FINAL DRAFT

LEGISLATIVE ANALYST REPORT

TO: The Honorable Board of Supervisors
FROM: Clarice Duma, Sr. Legislative Analyst
HEARING: Housing, Transportation & Land Use Committee
DATE: September 28, 2001
FILE NO.: 010238 - Warehouse-style Stores Safety Issues

SUMMARY OF REQUEST

A request made by the Office of Supervisor Tom Ammiano requests the Office of the Legislative Analyst to prepare a report, in consultation with the Director of Consumer Assurance, on recommended safety standards for warehouse-style stores. The report should include a review of findings by "CBS Evening News" and "Inside Edition," and recommendations from the American Society of Safety Engineers (ASSE), the Occupational Health and Safety Administration (OSHA), and Cal-OSHA regarding storage, handling and forklift use in warehouse stores.

EXECUTIVE SUMMARY

Warehouses are often industrial facilities used for the receipt and storage of various products, which are then transported or shipped to other locations. Warehouse-style stores combine warehouse and retail operations under one roof and provide retail services to the public. Because of the fast-paced and busy environment of some warehouse retail stores, injuries can occur to workers and to members of the public who shop in these establishments. The Department of Labor and Statistics [BLS 1997, 1998] estimates that each year, warehouse accidents kill nearly 100 workers in forklift accidents, and cause serious injuries to 20,000 additional employees. Accurate statistics regarding the number of customers who sustain injuries in these facilities are not available because warehouse operators are not required to file accident reports on those cases and OSHA safety standards only protect workers. Various safety agencies, including the American Society of Safety Engineers, have made recommendations addressing public safety in warehouse retail stores. In California, Connecticut and New Jersey, legislative efforts are also underway to prescribe safety standards aimed at reducing the number of customer-related injuries and fatalities that occur in these superstores. This October, the governor of California is expected to consider Senate Bill 486 aimed at prescribing safety standards that will protect Californians who shop in warehouse retail stores. SB 486 would require warehouses to secure highly stacked merchandise, create temporary safety zones around areas in which heavy machinery is used, and require warehouse retailers to submit annual reports of customer injuries that occur in their facilities. Passage of this legislation would however, not address all the recommendations made by safety expects such the American Society of Safety Engineers and the National Institute of Occupational Safety and Health (NIOSH). These agencies have called for the adoption of comprehensive customer and worker safety and training programs to address the safe storage and handling of merchandise as well as safe usage of warehouse equipment by workers.

BACKGROUND

Warehouses are often industrial facilities used for the receipt and storage of various products, which are then transported or shipped to other locations. Because of the fast-paced and busy environment of some warehouses, injuries often occur, particularly to the workers. According to OSHA, forklift accidents are the most common hazard experienced by warehouse workers, along with slips and falls, injuries from falling objects, chemical spills, and fires. Despite reports by OSHA that workplace fatalities have declined by half since 1970, the Department of Labor and Statistics [BLS 1997, 1998] reports that, each year, nearly 100 workers are killed in forklift accidents, and an additional 20,000 employees are seriously injured. The number of accidents increases when customer injuries are taken into account. According to BLS and OSHA, forklift overturns are the leading cause of fatalities, accounting for approximately 25 percent of all forklift-related deaths, followed by workers being struck on foot by forklifts, and falls from forklifts. Other warehouse injuries occur around docks and conveyors and involve materials storage, manual lifting and handling, and charging stations.

Warehouse Retail Stores

Warehouse Retailers in San Francisco

Warehouse-style stores (also knows as "big-box retailers" or `superstores") are facilities, which combine warehouse and retail operations under one roof and provide retail services to the public. According to the Planning Department, San Francisco has few warehouse retail stores compared to other cities. These facilities are regulated like other retail uses in the City"s Planning Code; however, their intended use and size largely determines the particular district in which they must be located, whether it is in a neighborhood commercial, industrial or manufacturing district. The Planning Department notes that many of these facilities are concentrated in the City"s industrial and manufacturing districts in the South of Market, Mission and southeastern districts. Warehouse retail stores differ in size and function. Warehouse retail stores range in size - from about 23,500 square feet to over 200,000 square feet. Their retail services include office supplies, home supplies, grocery outlet services, or a variety of retail services.

Injuries Involving the Public in Warehouse-style Stores

Various media reports have focused attention on customer injuries which occur in superstores such as Wal-Mart and Home Depot. Network programs such as Inside Edition and ABC News have conducted investigations of safety practices in warehouse stores and found that while some comply with safety standards, others continue to violate them, as described below.

Inside Edition

Last November 2000, journalists for Inside Edition, a TV program, filed a report describing inadequate safety practices at Home Depot, a nationwide home improvement store. These journalists investigated Home Depot stores in six states, and found that while some locations seemed to comply with safety standards, others were not taking proper safety precautions. They found that in the eighteen months prior to the airing of their report, 68 lawsuits, related to falling merchandise, had been filed against Home Depot. Additionally, Home Depot had also received a total of 185 claims in 1996 for various accidents that occurred in their stores. These included a fatality in a Los Angeles store involving a 79 year old shopper who was crushed by a falling pallet, which was blamed on improper forklift usage by an employee. According to this news show, between November 1999 and November 2000, at least 3 shoppers had been killed at various Home Depot stores, including a 3-year old who was killed in Idaho. In Marina Del Rey, a forklift operator was observed loading heavy merchandise without the guidance of a fellow co-worker or "spotter." Despite promises by Home Depot"s managers to improve their store"s safety record, Inside Edition found that some stores continued to stack merchandise and operate forklifts during business hours while customers are in the store.

ABC News

Last August 18, 2000, ABC News announced that thousands of people had been killed or injured by falling merchandise while shopping in warehouse-style stores. The report indicated that, with the spread of warehouse retail stores in American suburbs in the 1980s, injuries and deaths, caused by falling merchandise, had become rampant. ABC News also cited the case f a 79-year old shopper who was killed by falling merchandise in an unblocked aisles in a Los Angeles Home Depot, and another shopper in southern California who was seriously injured by falling merchandise at a local Wal-Mart. There is disagreement between the owners of the warehouse-stores and consumer advocates regarding the severity and number of injuries sustained by customers. Warehouse retail store managers state that there are few incidents of customer injuries that occur in their stores. However, consumer advocates believe that the number of injuries may be higher because some warehouse retailers are still not taking adequate safety measures to protect the public.

On an annual basis, Home Depot serves 2 billion customers, while Wal-Mart conducts over 2.5 billion customer transactions. While Home Depot has not disclosed the number of injuries that occur in its stores, Wal-Mart reports that in 1998, it received 4,000 injury claims involving falling merchandise, nationwide. ABC News reported that it is often difficult to verify these statistics because once injury cases go to court or are settled, the information is erased when records are sealed from the public. In addition, there is limited federal regulation of warehouse-style businesses such as Wal-Mart, Home Depot, Sam"s Club, Costco, Toys-R-Us, and Ikea, even in earthquake-prone areas such as California. Existing federal or state regulations only require compliance with local code requirements. Additionally, OSHA"s inspections are limited to worker injuries, and do not include members of the public. According to ABC News, the public wants these stores to improve safety by installing railings or netting on their high shelves that will keep merchandise from falling on customers.

CURRENT LAW & PRACTICE

Code Requirements in San Francisco

San Francisco Planning Code - According to the City Planning Department, warehouse-style stores do not have specific zoning requirements in San Francisco"s Planning Code which are different from other retail uses. Instead, these establishments are designated as "retail" uses in many sections of the Planning Code. Based on their intended use and size, big box retailers may be permitted in many commercial districts throughout the City, such as neighborhood commercial districts (Sections 711 - 730.1) and mixed use districts (Sections 803.2 - 818). According to staff at the Planning Department, in neighborhood commercial districts (NCDs), big box retail stores are restricted by use size, as are all retail establishments, depending upon the zoning requirements of that particular district. Staff also add that larger retail uses tend to locate in areas of the City that do not require conditional use review, and these are typically industrial and manufacturing (M-1 and M-2) districts concentrated in the South of Market, the Mission, and the southeastern districts of the City.

California Building Code - Provisions in Chapter 16 Section 1605 of the California Building Code currently require buildings and other non-building structures to be constructed to sustain specific load limitations. Staff at the San Francisco Department of Building Inspection (DBI) states that existing local and state Building Codes contain provisions requiring non-building structures, such as shelving, to support three kinds of loads: a) vertical loads (e.g. shelving should be strong enough to prevent collapse when fully loaded); b) lateral (seismic) loads (e.g. shelving should be braced or bolted to resist the shaking forces of an earthquake); and c) impact loads (e.g. shelving should be secured against forklift and similar impacts). DBI staff adds that there are currently no state or local building code regulations that require stored materials to be secured on shelves, but that the stability of secured materials is specifically addressed in State regulations enforced by Cal-OSHA.

Additionally, in terms of warehouse safety, current fire code regulations require that stored boxes or goods be at least 18 inches below fire sprinkler heads. DBI notes that the high stacking of goods on the top shelves of warehouse shelving may violate this minimum clearance requirement. The horizontal clearance in fire sprinkler heads is a requirement enforced by the SF Fire Department, although DBI personnel will note that violation if they are in a building for an inspection. At present, DBI and SFFD do not conduct routine inspections of commercial occupancies; they only inspect these facilities if permits have been issued for construction work, building alterations, or if a complaint has been received.

Federal and State OSHA Standards

The Occupational Safety and Health (OSH) Act of 1970, as well as all of the federal and state OSHA regulations, address worker safety and health in the workplace. There are, however, no existing OSHA standards that protect members of the public who visit warehouse retail stores. Under federal OSHA, private businesses are subject to regulation by their OSHA regional offices or by state OSHA regulations in regions that have state OSHA programs. With the exception of federal workers, public sector employees located in areas with state OSHA programs, are also regulated by those state standards. OSHA also provides workplaces with information and training on maintaining a safe workplace for workers.

The Occupational Health and Safety Administration (OSHA) and Cal-OSHA

OSHA has developed standards that govern the safe operation of powered industrial trucks, which include low- and high-lift trucks and forklift trucks [29 CFR¹ 1910.178 and 29 CFR 1926.600; 1926.602]. Currently, 23 states, including California (Cal-OSHA), operate their own state OSHA programs, which only protect public and private sector employees. These state programs are required to be as effective as the federal program and provide similar worker protections. Cora Gherga, the District Manager for the Cal-OSHA office in San Francisco, states that Cal-OSHA tends to be more stringent than federal OSHA regulations. OSHA standards generally limit the amount of exposure by workers to hazardous chemicals, mandate compliance with certain safety practices and equipment, and require employers to monitor hazards and maintain records of workplace injuries and illnesses.

State OSHA programs require inspections and address worker complaints. They also provide on-site consultation for small businesses. With the exception of limited federal jurisdiction, Cal-OSHA has full and sole jurisdiction over private and public sector workplaces in San Francisco, according to Ms. Gherga. She adds that there are no specific safety regulations, guidelines, nor policies and procedures for warehouses in California. Rather, when state OSHA inspectors investigate warehouses, they follow basic OSHA standards, contained in Title 8 of the California Code of Regulations. These standards address the safe storage of goods, maintenance and the safe operation of powered industrial trucks (forklifts), loading in storage shelves, protective gear for employees, the safe storage of chemicals, and training for employees on warehouse operations. According to Ms. Gherga, there are "very few" reported warehouse accidents in San Francisco on an annual basis. She adds that when serious incidents occur, they usually involve powered industrial trucks or forklifts.

California Senate Bill 486

Senate Bill 486, authored by State Senator Jackie Speier and pending approval by the governor, regulates public safety in "working warehouses" that use heavy machinery and store merchandise on shelves higher than 12 feet above the sales floor. This legislation requires owners, managers and operators of such facilities to secure merchandise stored on shelves higher than 12 feet with safety devices such as rails and netting. It also protects customers by requiring the temporary establishment of safety zones when heavy machinery is used to remove goods from shelves. Compliance with these standards must occur by July 1, 2002. This bill also imposes annual reporting requirements, effective in 2002 and 2003, of all deaths or injuries that require hospitalization on warehouses that employ more than 50 workers. The governor will consider this bill in October 2001.

AGENCY RECOMMENDATIONS

The American Society of Safety Engineers

The American Society of Safety Engineers (ASSE) recognizes that severe injuries, involving falling merchandise, lift trucks, and back injuries can occur in warehouse retail stores that serve customers. ASSE urges retailers to develop and implement comprehensive safety and training programs that educate their employees on customer and worker safety. ASSE supports the adoption of the following safety measures:

• Height policies for stacked merchandise that consider the type of shelving and type of merchandise.
• Procedures that require store personnel to regularly check the store aisles and correct misplaced items.
• Use of spotters to keep customers away whenever forklifts are in use and during the loading or off-loading of merchandise.
• Stacking merchandise when the store is closed to customers or when there is minimal customer traffic.
• Worker education and training on the safe stacking of merchandise, including handling slippery boxes.
• Greater involvement by managers in promoting safe workplace practices.

The American Society of Mechanical Engineers (ASME)/American National Standards Institute (ANSI)

ASME/ANSI B56.1-1993 contains provisions that address the maintenance and safe operation of equipment such as forklifts. Subsection 1993m 6.2.7 requires regular inspections and maintenance of specific mechanisms and devices of forklifts. These standards also require the use of restraints such as rails and chains for work that is performed from an elevated platform.

The National Institute of Occupational Safety and Health (NIOSH)

NIOSH has developed safety standards for workers who operate or work near forklifts. This agency recommends that forklift operators obtain training and licensing prior to operating forklifts. NIOSH recommends the following safety guidelines to reduce the risk of forklift incidents:

• Employer and worker compliance with OSHA regulations and standards.
• Equipment maintenance and inspections.
• The adoption of safety measures to prevent injury for workers who operate or work near forklifts.

CONCLUSIONS & RECOMMENDATIONS

There is scant information available on the number and operations of warehouse retail stores in San Francisco. Since warehouse stores are not required to report injuries that affect the public, it is hard to determine the efficacy of current safety standards. If SB 486 passes, it would address some of the concerns raised by safety experts, consumer advocates and the public who want warehouse retail stores in California to release accident data on their customers and protect public safety in their stores. This legislation would however, not adopt all the recommendations made by ASSE, ASME/ANSI and NIOSH. These agencies seek stringent health and safety standards that will increase compliance with existing OSHA rules, institute policies for stacked merchandise that would consider the type of shelving and merchandise stored in those shelves, require warehouse retail stores to use "spotters" and offer training on equipment and merchandise handling to their workers.

In terms of local regulations in the Fire, Planning, and Building Codes, it appears that current provisions may be inadequate or vague in terms of their specific reference to warehouse retail stores. A closer examination of these regulations would indicate whether specific size restrictions, routine safety inspections, and zoning, load, storage and construction requirements would be necessary as a way of reducing the incidence of injuries that occur in warehouse retail stores.

¹ Code of Federal Regulations.