Thursday, October 20, 2005

Get Out Your Violins: Small Business Victim of the Year

In this line of work, I come across a lot of very sad stories. Children growing up without their fathers or mothers, newlyweds losing their soul-mates, divorces and bankruptcies caused by disabling workplace injuries...

But this story from Business Week is definitely one of the saddest stories I've ever heard:
Last May, an inspector from the Occupational Safety & Health Administration arrived at Jancoa Janitorial Services in Cincinnati for a surprise inspection. Before the inspector left, owner Tony Miller had been cited for two extension cord violations and hit with a $9,000 fine. Miller was determined to fight -- until he learned that his legal fees would exceed the amount of the penalty. He settled for $5,000 and put the first blemish on his record after 33 years in business.

It's a common scenario. While large companies often hire OSHA consultants and attorneys to help them comply with labyrinthine regulations and fight fines, few small businesses have such resources. About 90% of small companies hit with OSHA fines settled or paid the fines without contest in 2004, according to the Labor Dept.

But doing so may have unwelcome consequences. Potential customers may ask to see your business record and be put off by citations, and your insurance premiums may go up. If OSHA finds a similar problem in the future, your next citation may carry stiffer fines and penalties, says Patrick Lyden, manager of legislative affairs for the National Federation of Independent Business.
Let me get myself together for a minute. OK.

Happily for all the small business owners of America, Congressman Charlie Norwood has come up with some solutions to this problem, as we've learned before. As Business Week reports it, "Briefly, the bills would allow companies with fewer than 100 employees and a net worth of less than $7 million to recoup attorneys' fees after a successful appeal. They would also grant leniency to businesses that can come up with a plausible reason for not meeting the 15-day deadline for filing an appeal."

Clearly OSHA made some sort of terrible mistake. Jancoa, after all, was the winner of the Greater Cincinnati Chamber of Commerce Small Business of the Year award in 2003. How dare OSHA even cross their threshold.

But wait, let's turn over that rock. Turns out Jancoa is not exactly a paragon of virtue. In fact, it's one of the bad guys in the struggle of Cincinnati janitors to organize. Speaking at a Janitors for Justice rally last summer,
Wilberto Pacheco said Jancoa Janitorial Services Inc. fired him for his union activities. A complaint of unfair labor practice is pending before the National Labor Relations Board.

"They're not the company they portray themselves to be," Pacheco said. "They've been harassing us day, night. That's why we're here, and also for the new workers that come into Jancoa."
According to SEIU organizer Matt Ryan, Jancoa doesn't play very nicely. After organizing efforts began in 2004,
Jancoa responded by threatening employees, including telling some immigrant workers that they would run into trouble with the U.S. Immigration and Naturalization Service, Ryan said.


Ryan said it's seeking an agreement with Jancoa so janitors in the area can achieve livable wages and health benefits while contractors can remain competitive. The SEIU works to develop basic labor standards that are accepted and applied by most contractors in the market, Ryan said.

Jancoa, like many other contractors, offers health benefits, but they are too expensive for workers to afford with the wages they earn, Ryan said. "They're there on paper, but very few people take them."
Not hard to see why they're the darling of Business Week and a shoe-in to win this year's Small Business Victim of the Year award.

And one more thing. Is it possible that the OSHA citations may have had something to do with unsafe conditions that could have caused workers to be injured or killed?


UPDATE: A reader writes to inform me that Jancoa actually has 287 employees and therefore wouldn't be small enough to be covered under Norwood's bill.

So, if this is such a big problem, you'd think that Business Week might be able to find at least one company that would actually have been helped by Norwood's bill.

Or, as Emily Litella would say, "Nevermind."