United States: Straight Advice For Your Clients: Go Beyond Black Letter Law To Inform, Advocate

For practicing attorneys, "black-letter law" does not mean much in the real world. Black-letter law simply tells us what the law would say before facts are applied to a given situation. But the law only matters when facts come into play. Businesses do not care about abstract principles of law, but rather about how the law, in application, affects them and their operations. Instead of black-letter law, our clients want to know what business practices will get them sued, what business practices they can follow so that they will prevail when that inevitable lawsuit is filed, and what business practices they can follow to avoid lawsuits in the first place.

In addition to defending clients when they are sued, trial attorneys can also use their expertise in their clients’ fields to advise and guide their clients on how to avoid lawsuits (and judgments). In fact, according to the Texas Disciplinary Rules of Professional Conduct, such client counseling is part of the lawyer’s stated role in representing clients.¹ Therefore, it is important not to overlook this key aspect of the attorney-client relationship by reciting black-letter law when real-world law is what clients need to hear.

For example, while Texas black-letter law is well settled that a general contractor is not routinely liable for injuries to its subcontractors’ employees, Texas general contractors still often find themselves defendants in lawsuits brought by employees of subcontractors who are injured in the course and scope of their duties. The why is simple: most subcontractors carry worker’s compensation insurance. One benefit of buying worker’s compensation insurance for employees is that, if injured, the employees cannot sue their employers, even if the injury is caused by the employer’s negligence.

Take a typical injured subcontractor’s employee – a roofer, a framer, etc. He cannot sue his employer, ABC Roofing or XYZ Framing, as that entity provides worker’s compensation insurance. Who else is around, has insurance dollars and would make a ready target? The general contractor, of course. So despite "black-letter law" to the contrary, injured workers employed by subcontractors will often bring negligence claims against general contractors.

Rather than trying to overturn the black-letter law, most injured subcontractor employee cases pick the two narrow exceptions to the law and try to argue their facts into the exceptions. The narrow exceptions have been repeatedly stated by appellate courts, including the Texas Supreme Court, as follows:

1. When a general contractor retains control of the "means, methods and details" of a subcontractor’s employees’ work in the construction contract, then the general contractor can be liable to the subcontractor’s employees for any injuries arising out of that control.
2. When a general contractor does not have a contractual right of control, but nonetheless exercises actual control of the "means, methods and details" of subcontractor’s employees’ work, the general contractor can also be liable to the subcontractor’s employees for any injuries arising out of that control.²

Because these rules have been consistently articulated by the courts for a number of years, the vast majority of general contractors carefully draft their contracts to avoid the situation posed in the first exception (and those very few who do not, should). Hence, the typical case against a general contractor is brought under the second exception. A creative plaintiff will allege that the general contractor exercised actual control over the means, methods and details of the subcontractor’s work, such that it has become liable for any injuries to that subcontractor’s employees.

Where does this dilemma leave a general contractor who wants to avoid unnecessary liability, but remain in control of its worksite? What types of supervision can a general contractor provide before stumbling into the exceptions? Moreover, and of utmost importance to general contractors, what types of supervision must a general contractor avoid?

First of all, a general contractor can determine the order in which various trades will conduct work without creating liability. A general contractor can order the various trades to start and/or stop work. A general contractor can post a generic safety plan. A general contractor can conduct generic safety meetings for its own employees and can also require its trades to conduct their own safety meetings with their employees. A general contractor can inspect the project to determine progress, compliance, and other project issues. A general contractor can also require that its subcontractors adhere to OSHA (Occupational Safety and Health Administration) Regulations, the MUTCD (Manual on Uniform Traffic Control Devices) or other applicable state and/or federal safety regulations and guidelines.

Furthermore, the absolute "cannots" are also relatively simple. The general contractor cannot approach a subcontractor’s employee and instruct the employee as to the specific way that he should perform his job. A general contractor cannot tell the low-slope roofers that they must have two men mop tar from left to right, while another worker screws in insulation tiles, all the while using a safety monitoring system as fall protection for the crew. Additionally, the general contractor’s project superintendent cannot dictate specific control details to the subcontractor’s employees, e.g. "Everyone must answer to me on all issues. I don’t want a pipe laid, a brick mortared, a sheet of drywall hung without my specific knowledge and approval. You will use my tools, follow my safety plans, and answer to me in all things." The micro-managing dictator approach to project management will always create liability for the general contractor in the event of an injured subcontractor employee.

The appellate courts have also answered some questions as to what facts will create liability, in the gray areas. The Texas Supreme Court has made clear that in a pipeline–laying project, if a general contractor mandates a specific type of safety device is to be installed and learns through inspections that the safety device has not been put in place, the general contractor can become liable if it fails to intervene and a subcontractor’s employee is subsequently injured due to the lack of that device.⁴ The Texas Supreme Court has also clarified that when a general contractor on a multi-story building project mandates that its own employees use specific fall protection and knows through regular inspections that the subcontractor’s employees are using inferior (and non-OSHA compliant) fall protection but fails to intervene, the general contractor can become liable when a subcontractor’s employee falls from the inferior rigging.³

Does this mean that the prudent general contractor should take the ostrich approach to project management, simply to avoid potential future liability in the event that someone gets hurt? Ethical considerations aside, the answer is still "no." A general contractor cannot effectively supervise a project if it ignores what is going on at a project simply to protect itself from future liability. Moreover, the Texas Supreme Court has specifically commented on the question, clarifying that, "[a] general contractor is not ‘required to stand idly by while another is injured or killed in order to avoid liability.’ Nor do we believe that the liability rules contemplate putting those who employ independent contractors in that position."⁵

The best practice, then, in order to effectively manage a project and keep fully apprised of the happenings on the project, would require three things:

• If at all possible, avoid mandating specific types of safety plans or construction activities, such that the general contractor will not be seen to have usurped control over a given subcontractor.
• Keep apprised of general OSHA (or other state/federal) safety regulations for the types of trades operating on site, such that when a blatant violation is committed, the general contractor recognizes it as such.
• When the general contractor recognizes a problem on site, rather than correcting and instructing the specific employee, the general contractor should immediately address the issue with the worker’s foreman, and demand that the foreman either correct his employees or stop work until such correction can be made.

Following these guidelines may not stop subcontractor lawsuits, but such practices will likely led to a more defensible and manageable case. Of course, the client must hear this advice from its attorney or all our knowledge and training will do little to help and guide those we are hired to advise.

Most businesses do not intuitively know how to be good clients, or good defendants (or even good plaintiffs, as the case may be) in litigation. Whether they be general contractor clients, or health care clients, banking clients or manufacturing clients, they simply do not go into business knowing as much about the legal ramifications of their activities as their attorneys know from the legal world.

So how do we advise? And how do we do so effectively, so as to protect our clients’ legal interests without interfering with the business they wish to conduct? There are several practical, basic activities that lawyers can undertake to achieve these goals:

• Know your client. It may sound simplistic, but how can an advisor advise if the advisor fails to understand the daily ins and outs of the client’s field? In practical terms, this will typically require a visit to the client, at the client’s location, to see what the client does and how the client does it. This may also require becoming a bit of an expert in the client’s field, so that we understand their terminology, their business, their business partners and their competition. How else can we advise the general contractor not to cross into the exercising actual control over the means, methods and details of a subcontractor’s work, if we do not understand what they do or how they do it?
• Know the law. In order to advise our clients, we must stay up to date on the law as it relates to their business activities. We need to keep up to speed on recent court rulings, legislative updates and practice trends. We need to continue to be students of the law and we need to know more than just a black-letter understanding of that law. We must become and remained versed in nuance. If we do not recognize the different legal ramifications of general control of the construction process versus specific control of a subcontractor’s activities, we simply do not know the law well enough to offer informed assistance.
• Stay in touch. Between lawsuits (or business transactions), we need to remain in contact with our clients, fostering an ongoing relationship. If the only time we talk to one another is when a lawsuit arises, all of our focus will be on the specific lawsuit at issue. We need to also build the type of relationship with our clients where we are available and up to date in order to render advice. And we need our clients to look to us as not just courtroom advocates, but as legal advisors.
• Educate your client. We must make a practice of teaching our clients the law. This may mean sending a client updates when legislation changes or sending case updates when significant case law comes forward in their fields. We should not sit back and wait for our client to ask us for legal education. Instead, we must provide it as a part of our regular legal service to them. We cannot wait for an injured subcontractor to stay in touch, and we cannot lose that contact once the lawsuit has ended.
• Illustrate the law. More than just teaching our clients what the law says, we need to teach them how the law specifically applies to them. This may mean meeting with individuals outside the client’s legal department (with their project superintendents, engineers, financial analysts, and sales staff). We need to adapt the black letter law to their specific jobs, so that they see how their actions have legal implications, and what other ways of doing business they may have available to them.
• Speak up. By knowing our clients and knowing the law, we are in a position to recognize legal problems or issues before a client even realizes they exist. When this happens, we must speak up and be proactive. In addition to offering criticism of a problem, we must be ready, when practical, to offer them sound legal alternatives.

There is no guarantee that following these points will prevent any given lawsuit. However, being a part of the client’s overall team will help the client avoid, or at least minimize, legal potholes down the line.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.