I recently had a conversation with a friend who is corporate counsel for a foreign corporation which has recently added some domestic holdings. The conversation centered around his attempts to educate his client about American law. The problem was that the company was used to having affirmative duties under its home country’s laws – something typical in may European legal systems but antithetical to the Common Law. As ironic as it may seem, my friend’s efforts were essentially ones to re-educate the client out of assuming duties for the welfare its workers. This purely legalistic introduction to the American legal system was essentially promoting irresponsibility (or at least a conscious decrease of active responsibility) and represented the classic “race to the bottom.”
Our legal system is underpinned by the concept of the fictitious “reasonable person” who does certain things and refrains from others based on common prudence. It is a system that has served us well but which is not without its problems, as here.
This general scenario bothered me. I wondered if it is “reasonable” to stop certain practices you are used to doing in your home country because your American lawyer informs you that “legally” you don’t have to do them. If your company truly has a corporate value of caring about its workers, it does not seem “reasonable” to change your pratices. However, if the only reason you “cared” to put the practices into place was not to run afoul of some European law, it is arguably “reasonable” to ditch those measures and race to the bottom.
Then I turned my attention to the lawyer’s conduct. Is it ethical to encourage your client to abandon better practices because they exceed the minimum legal standard? I don’t think that such advice technically violates any ethical rules. But while it may conform to the letter of the law, such advice certainly violate its spirit.
In a world of multinational corporations who have no allegiance to any country or legal system perhaps we need a new rule concerning the standard of care. Maybe such companies should be held to the highest standard of care found in any of their places of operation. It would protect workers, allow a company more certainty in determining its responsibilities, and halt the race to the bottom.
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