The United States is a litigious society. Business owners, including engineers that own and manage engineering firms, need to understand why the rule of law is important to business. The rule of law provides a framework regarding how to act and operate. It also holds people, businesses and government accountable for their actions.
Operating a business would be totally chaotic without predictable rules and patterns to follow. One party could easily take advantage of another party because it would be impossible to know how each party could or would act in any given situation. The rule of law provides important stability, consistency and certainty in a potentially volatile business environment. Guidelines for universal acceptable behaviors enable some assurance that organizations act predictably and responsibly.
Laws affect every profession in different and sometimes seemingly strange ways. Engineers deal with highly technical concepts, designs and products and the laws affecting an engineer’s work can be just as complex as the work itself. Engineers may be reluctant and uncomfortable to commit time to a study applicable laws. However, it is critical to the sustainability of their engineering business that the engineers must be familiar with the relevant laws in order to avoid problems in the business.
The most successful and savvy engineers that lead and manage engineering companies need to be interdisciplinary. They must obtain a foundation in many business topics, including law as part of their personal professional development regarding the business side of the companies they own and operate.
Engineers and engineering managers need to have a working knowledge of the laws that affect their work and that will enable them to: follow regulations; comply with local, state & federal regulations; understand the boundaries of their personal and professional liability; negotiate contracts; protect their intellectual property; develop a relationship with a law firm that understands the engineering business and can provide solid legal counsel when needed.
Some of the most applicable types of business laws that engineers and engineering managers should generally understand include:
Engineering firms work with clients, and the projects they are engaged to provide their professional services will involve some form of a contract. Contracts form the basis of an engineer’s work, and contracts are legally binding documents. Understanding the basics of contract law is essential to protect engineers’ rights and obligations, and it helps avoid potential lawsuits due to accidental breach of contract.
Tort laws in engineering primarily deal with civil injuries resulting from negligence. Courts measure the damages resulting from these injuries in monetary amounts. Liability issues can be very complex and it is incumbent upon engineers to learn the basics of tort law to protect themselves and their companies.
Intellectual property or IP is a term that has become very common in today’s technology-driven world. IP protection is absolutely critical for protecting a company’s proprietary designs, processes and inventions that, if leaked to competitors or made public, could destroy a company’s marketing advantage and reputation and/or lead to costly litigation.
Engineers often are on the leading edge of innovation. They are professional innovators and work in the realm of industrial property and often are the first people involved in creating a proprietary design or invention. Their work may deal with patent applications, research and prosecution, computer applications for software and hardware, as well as machines, processes, mixtures, manufacturing, compositions, etc.
Engineers as owners and managers need to know laws that are not directly related to the technical world of engineering practice. They also need to understand the various laws regulating hiring and the workplace. National and state laws cover everything from hiring practices to workers’ compensation. And there may be some local laws that will be applicable to their business.
Health and safety laws can be especially important in the engineering field. In addition, there are laws that are created to: prevent discrimination in the workplace, govern medical leave and protecting workers’ rights.
Consequences of Failure to Comply
Failing to comply with local, state and federal guidelines, laws, regulations and other legal requirements can have serious consequences for a business. Therefore, it is paramount for the engineer to know and understand the rules. Ignorance of the law will make the engineering owner and manager vulnerable to fines, lawsuits, audits and even having the business dissolved entirely.
“Ignorance of the law is no good excuse, where every man is bound to take notice of the laws to which he is subject.” Thomas Hobbes, 17th century English philosopher and considered as one of the founders of modern political philosophy.
Glenn Ebersole is a professional engineer and is the Business Development Manager for CVM and CVMNEXT Construction in King of Prussia. He can be reached at firstname.lastname@example.org or 610-964-2800, ext. 155.