Wal-Mart Spends Big Bucks To Fight $7K Worker Death Fine

Case may establish new precedents for federal monitoring of retail companies

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Wal-Mart is in court today, fighting a federal fine levied in the aftermath of the 2008 death of a store employee who was trampled by holiday crowds on the morning of Black Friday at a Valley Stream store.

In May 2009, the  Occupational Safety and Health Administration (OSHA) issued a citation for “inadequate crowd management” and charged the company $7,000, the maximum amount for a serious violation.

The government intervened when Jdimytai Damour of Queens was trampled by customers who lined up outside the Valley Stream Wal-Mart store at 5 am on the day after Thanksgiving 2008, commonly known as ‘Black Friday.’ Damour died of asphyxiation, and 11 customers were injured.

In a settlement with the Nassau County District Attorney, Wal-Mart agreed earlier that month to implement a crowd-management plan for similar sales events in its 92 New York state stores, set up a $400,000 victims’ compensation fund, and donate $1.5 million to the community.  The company avoided indictment and did not officially acknowledge any wrong-doing in the incident.

Much to the surprise of the Labor Department, Wal-Mart has spent a great deal of time and money fighting this relatively small fine. But the legal battle, being heard in a federal appeals court in Lower Manhattan today, is about much more than $7,000. 

The Department of Labor, which oversees OSHA,  wants to establish that “unruly crowds” are an occupational hazard. Therefore retailers have the responsibility to implement crowd-control plans and protect their workers.  Wal-Mart, for its part, doesn't want this to set a precedent allowing federal agencies to monitor retailers, particularly during big sales, according to The New York Times.

“This was an unusual situation but not an unforeseen one.  The store should have recognized, based on prior ‘Blitz Friday’ experiences, the need to implement effective crowd management to protect its employees,” OSHA’s Long Island Acting Director Anthony Ciuffo said in a press release at the time.

Wal-Mart disagrees.  “OSHA wants to hold Wal-Mart accountable for a standard that was not proposed or even issued at the time of the incident,” Wal-Mart spokesperson Greg Rossiter told NBCNewYork.

“The citation has very far-reaching implications for the retail industry—the entire industry, not simply us…it could subject retailers to very harsh restrictions on sales promotion,” Rossiter said.

The Times reports that OSHA is trying to define “crowd trampling” as an occupational hazard for the first time.  Wal-Mart told the Times  that this was "improper," calling it a vague standard of protection.

“[Wal-Mart] did implement another number of crowd management techniques as part of a comprehensive plan,” Rossiter said, “not only in New York state but nation-wide.”  The New York state plan was required in Wal-Mart’s settlement with Nassau County, but the retailer later independently announced improved crowd-control policies nation-wide, the Times reports.

Pointing out that it is currently in litigation, Department of Labor spokesperson Diana Petterson told NBCNewYork that they won't be able to discuss the case at length.  "The Labor Department is ultimately committed to ensuring the health and safety of workers and seeing this matter through."

The Times reports that OSHA officials are "mystified and even angered" that Wal-Mart has fought the fine so adamantly because, according to federal officials, Wal-Mart's settlement with Nassau County was an implied admission of responsibility.

According to the Times, OSHA reported that over the last five months 17% of attorney hours in the Labor Department’s New York office have been devoted to the case. Wal-Mart has spent at least $2 million on legal fees, according to an OSHA estimate.  Rossiter, however, expressed skepticism, saying “I wouldn’t put too much stock in the estimate of someone outside our company.”  OSHA employees would only speak anonymously to the Times for fear of being subpoenaed, they said.

Nassau County District Attorney Kathleen Rice, who negotiated the settlement with Wal-Mart, said in May 2009: “No prosecution could have achieved what we have been able to do with this agreement.  Rather than bringing [Wal-Mart]…to court and imposing a small fine against them, I felt it was important to require significant safety changes that will affect the whole state.”  The settlement did not include any acknowledgement of wrongdoing on Wal-Mart's part.

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