Local 42 at the time of the accident.

One of the names on the February benefits report was Keith Hanford, owner of  World Wrecking.  A member of Local 42, Hanford was sued by the Laborers for benefit payments totalling $95,114.11. A consent judgment was entered against his company, Empire General Contracting. Empire subsequently ceased operations. Hanford was also mentioned  as the owner of Epic Iron and Salvage in Chesterfield in a news article about an alleged altercation between Hanford and the manager of an Indianapolis strip club. The Missouri Secretary of State has no incorporation record for Epic.

Laborers on the site filed a complaint with OSHA  against Gencorp, which is still open. Bill McDonald, area director for OSHA, responded in writing to ConstructForSTL Friday (May 8), “It’s an open inspection and I can’t comment.””

The Right to Work Advantage”

On May 29, Gencorp distributed a bulk email headed, “The Right to Work Advantage“. It carried the subhead: “Dispelling the Myths,” and stated in part:

“The competitive nature of the construction industry lends to some misleading information in regards to non-union contractors. These myths are often perpetuated by those who are in direct competition for construction or environmental projects. The truth is, non-union companies are just as efficient and effective as their counterparts. All construction projects require the same criteria of performance, safety and communication. The biggest differences between union and non-union contractors are project pricing and flexibility. Quite often, to the project owner’s benefit. Being a non-union firm, Gencorp Services acknowledges that it must excel in all these industry standards to compete effectively in the marketplace.

“Gencorp Services has an outstanding safety record since it’s inception in 2004. Being in the safety conscious environmental as well as demolition industries, drives an extremely high level of scrutiny. Team members understand for us to be the contractor of choice, our performance must be seen as the safest option. Low price fades as a benefit when there are safety concerns. Non-union companies understand this premise all to well since the alleged lack of concern for safety is regularly and falsely charged by the competition. Our entire team has a focus to maintain our excellent safety record as we continually engage in safety training in all work areas.

“Specialized contracting such as demolition and abatement dictate a critical need for well trained personnel. Full knowledge of both project types and skills needed to perform the job remains an absolute necessity. The teams on site have to be sharp as the competition lays in wait for any real or perceived missteps. Gencorp Services has an exceptional approach to every project challenge with well-trained personnel performing each task efficiently. The company actively participates in the Apprenticeship Program of the Department of Labor and engages in numerous professional training programs through it’s (sic) state licensed training affiliate as well as other training providers.”

What Does OSHA Say? 

ConstructForSTL submitted written questions to Bill McDonald, area director of the St. Louis office of OSHA regarding the 1501 Washington accident and seeking clarification on responsibility on multi-employer worksites. Because the accident at 1501 Washington is still under investigation, the questions were passed on to James Lally, deputy regional director for public affairs for the U.S. Department of Labor, who responded in writing.

CFSTL Question: Who ultimately was in control and is held responsible in a situation like this?

OSHA Answer: “There are a number of companies who were present at the worksite or had a role in the project.  At this time, OSHA’s St. Louis Area Office is conducting an active inspection to determine who had what responsibilities.”

“Section 5(a) of the Act states that each employer ‘shall furnish to each of his employees employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees.’ This section also states that each employer ‘shall comply with occupational safety and health standards promulgated under this Act.

Lally said that on multi-employer sites OSHA refers to instructions found in OSHA’s Multi-Employer Citation Policy (click here for full text). The policy states in part:

“…On multi-employer worksites (in all industry sectors), more than one employer may be citable for a hazardous condition that violates an OSHA standard. A two-step process must be followed in determining whether more than one employer is to be cited.

“Step One. The first step is to determine whether the employer is a creating, exposing, correcting, or controlling employer.

“Step Two. If the employer falls into one of these categories, it has obligations with respect to OSHA requirements. Step Two is to determine if the employer’s actions were sufficient to meet those obligations…”

The OSHA Instruction gives illustrative examples and step-by-step procedures.

CFSTL Question: Has World Wrecking received an OSHA citation?

OSHA Answer: “It appears that an inspection of World Wrecking was opened in St. Louis on June 4; still open. OSHA’s St. Louis Area Office is conducting an active inspection to determine who had what responsibilities.”

CFSTL Question: Can you please (outline) the process you will follow on this incident?

OSHA Answer: “We have three charges in relation to a fatality;
1. Find out what caused the fatality.
2. Determine if any safety or health laws were violated that led to the fatality.
3. Ensure any corrective action that is necessary occurs.”

CFSTL Question: Is it different in any way from other incidents you investigate?

OSHA Answer: “No.

“However, there are many different types of OSHA inspections, such as complaints, referrals, programmed, imminent danger, fatality. But basically two things happen:

“A.) Comprehensive. A comprehensive inspection is a substantially complete and thorough inspection of all potentially hazardous areas of the establishment. An inspection may be deemed comprehensive even though, as a result of professional judgment, not all potentially hazardous conditions or practices within those areas are inspected.

“B.)Partial. A partial inspection is one whose focus is limited to certain potentially hazardous areas, operations, conditions or practices at the establishment.

“1.) A partial inspection may be expanded based on information gathered by the Compliance Safety and Health Officer (CSHO) during the inspection process consistent with the Act and Area Office priorities.

“2.) CSHOs shall use established written guidelines and criteria, such as Agency directives and LEPs, in conjunction with information gathered during the records or program review and walkaround inspection, to determine whether expanding the scope of an inspection is warranted.”

About Tom Finan