Employers face mold problems

by Stephanie 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. (Related item: Chat with author Jeffrey May)

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.

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 Patrick Perrone, a lawyer in Newark, N.J., at McCarter & 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 Martin 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-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 Chris 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 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 John 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 Michael 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 Martin, 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 Robert 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.”

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 Alexander Robertson, a Woodland Hills, Calif., lawyer at Robertson 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’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.”