Most of the businesses in our soon-to-be-published book, “Mom and Pop vs. the Dreambusters: The Small Business Revolt Against Big Government” are about workplaces where things were less than ideal, and, if you can imagine, owners, managers and employees who were less than perfect! Some companies had sexual harassers on the premises, others were so unfortunate as to have had murders or rapes in their parking lots; a Pittsburgh branch of Pizza Hut refused to deliver pizza to minority neighborhoods in Pittsburgh on the night of the Rodney King riots in Los Angeles; an atmosphere at a medical clinic that treated mood disorders was offensive due to an employee who brought a poem with a racist title to work, and Manganas Bridge Painting company in Canonsburg, Pa., was discovered to have exposed its workers to lead.
All of these businesses were met with governmental overreaction that assumed guilt, implied malevolent intent and, in many cases, attempts to financially annihilate the business. American businesses, large or small simply don’t have the rights granted to other Americans. If you are a small business owner you will soon discover that should you err and unintentionally break one of the thousands of laws that regulate you, you will be met in court with a presumption of guilt, a process known as the Should Have Known Standard that deems you guilty of any number of violations even if you had no knowledge that they were occurring in your company. Excessive fines are the rule, so zealous government regulators may punish you for making a profit.
In our own small business, we’ve been fined $20,000 for honest mistakes in wages and hours and overtime pay, $15,000 for 401K overages, and $3,000 by OSHA for permitting a sixteen-year-old dishwasher to place a dismantled grinder in an automatic dishwasher. For each of these mistakes there was an explanation, but there is little room for explanations in government mandates.
Manganas Bridge Painting of Canonsburg, Pa., caught in the crossfire of EPA and OSHA rules, was hit not only with some of the highest all-time OSHA fines ever — $4 million, a lethal fine for a small business — but with OSHA agents in camouflage accompanied by state troopers and federal marshals videotaping him from the woods above his bridge painting job.
“I haven’t seen anything like this since I lived under the Nazi occupation of Greece in World War II,” said Nick Manganas. Though former OSHA administrator, Joseph A. Dear, later admitted to me that OSHA had “overreacted a bit” in the Manganas case, at the time the fines were levied, he explained that the agency had increased its penalties during a strategy review undertaken after the Clinton administration took office.
The key issue in “Mom and Pop vs. the Dreambusters” is not to argue against the existence of regulations and regulatory agencies, but to explore less punitive ways to deal with businesses, and to encourage governmental agencies to work with them to eliminate workplace hazards instead of eliminating the workplace.
We live in an era of legal overkill where even the coffee lady’s $6 million lawsuit is a mere pittance compared to the newest legal jackpot of $581 million awarded to an Alabama couple, George and Velma Merriweather, who were overcharged $1200 for two satellite dishes in Alabama — a state known as “Punitive Damage Heaven.” A society that designates spilled coffee and workplace flirtations as financial catastrophes is a society whose citizens live in fear.
America’s small businesses exist in a climate where their investments and life savings are a crapshoot, dependent upon the capriciousness of an unpredictable tort system. “If ever there was a prime indication that Alabama needs to address the tort reform issue, this is it,” Ragan Ingram, spokesman for Lt. Gov. Steve Windom, told the Birmingham News regarding the satellite dish overcharge. “That’s a lot of money,” he said, “Alabama business can’t survive in this kind of environment.”
But Tom Methvin, the attorney who won the $581 million verdict says he thinks “the system is working better than it ever has.”