Legal: The risk of going green

There is a risk in going green. I don't suggest it is a bad idea to make your products green or energy efficient. The law, industry standards, associations' recommendations, and owner expectations strongly suggest you do so and often times require you to do so. I do suggest it is a bad idea to focus on the wrong kind of green. Let me explain by example.

I often receive calls from frustrated window, door and glass manufacturers trying to figure out how to navigate through the treacherous waters of liability risks. A few days ago, I received a call from a national manufacturer, "Green Windows." As is often the case, the company was under attack from Duey, Cheatem, and Howe, a law firm with a reputation of putting manufacturers out of business. The CEO of the window company, exclaimed, "I need your help!" After listening to several minutes of stressful venting, I figured out that the lawyers claimed windows at a multimillion dollar project were not performing as represented. Letters and phone calls had already been exchanged.

Upon reviewing a letter responding to the lawyers' claims, written by a sales representative, I puckered when I read, "We guarantee that our product exceeds the energy ratings specified for the project."

"Ch'Ching," I thought. Hint: My client was not going to be happy about the exposure it unknowingly created. I was worried about green. Not the name of the company. Not the color of the logo. I was worried about my client's cash. The owner's lawyers claimed that the windows were not "green."

"You have a problem," I said. My thoughts wandered for a moment recalling all of the window manufacturer Web sites, sales literature and warranties I have reviewed, analyzed, and modified over the years. I asked "do your products perform as you say?"

"They should!"

Not the answer I was hoping for. Not the answer a jury will appreciate during the lawsuit hiding like a snake in the grass ready to strike its prey.

"They did in the lab. We wouldn't have any idea after the windows have been installed. We don't have any control as to how our product is installed. We don't know whether the wall system was designed properly. We don't know whether the argon gas escapes. When we had the model of window used in this project tested by an independent lab several years ago, it met the specs. Our sales reps do the best they can to sell as much product as possible. Puffery is part of the business."

There is a constant tension between sales staff competing against other manufacturers and management trying to protect the assets, and long-term profitability and growth of the company. Focusing too much on the green dollars rather than making sure your products meet the green promises made to project owners is a time bomb waiting to explode.

We all know the glass industry is competitive. Margins are low. Volume is critical. Big projects including lots of volume are the big fish in the pond. Much of the competition begins with the sales force. As owners and others become more and more informed and educated about fenestration products, they become more and more savvy with their selections. The sales warfare has increased the importance of meeting a variety of relatively new green standards. Supplying green projects is becoming the norm rather than the exception. Owners are relying on the green promises made.

After figuring out a strategy to respond to the claims against my client-a subject to detail in another article-I calmed the owner by explaining how to help avoid the problem in the future. "Build what you say you build. Know that any description that is part of the sales pitch, including NFRC [National Fenestration Rating Council] labels, U-factor, Solar Heat Gain Co-efficiency, Visible Light Transmittance, etc., can create a warranty or a promise, whether intended or not. Have everything you say, both written and spoken analyzed and modified by those in the know to avoid making promises you can't keep. You must make sure your brochures, Web sites, billboards, ads, the name of your products, and the statements made by your sales staff all match up with what your windows actually deliver to the project owner."

I further explained, "Ignoring one piece of the puzzle risks everything. Duey, Cheatem and Howe will use every legal theory available to help make the best case they can for their client. The theories at their disposal include breach of warranty, negligence, product liability, fraud, and consumer protection claims. The money claimed will not just be money to fix the problem. It will not be money to simply pay the owner for extra energy bill costs. It will include punitive damages, not likely covered by insurance, not likely covered by bankruptcy. In other words, do not ignore a single piece of the puzzle. Make sure you know how your products are described to the public, including energy ratings and green efficiency claims.

"Now you can focus on the right kind of green, making sure your sales staff, your brochures, your labels, and your products all match up to meet the green needs of your customers. The green dollars will follow. Taking the right kind of precautions now will help you keep the green dollars rather than turning them over to the owner's lawyers."

And with that, the owner was off to set a meeting with his sales reps.