Board rooms put on notice over job safety by convictions of film-laboratory executives

One of the risks of being an executive now is the possibility of a murder conviction. Three officials at Film Recovery Systems Inc., a now-defunct silver-recovery business in Elk Grove Village, Ill., are to be sentenced today for a minimum of 20 years in prison for the murder of one of their employees. An appeal of their conviction is pending.

It is the first time that corporate officials have been convicted for murder. Legal experts say the ruling will open the doors for more criminal prosecutions of corporate officials -- not just for murder, but for manslaughter and aggravated assault -- when accidents happen in the workplace.

``You get a case like this, and all the prosecutors across the country begin to notice it,'' says John Burkoff, a law professor at the University of Pittsburgh. ``They have the tools and the authority to prosecute this way. . . . I think we'll be seeing more cases like this.''

In 1983, Stefan Golab, a Polish immigrant working at Film Recovery Systems, died from inhaling cyanide. State prosecutors showed that employees at the plant had been ordered to scrape the skull-and-crossbones warning from drums of cyanide; that alien employees, some of whom spoke little English, weren't warned that cyanide was dangerous; and that company officials ignored instances when employees became nauseated from working with the chemical. Also, the inexpensive and widely available antidote for cyanide poisoning was not kept at the plant.

Some lawyers representing business interests say the Film Recovery case will have not have an immediate effect because it was so unusual. ``I've never seen a case with facts like this one,'' says Stephen Bokat, vice-president and general counsel at the US Chamber of Commerce. ``Most businesses conduct operations in a responsible manner vis-`a-vis workplace regulations.'' Deterrent effect of ruling

If officials think they face jail sentences for health and safety standards in their companies, they will be more careful about violations, analysts say. The Film Recovery ruling shows executives that ``it's their own scalps that are on the line, not just a $2 million fine,'' says Dr. Burkoff. In the past, he says, such a fine was considered the cost of doing business. The threat of jail ``will make them more responsible corporate individuals.''

And not only top executives. In the Film Recovery case, not just the company's president but a foreman and a plant manager were convicted. ``There will be an effect throughout the company. Supervisory personnel [will] assure that employees do use safety equipment and safety precautions,'' says Joseph Alviani, president of the New England Legal Foundation.

The murder conviction may encourage prosecutors to go after company officials for other types of workplace violations normally associated with street crime, not corporate crime, experts say. If officials can be criminally convicted of manslaughter through negligence, then they could be convicted of aggravated assault if a bad injury occurred because of negligent working conditions.

But the major effect may be on prosecutors' willingness to bring criminal charges against individuals. Prosecutors have had little success with such cases in the past (see related story). But if they think they can win, they will be more likely to spend the time to build a case.

``If I were a young prosecutor looking to make a name for myself, this is the kind of case I'd go after,'' says public-interest lawyer James Moody in Washington, D.C. It would put ``the attorney on the side of the public, the press, and the victim's family -- against the company.'' Who should be worried?

Company officials most at risk in manslaughter cases are in industries where dangerous tasks are performed -- as in construction -- or where toxic materials are handled. According to the Bureau of Labor Statistics, in 1983 mining had the highest fatality rate, with 27.6 deaths per 100,000 workers; construction ranked No. 2, with 26.3 deaths per 100,000. Chemical companies were not treated separately in the statistics.

It is not so much what the company produces, but ``the philosophy of its leadership [such as] its willingness to cut corners,'' how susceptible a company is to criminal prosecution, says Mr. Alviani.

Large companies have stringent safety standards, and in very small companies, equipment is carefully watched, safety experts say. In the chemical industry, for example, the most injuries in 1982 happened at plants employing between 20 and 99 people, according to the Bureau of Labor Statistics. In construction, the highest rate was at companies with 50 to 249 employees.

One company that will soon have its day in court is S&W Waste Inc. On Oct. 7, the company and five officials -- the president, vice-president, two managers, and a foreman -- will face manslaughter charges. Drums of hazardous waste blew up, killing three workers and injuring two others. Paul Coval, the prosecuting attorney, says the Film Recovery verdict will only strengthen his case. ``It's likely to be a precedent that we will look to and use where applicable,'' he says.

Many other companies could be worried about Friday's ruling: those in which a willful violation of safety standards resulted in a fatality. The Occupational Safety and Health Administration (OSHA) has pinpointed 126 such companies between 1980 and today.

OSHA cannot prosecute a company criminally, only civilly. It can, however, hand over cases to the Justice Department to prosecute criminally. Records of both OSHA and the Justice Department have been spotty.

Since 1972, OSHA has recommended only 30 cases to Justice for criminal prosecution for a fatality. Twenty-two of those came during the Carter administration, but Justice declined to prosecute 14 of them. Under President Reagan, only four cases have been recommended: The department declined three, and one resulted in a plea bargain, with Heckert Construction Company put on probation and fined $10,000. No officials were penalized. Why criminal charges are difficult

``Justice has its own resource constraints, and we tend to screen out the cases which would require additional investigation,'' says Daniel Mick, an attorney in the Solicitor's office at the Labor Department. ``You can save yourself and everyone else a lot of time if you only give Justice the liveliest cases.''

Critics say that OSHA is letting companies off too easily under Mr. Reagan. Thorne Auchter, a former construction company executive, served as director until last July. Robert Rowland, who was never confirmed as his successor, has resigned. His stockholdings in firms regulated by OSHA stirred controversy, as did his policies.

That has left much of the burden on state prosecutors. But they also have resource constraints, and it is difficult -- and expensive -- to bring criminal charges in a fatality. To make a murder charge stick, a prosecutor has to prove beyond a reasonable doubt that the company or official had criminal intent, an extremely high standard. Proving involuntary manslaughter is also tough.

``The state attorneys offices don't want to get involved in [industrial accident] cases,'' says Bob Yuhnke, a former assistant attorney general in Pennsylvania. ``It takes time to put the case together, to find the toxicological experts. And when they get to trial, the prosecutors don't know how to handle the evidence because they're unfamiliar with it.''

It is much easier to sue a company for damages -- either for a product such as the Dalkon Shield, or for workplace violations as with employees working with asbestos -- because gross negligence is all that has to be proven. And awards are high, typically in the hundreds of thousands of dollars. The tide turns

Though the Film Recovery case is the first victory for prosecutors, legal and public opinion has been shifting for years. As the public has become more concerned, says Mr. Alviani at New England Legal Foundation, incentives to make workplaces safer have improved. First, there was a moral incentive. When OSHA was created in 1970, companies got an economic incentive through fines. More civil proceedings and punitive damages upped the ante. Now, the risk of landing in jail is the ultimate incentive.

States are banding together to make it easier to prosecute violations of toxic and environmental standards. In the S&W case, for example, Ohio prosecutors worked with New Jersey prosecutors, where S&W is based.

The Northeast Hazardous Waste Coordinating Committee, which includes 13 states from Maine to Virginia, takes much of the burden out of preparing a complex environmental or chemical case. The state prosecuting offices share information, help locate environmental experts for trials, and help one another with investigations. A similar group has formed in the Midwest, and Western states are working on one.

Whether or not the Film Recovery verdict stands, corporate officials are on notice. ``This,'' says AFL-CIO lawyer George Cohen, ``is only the start.''