A View from the Bar

A Conversation with Attorneys Luis C.deBaca and Leslie P. King, Esq., Shareholder, Construction Law, Carlton Fields

Lou:  Leslie, I’m sure that when you first passed the bar exam you never thought someone would start a conversation by saying “let’s talk about slavery.”

Leslie: And yet, here we are.  Many people think human trafficking is all about prostitution, or that forced labor only happens in faraway countries, but just last year a construction company owner was convicted in New York City for enslaving workers on projects including a high-rise project in midtown Manhattan and a mansion on Long Island.

Lou:  Given the state of the law, that idea that modern slavery is other people’s problem seems like a complacency that could really set a project up for a scandal. 

Leslie:  Well, first and foremost, as we see from that New York case, human trafficking and forced labor on construction projects is immoral and criminal.  I’m sure that no one reading this conversation, nor any of our clients, would ever want to contribute to such a practice.

Lou: But, of course, we aren’t so lucky as to stop there; the lack of overt forced labor on a job site doesn’t mean that our projects are “slave free.” Far from it. Construction projects are complex; while the job site might be local, the materials supply chain has become global, so in many ways you are inheriting whatever forced labor might have been involved with that input.

Leslie:  That’s right – there is of course direct liability for abuses someone participates in or turns a blind eye to.  But as a construction lawyer, I’m increasingly worried about a different type of risk – that forced labor could wreak havoc with completion and delivery requirements and penalty clauses in contracts. 

Lou:  Let me tease that out.  Supply chains now are predicated on being “just in time,” and especially as components are getting more complex, anything that keeps them from making it to the job site on time can upend a project’s schedule. 

Leslie:  Exactly.  We’ve certainly seen that with COVID-19, where many folks realized for the first time that they even had a supply chain.  In the modern slavery arena, especially after the Trade Facilitation and Trade Enforcement Act of 2015 closed off some loopholes, it is unequivocally illegal to import anything produced by forced labor, and U.S. Customs is increasingly active in not letting in tainted materials. 

Lou:  We know from the Department of Labor reports that some common building materials are more likely to have been tainted by forced labor and deserve more scrutiny.  Bamboo, timber, glass, rubber, textiles, steel, and electronics.  It’s really a sobering view. 

Leslie:  And a worrisome one.  Imagine if your client’s substantial completion deadline was compromised because a supplier fell behind as a crucial material was the subject of a Customs’  Withhold Release Order at the border.  What if the only reason that input was required is because you had specified it, and hadn’t taken the time to see if it raised any red flags for modern slavery? 

Lou: Even if we are still in early stages, no matter what role I played in a project I’d certainly want to know that my counterparts were thinking of this issue – and I’d maybe even incentivize that through contract language.

Leslie:  Contract language seems to be the way to go. Regardless of delivery method and contractual scheme, every member of the team — design professionals, construction managers, contractors, owner’s representatives, and design-builders — should promise to abide by the law in the performance of their duties.  As Customs starts seizing materials, it is going to be disruptive, but it will force the industry to at least acknowledge the problem. 

Lou:   It wouldn’t be the first time. We’ve seen around safety issues that acknowledgement (and liability) can drive change.  Hopefully freedom can become a value that is also front of mind for the industry.

Leslie:  Agreed.  But to get to that goal, we’re going to need everyone to fully engage.  From owners to architects and specifiers, from engineers to contractors – and yes, even lawyers! We all are going to have to get comfortable with your opening challenge: “Let’s talk about slavery.”