Developers and building managers want to avoid as much risk as possible when they construct, modernize, and maintain facilities. Since they can’t be everywhere at once, they might want to think about an unconventional and unique risk-management tool: employee training.
By making sure that employees know building codes, building-safety regulations, laws, and other standards, developers and facilities managers can gain an extra set of eyes and ears on the job. A well-trained employee can spot potential problems before they occur, which is the first and best step toward minimizing (if not eliminating) risk.
Developers and facilities management leaders spend a fair amount of time learning and keeping updated on the latest laws and regulations affecting their industry. Developers know the risks posed by undetected construction defects or substandard work. Facilities managers realize that the failure to detect small problems or correct safety hazards can lead to liability for the management company.
But how often does that training get passed along to the people who are on-site every day - the professionals who have more contact with the actual building than anyone else?
The biggest tool for minimizing risk is to make sure your employees are well-trained and that they receive updated instruction on spotting potential risks. The well-trained employee can help protect a company against lawsuits by watching for construction and building safety problems, and alerting the company to them. This helps with risk management in two ways: First, problems can be fixed before they lead to legal difficulties, and second, the company that spots a problem can take measures to remediate it (a properly documented remediation plan creates a stronger legal position when a problem does go to court).
Dangers and Liability Triggers
The horror stories are in the news every day.
Consumers are increasingly demanding guarantees from the general contractor for all aspects of workmanship and materials. The media loves to sensationalize court battles over construction defects and mold allegations; remember the mold that attacked Ed McMahon’s house?
Seizing upon this trend, plaintiffs’ attorneys advertise multi-million-dollar settlements against the owners of “dangerous” buildings, schools, and apartments. Our litigation-happy society compounds the risk for developers and facilities managers, making it even more important that they take every step possible to avoid potential problems and to handle them effectively when they do occur.
There are a number of ways to protect against these risks. One of the best is to train employees to help spot potential problems before they occur. Ongoing training is expensive at the front end, but companies that utilize regular training find that it pays off in better work sites, fewer construction and safety defects, and quicker remediation of problems.
The use of employee training for risk management is generally the same in the construction and maintenance phases, although there are several areas of concern particular to each.
Risk Management in the Construction or Modernization Project
In the construction area, the developer hopes to minimize risk through the avoidance of construction defects. Various state laws, court definitions, and interpretations define construction defects, but they generally fall into four categories:
- Design deficiencies, which occur when architects, engineers, or subcontractors do not perform their work as specified, either to cut costs or because of mistakes.
- Material deficiencies, which occur when a contractor uses inferior building materials or materials with manufacturing problems.
- Construction deficiencies, caused by shoddy workmanship.
- Subsurface problems, caused by soil conditions, such as inadequate compacting before a subdivision is built, which can lead to problems like cracked foundations.
In order to spot design and material deficiencies, shoddy workmanship, or subsurface problems, construction employees need to know which types of situations lead to unmanageable risk. New employees should receive an orientation that gives them an overview and emphasizes the importance of staying alert to problems on the jobsite. In addition to orientation, employees should receive a written manual or other document that details common risk-management situations they might encounter on a daily basis.
Another very important risk-management step is to create a corporate culture of openness, where employees are encouraged to report potential problems to management - even when they are bringing attention to the work of other employees. In many construction-defect cases, someone on the job knew about the problem but didn’t say anything. You need to make sure that your employees, subcontractors, and others involved in the project know you want to be informed of any defects before the client sees them.
As construction begins, the developer should already have in place a schedule of regular and periodic inspections by well-trained, qualified people. As these inspections occur, they should be documented in writing, which will protect the developer in the event of a legal claim. The inspector should also document periodic conversations with employees on the construction site and provide further detail on any formal process used to spot potential defects.
If these periodic inspections turn up defects, or if an employee reports a defect, the developer should be sure to document the notification and remediation efforts.
Risk Management in Building Management
When it comes to building management, the dangers lie in structural defects and unsafe conditions. Just as training can be useful for construction employees, building managers can also use employee training to help spot potential risks. These risks fall into the following general categories:
- Pre-existing conditions that were present when the owner obtained the building. For new buildings, these include construction defects and safety hazards. For older buildings, these could include failure to identify and remove lead paint, for example.
- Conditions that can lead to liability. One common example is water intrusion, the leading cause of mold.
- Safety violations, including inadequate locks and other conditions.
- Repairs that were not correct or timely, made by the owner.
- Failure to perform required safety inspections.
Risk management begins and ends with employee orientation, including a thorough overview of the types of situations that might put the company at risk and how to report these potential problems. The orientation training should be supplemented by ongoing training, which can include instruction by supervisors, peer-to-peer trainers, or outside experts.
All building-management employees should be familiar with the building’s system manual. Even if they are specialized employees, each should have a general understanding of all systems and potential problems in order to spot risks before they become lawsuits. As a condition of employment, employees should read the building manual and verify, in writing, that they have done so.
On an ongoing basis, all building-management employees should have a basic understanding of changing regulatory requirements.
Staying on Top of Employee Training
Whether it’s during construction or ongoing maintenance, the developer or facilities manager should have a plan for training new employees and updating existing workers’ training. The first step involves developing written materials for all employees. Next, put in place an orientation program for all current employees and make sure new employees are trained as they join the project or building-management team. When supervisors go through training to update their understanding of changing regulations, implement a process that allows them to pass on what they have learned to any employee who could help spot problems in that area. Finally, implement a corporate culture that encourages and rewards all workers to be alert to potential risks and to report them.
Top Five Ideas for Avoiding Liability through Employee Training
Dave Seitter is an attorney with the Kansas City, MO, law firm Spencer Fane Britt & Browne LLP, where he specializes in the areas of construction, corporate, and bankruptcy law. Seitter is the creator of
(www.midwestconstructionlaw.com), a legal and business resource website for companies involved in construction.