The Working Group to Draft Human Rights Protections in Supply Contracts has recently issued a draft report (the “2018 Report”) with model contract clauses shaped by Article 2 of the UCC and multiple Articles of the CISG (applicable to the international sale of goods). The Report is one of several initiatives within the Business Law Section’s implementation of the ABA Model Business and Supplier Policies on Labor Trafficking and Child Labor.
The hope is that adopting the 2018 Report’s suggested text in supply contracts, purchase orders, and delivery documents will be more effective at preventing the kind of abuses that have recurred with horrifying frequency over the last few years, resulting in hundreds of deaths and countless injuries. An April CLE program and materials prepared in connection with the 2018 Report included research and a summary of recent and pending litigation in the context of violations of employee human rights, including forced labor and child labor, both domestically and abroad.
Suits challenging corporations for failure to address alleged forced labor or child labor fall into four general categories: (i) negligence cases alleging a duty based on the domestic purchaser’s knowledge of foreseeable harm; (ii) deceptive advertising claims based on the failure to disclose human trafficking in the supply chain and/or misleading website statements in breach of state consumer protection laws; (iii) claims based on the Alien Tort Statute; and (iv) claims made under the Trafficking Victims Protection Act. Acknowledging that the proposed text will not work for buyers subject to FAR regulations, with current case law in mind, the Working Group’s proposed insert to the supply contract ends with specific disclaimers refuting purchaser control over supplier operations or responsibility for worker safety. The disclaimers are intended to make it clear that monitoring, inspecting, and requiring a supplier to comply are purchaser contractual rights and expectations; at no time does the supplier’s (and its sub-supplier’s) duty to assure compliance with human rights protections shift to the purchaser.
Following the CLE program, the Working Group also held a working session to finalize the report and clauses, and to form a plan of national implementation. More participants are welcome as the Working Group moves into the publication and implementation phase, placing particular emphasis on bringing the model clauses to the attention of companies who can use them. Anyone interested should contact the chair, David Snyder (email@example.com), or vice chair (firstname.lastname@example.org).
Susan Maslow (LAW ’82) concentrates her practice primarily in general corporate transactional work and finance documentation in the areas of Business Transactions, Business Law, Private Finance, Real Estate, Contracts, and Non-Profit Law.