It's the heat.
We've seen it happen before - especially if the mulch was pulled from the middle of the pile and had been cooking for awhile.
A cool watering the day of installation will usually solve the problem, if not a day later.
As for the person getting sick - did he eat the stuff? Dogs will die from eating compost (I know - one of our client's dogs died doing this), but never heard of someone getting sick from laying mulch. Maybe an exercise allergy?
