It's a Crime

Guilty As Charged

A landmark court ruling in 1985 launched the trend. Prosecutors in Cook County, Illinois, brought murder charges against three corporate executives of Film Recovery Systems Inc., a firm that recovered silver from used photographic film. The company's employees worked around large vats of bubbling cyanide-but their foreman didn't tell them what it was. Indeed, employers had scraped off the warning labels, reassured the workers it was harmless and provided no protective gear. After a 61-year-old Polish immigrant succumbed to the hydrogen cyanide fumes and died, the ensuing investigation led to the murder charges. The executives were convicted and sentenced to 25 years in prison. Since that time, lawmakers have passed numerous laws that threaten jail time for decisions that result in injury to employees.

States have also spoken up. The California Corporate Criminal Liability Act of 1989 makes it a crime for a corporation or manager to have "actual knowledge" of a serious concealed danger associated with a product or business practice and yet fail to notify Cal-OSHA and affected employees within 15 days. Maximum penalties for managers are $25,000 and three years in prison. Under OSHA, an employer who willfully violates one of its health or safety standards, causing the death of an employee, is subject to a criminal sentence of six months in jail. (Angry labor advocates are chafing about the regulations that make the penalty for environmental harm so much stiffer than those for harm to workers.)

Steven C. Bahls, dean of Capitol University Law School in Columbus, Ohio, teaches entrepreneurship law. Freelance writer Jane Easter Bahls specializes in business and legal topics.

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This article was originally published in the June 2001 print edition of Entrepreneur with the headline: It's a Crime.

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