Clark Oil Case

A couple guys are sitting in the lunch room at the refinery where they work. They were killed in an explosion which originated outside of the lunch room when an untrained, unqualified company mechanic made a mistake in repairing a piece of equipment at the plant.

The guys got some money under the workers compensation act, which is great but limits the recovery you can get. So they sued Clark's parent company/shareholder. That company had allegedly made a determination to take a great deal of capital as profits and had limited company reinvestment in infrastructure and overhead including safety, maintenance and employee compensation. Apparently as a result Clark hired untrained and unqualified mechanics to work on an increasing number of failing equipment.

The parent company argued it had no control over the day to day operations of Clark, which is a critical factor in assessing liability.

Corporations are considered separate entities and generally one company is not charged with responsibility for the actions of another corporation. But the court looked closely at the parent company's actions to determine that it was not entitled to avoid trial via a motion for summary judgment.

I don't recall the ultimate disposition of the case, but it sure says a lot about how corporations can be run. Now don't get me wrong, I think the workers compensation act is a pretty good system and much of the time the money that corporations pay out when not protected by the act is obscene. And no doubt Clark was responsible itself for what happened. But in the most egregious situations to protect a parent company in this situation just rewards a company for setting up subsidiaries which it can divest when they kill people.

Maybe I just don't understand how we can be in favor of Gekko when he makes his speech about greed is good, and be opposed to the enterprising hitman who is hired to kill him after fradulently emptying his bank account and stealing all the worldly possessions from his home.