A Rhode Island Workers' Compensation Court has held the owners of the Station club personally liable for a $1.06 million penalty for failing to carry workers' comp insurance for some three years.
NASHVILLE -- A Rhode Island Workers' Compensation Court has held the owners of the Station club personally liable for a $1.06 million penalty for failing to carry workers' comp insurance for some three years.
Reversing a decision by a labor department hearing officer who held that "managers" cannot be personally liable for the fine, the court held that brothers Jeffrey and Michael Derderian's status as managers of a limited liability company fall within the meaning of the term "corporate officers." Therefore, the state's labor department has jurisdiction to impose a fine against them individually or in their capacity as members or managers of the company.
The fines are part of the ongoing fallout of the Station club fire on Feb. 20, 2003, that killed 100 people and injured another 200 during a performance by the band Great White. Four of those killed worked at the club.
This decision puts at risk the personal assets of the Derderians, owners of the Station under their company Derco LLC, to cover the fine.
In his written decision, Judge Rotondi says that the law "clearly and unambiguously outlines the legislative intent to hold all employers civilly and/or criminally liable for failing to purchase workers' compensation insurance."
Although limited liability companies do not have "corporate officers" such as a president or VP, they have "managers" who essentially perform the same functions as corporate officers.
"To shield managers from liability because they do not hold the same titles as corporate officers, in this instance," would be "absurd," the court wrote.
Jeff Pine, attorney for the Derderians, could not be immediately reached following the decision.