Employers face mold problems

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Employers face mold problems

Mon Aug 12, 8:49 AM ET

Armour USA TODAY

After moving into a new office building in New Orleans, Sherry Watters and

her co-workers began complaining of odd ailments. Rashes. Runny noses.

Breathing problems so severe that some employees carted oxygen to meetings.

Watters never thought leaking water from roofs, pipes and other sources was

to blame for her headaches and the other complaints.

But now the lawyer at the Louisiana Department of Social Services is

convinced that water damage caused a toxic mold infestation that sickened

hundreds of staffers.

''We could see the mold, the big black spots on the ceiling,'' says Watters,

45, who was relocated this year along with other employees from the Plaza

Tower office building.

''It was in the vents, the air ducts. We just wanted a safe and healthy work

environment. It was scary.''

Already a costly hazard for homeowners, mold is fast becoming a pressing

legal and health problem for employers as well.

Mold has shuttered public school buildings and hospital wings, prompted

employers to scramble for alternative work sites, and left contractors

paying multimillion-dollar jury awards.

Employees are filing lawsuits about health problems they say were caused by

mold. They're refusing to work in buildings they suspect are infested.

And in some cases, companies are spending millions of dollars on

environmental tests, new office buildings and remediation efforts after

workers complain.

In New Orleans, a class-action lawsuit against the Plaza Tower owner and the

state is pending; employees say the owner was aware of the mold problem but

covered it up. B.G. Real Estate, which manages the property, referred

inquiries to a lawyer who did not return calls seeking comment.

Thousands of lawsuits have been filed in the past decade, and many of the

largest settlements and jury awards involve commercial buildings.

No employer is immune: In July, Hilton Hotels closed part of a facility in

Hawaii after mold was found by a cleaning attendant. Guests were relocated,

and a search is now on for the cause of the moisture.

It's an increasingly familiar story. Other organizations, such as medical

centers, elementary schools, hotels, day care centers, publishers and

government agencies have grappled with mold problems in the past few years.

Employees say they've experienced memory problems, bloody urine, rashes,

suppressed immunity, canker sores, spontaneous nose bleeds and respiratory

ailments so severe that they've led to hospitalizations.

Critics question science

But skeptics say concerns about mold are mostly hype and pseudo-science.

''There's a lot of hysteria that comes from the media, and that prompts

people to be afraid,'' says Perrone, a lawyer in Newark, N.J., at

Mc & English, who represents property owners in mold claims.

''There's a lot of overreaction and overkill. This is a litigation trend.

Attorneys have realized they can bring a case and make money.''

But the concern is taking a toll on employers, commercial contractors and

managers of office buildings.

The impact:

* Relocations. Employers have been forced to seal offices or relocate

hundreds of workers because of mold.

The County Courthouse in Stuart, Fla., was closed in 1995 and

completely gutted after toxic mold was discovered. Because of fears of

contamination, even paperwork had to be left behind -- copied later by

cleanup crews in airtight clothes resembling moon suits.

That's hardly unusual. In several cases, employees have been banned from

bringing their belongings with them to a new work site unless they

decontaminate the papers themselves.

The county later sued the construction manager and won a $14 million jury

award to cover cleanup and other costs.

* First-of-a-kind government regulation. In a step that is garnering

attention across the USA, California lawmakers in 2001 passed legislation

that calls for a study by the California Department of Health Services that

could ultimately lead to the first indoor air quality standards for mold

spores.

In addition, the state's Occupational Safety and Health Standards Board has

just adopted a new regulation requiring the conditions that cause mold, such

as uncontrolled intrusion or accumulation of water, to be corrected as a

basic measure of sanitation.

* Litigation. About 9,000 lawsuits involving toxic mold have been filed in

the USA and Canada in the last 10 years, according to National Underwriter

Property & Casualty -- Risk & Benefits Management. Personal injury claims

are being filed against building owners and property managers; the rise in

class-action cases represents an additional financial threat to employers.

Some workers also are bringing lawsuits about the way employers handle

mold-related health concerns. They're asserting that health reactions to

mold are covered under the federal Americans with Disabilities Act. More are

asking employers for accommodations such as new offices, air-quality testing

and duct cleaning.

An HIV ( news - web sites)-positive employee at Newport News Shipbuilding &

Drydock in Virginia complained about his allergy to mold, and the Equal

Employment Opportunity Commission (EEOC) filed a lawsuit in 1996, saying the

company failed to make reasonable accommodations for the employee, but the

case was dismissed.

''It can be covered in some cases,'' says Kuczynski, a lawyer at the

EEOC in Washington. ''Some people believe these are psychological, not

physical, but psychological issues also are covered. It's an area that

people are saying we will hear more about.''

Mold cases are costly

Mold cases can be costly, even when lawsuits aren't filed. After some

buildings at Nicholls State University in Thibodaux, La., were saturated

with floodwater, maintenance crews carried out cleanup and repair. Returning

six weeks later, biological sciences professor Green walked into the

hall in the building where he teaches and knew something was amiss.

''Excuse the expression, but I damned near died,'' he says.

Green says he could smell the musty odor of mold, which caused him to leave

at the end of the day with headaches and a raspy voice. Within three days,

he says he could barely speak. Colleagues complained, and some students

wouldn't go to class.

The university wound up spending $130,000 to clean the roughly

67,000-square-foot building in 2001. Workers in airtight suits worked the

weekend as offices remained closed or sealed in plastic.

''We'd read horror stories (about mold) and didn't want to be part of

that,'' spokesman Delaune says. ''It cost us a lot of money to

address it head-on, but we had no choice. ''

But in an example of just how litigious mold issues have become, Green was

startled to receive calls from out-of-state lawyers eager to take a case --

even though he had no plans to sue.

Lawsuits can come with staggering price tags. After Santa Clara County

temporarily closed its courthouse in San , Calif., because of mold,

they sued the general contractor, architect and others for alleged building

deficiencies. The case was settled last year for $12 million.

Spokesmen for the general contractor and architectural firm both said

representatives who could comment on the case were not available.

To keep business running, the county had to move employees to makeshift

offices -- purchasing trailers, running cable for computers, setting up

plumbing, lighting and security.

''It's like building a mini city,'' says McGregor, a San Diego lawyer

who represented the county in the case. ''I've collected maybe $40 (million)

or $50 million for various types of building managers. These aren't condos

or homes. These are commercial buildings.''

To skeptics, such cases are an example of how mold is turning into a runaway

litigation train. Lawyers stand to make such a killing, they say, that cases

are being brought even though the science behind toxic molds' health effects

still isn't proven.

But plaintiff lawyers maintain that too many employers and building managers

aren't taking workers' health concerns seriously enough.

''The average owner of a building, rather than trying to do what's right,

tries to cover it up,'' says Madro Bandaries, a lawyer at Gretna, La.-based

Amato & Creely, which is handling several cases involving mold in the

workplace. ''The buildings become petri dishes for mold. This is an issue

employers are going to have to deal with.''

'Nightmare' for employers

While some ignore complaints, employers are taking a variety of approaches

when coping with mold. Some are taking epidemiological surveys of the

building where they question workers about their health complaints and

compare it with the results of surveys done in control buildings where no

mold has been found.

Employers and office building owners also are bringing in doctors and

industrial hygienists to talk to workers about what's being done.

But more are abandoning buildings altogether, moving employees to trailers

and makeshift locations. Millions of dollars are spent on securing new space

and decontaminating office equipment -- money employers must then try to

recover by suing the building contractor, owner, managers or designer.

In some states, workers have no recourse other than filing workers'

compensation cases.

''The biggest cases involve commercial buildings. It's the ultimate

nightmare for employers,'' says on, a Woodland Hills,

Calif., lawyer at on Vick & Capella, who took his first mold case in

1995. He now has 1,000 lawsuits pending.

''One bad case could put them out of business.''

It's a risk Kathy Masera understands. The publisher of California Job

Journal, an employment newspaper based in Sacramento that serves Northern

California, leased space in a building that was contaminated with mold from

a broken pipe, according to a lawsuit and an article in the Occupational

Safety and Health Administration ( news - web sites)'s Occupational Safety &

Health magazine.

The mold colonization was so rampant that Masera says some workers developed

spontaneous nosebleeds; Masera says she wound up in the hospital with

respiratory infections. Even the office plants, she says, withered and

yellowed.

The publisher was forced to relocate in two days, and decontamination

workers in airtight suits scoured belongings -- down to the paper clips.

According to the lawsuit and article, almost everything had to be left

behind, including office chairs and phone books.

All her 30 employees had to dry clean their clothes before stepping into the

new office, in case mold spores were lurking in blazers and slacks.

She filed a lawsuit against the building's property manager, Pacific Gulf

Properties of Newport Beach, Calif., and the case was settled this year.

The company did not return calls seeking comment.

''It cost us a fortune, and it was heart-wrenching to see people you care

about who are so sick you have to send them home,'' Masera says.

''I was frightened to death. And you can't recover lost productivity. You

can't recover that cost.''