The lawsuit alleges that directors at Mason-based Cintas Corp. aren't fulfilling their fiduciary duties to the company and haven't ensured there is reasonable oversight, thus exposing the firm to financial liability and decreased profits while also endangering workers.
The Manville Personal Injury Settlement Trust, which owns a small block of Cintas stock, filed the lawsuit last month in Hamilton County Common Pleas Court. Besides the company, the suit also sues Cintas' 11-member board of directors individually, including Chairman Richard Farmer; his son, CEO Scott Farmer; and Vice Chairman Robert Kohlhepp.
Cintas has been fined millions of dollars in recent years by the U.S. Occupational Safety and Health Administration (OSHA), and a congressional committee has urged regulators to conduct a comprehensive review of all Cintas facilities nationwide because of the persistent problems.
One of the citations included an unprecedented $2.78 million fine against Cintas last year for violations that led to the death of Eleazar Torres-Gomez at the company's laundry facility near Tulsa, Okla., in March 2007.
Gomez died after he jumped onto a conveyor belt to dislodge clothes that had become jammed on their way from an industrial washer to a large dryer. Gomez was dragged into the dryer, where he was trapped for 20 minutes in a compartment where temperatures reach 300 degrees Fahrenheit, until another worker discovered his badly burned corpse.
Manville's lawsuit seeks an unspecified amount of damages from Cintas and asks the court for a jury trial.
"There's a belief that Cintas is not acting in the best interests of the company," says David Cook, a Cincinnati lawyer who's on the legal team that represents the Manville Trust.
"It's clear there's been a culture that has not focused sufficiently on this issue to protect their employees."
Last fall OSHA issued a citation against Cintas over alleged safety hazards at its laundry facility in Mobile, Ala.
OSHA reported 15 violations at the Mobile site, including exposing workers to potentially lethal electrical shock hazards, to "injurious corrosive" chemicals and to large, open pits filled with waste water. The agency also stated that workers were exposed to a potentially fatal falling hazard while they were on top of the conveyors, a hazard similar to the one that killed Gomez.
Since 2003 Cintas has been cited for more than 170 OSHA violations in its facilities, including more than 70 citations that OSHA deemed could cause "death or serious physical harm."
Cintas has paid nearly $200,000 in initial penalties, including more than $30,000 in penalties for "repeated" violations of the same identical standards in multiple company locations.
In fact, Cintas has been cited for more than twice as many workplace safety violations as have its three largest competitors combined, according to the lawsuit.
Despite the record, Cintas representatives insist the company has adequate safety procedures and blame the accidents on workers who don't follow their training on how to handle machinery.
"Cintas vehemently denies the allegation" in the lawsuit, says Pamela Lowe, a company vice president. "We our confident that our leadership and directors have fulfilled their responsibilities faithfully and diligently on behalf of our shareholders and will vigorously defend our company."
After the repeated OSHA citations and resulting publicity, Cintas' stock price declined, losing more than 12 percent of its value between Jan. 3 and April 22, 2008.
The Manville Personal Injury Settlement Trust is based in New York and invests the money awarded in a landmark settlement with the Manville Corp., an asbestos manufacturer that declared bankruptcy in 1982. At the time, Manville was the largest firm ever to file bankruptcy and was the defendant in more than 16,500 lawsuits related to the adverse health effects of asbestos exposure.
Spearheading the lawsuit against Cintas is a South Carolina legal firm headed by Ron Motley, who has won major judgments against the asbestos and tobacco industries. Motley was portrayed by Bruce McGill in the 1999 film The Insider, starring Russell Crowe.
Cintas is the largest uniform supplier in North America. The company has more than 700,000 clients and operates more than 380 facilities in the United States and Canada, including 15 manufacturing plants and seven distribution centers that employ more than 30,000 people. Its largest clients include Delta Air Lines, DHL Express, Eli Lilly and NASCAR.
Cintas reported $531 million in profits for the 2008 fiscal year, which ended in May.
The company's single-minded push for increasing profits each year is what's led to a dangerous workplace environment, the lawsuit alleges.
"Employees at Cintas plants are under intense pressure to meet unreasonable production numbers," the lawsuit states. "As a result, company workers feel driven to engage in unsafe practices in order to keep the company's systems operational. This constant demand for high production at any and all costs, even the safety of its workers, was carried out with the full knowledge of Cintas management and resulted in a willful disregard of safety measures that could prevent serious, potentially life-threatening injuries."
As an example, an OSHA director determined that other Cintas workers used the same dangerous method to dislodge laundry jams on 34 occasions in the two weeks before Gomez died in Tulsa in 2007.
Two years before Gomez' death, OSHA fined Cintas for not installing guardrails and other protective equipment at its Central Islip, N.Y., laundry. The equipment that was unguarded in that case was similar to equipment involved in the Tulsa incident.
The lawsuit states that it would cost Cintas about $20,000 to install each guardrail -- or less than 10 minutes of company profit. ©