CRISIS MANAGEMENT AND PREVENTION What in-house counsel need to know about brand protection during litigation and other compromising times If you cannot hear us speaking, please make sure you have called into the teleconference. The audio portion is available via conference call. It is not broadcast through your computer. North America participants: 1 888 273 1350 Outside North America: 1 212 231 2936 *This presentation is offered for informational purposes only, and the content should not be construed as legal advice on any matter. www.dlapiper.com April 2018 0
Agenda 1 Introduction 2 7 2 Trial by media 3 Relationship of PR and communications to missions and 10 goals 16 4 Legal consideration in crisis planning 5 Real world examples of crisis management concepts 30 32 6 Your crisis management plan Questions 36 7 www.dlapiper.com April 2018 1
1 Introduction
Presenters Introduction Crisis management: The preparation and Angela Agrusa Partner, Litigation application of strategies and tactics that can DLA Piper T: +1 310 500 3591 prevent or modify the impact of major events angela.agrusa@dlapiper.com on the company or organization Ann Lawrence Global Co-Chair, Retail Sector, Partner DLA Piper T: +1 213 330 7755 ann.lawrence @dlapiper.com Elizabeth Lampert President Elizabeth Lampert PR T: +1 925 284 5647 lampert@elizabethlampertpr.com Two important questions at the outset: – What is the crisis? – When did the crisis start? www.dlapiper.com April 2018 3
Is an event a crisis? To what degree will this event affect your ability to meet your mission ? What is the intensity and urgency of the crisis, and how big can it get? Which of your values are affected, and what is the long-term potential for damage? What relationships are threatened? www.dlapiper.com April 2018 4
Control (or lack thereof) defines the impact that the crisis will have Common mistakes: Erroneous ethics Incentive crisis Mixed values Stonewalling stakeholders The Peter Syndrome Walking the high wire without a net Addiction to repetition www.dlapiper.com April 2018 5
The Porter-Novelli Survey The larger the crisis, the longer How the company behaved the public remembers influenced public reaction Eyewitnesses and third parties A damaged reputation affects are believed customer decisions www.dlapiper.com April 2018 6
2 Trial by media
Trends affecting crisis handling The advent of instant communications, viral media and immediate public reactions has heightened the pressure and urgency of crisis management www.dlapiper.com April 2018 8
Trends affecting crisis management Trial by media Give something back www.dlapiper.com April 2018 9
3 Relationship of PR and communications to missions and goals
Three sequential objectives of crisis management Prevent a crisis when possible Modify the negative effect on the company Through its behavior, provide a platform for the company’s future www.dlapiper.com April 2018 11
Objectives of corporate relations strategies To produce new revenues or To protect current revenues Crisis planning may be at the top of the protect list, along with various competitive issues, operational concerns and franchise questions. www.dlapiper.com April 2018 12
Most companies are not prepared for a crisis Most crises can be anticipated and preparations can be made Planning is key – know what can happen to you or your industry and what you can do about it Objective: Prevent crisis, even though what ultimately happens may be out of your hands www.dlapiper.com April 2018 13
Is the risk preventable? Preventable risks generally fall into the category of manufacturing rather than service industries Notorious risks: Product-related cases Financial, takeover, Rumors and allegations regulatory and ethical issues www.dlapiper.com April 2018 14
Questions for formulating a crisis plan What are the potential threats to your company? Can you plan for every eventuality? What is your plan trying to protect? Do you need a plan, or just good preparation? www.dlapiper.com April 2018 15
4 Legal consideration in crisis planning
Responding to crisis while minimizing long-term impact Rapid response is critical during the first hours and days of a crisis with strategic guidance to mitigate long-term legal, business, governmental, regulatory, constituent and public relations impacts – Establish triage to contain or minimize harm – Gather facts in anticipation of media or constituent inquiries, government investigations and private litigation – Secure insurance coverage Lawyers can provide guidance to develop a strategy for containing, addressing and recovering from the crisis by examining the situation from a number of angles www.dlapiper.com April 2018 17
The role of lawyers in protecting our clients’ brands Lawyers are extenuations of the brand Legal filings and other statements should not take a tone or position that undermines the client’s goodwill and integrity www.dlapiper.com April 2018 18
When a crisis occurs, who do you consult? Report complaints or allegations to the Board of Directors – Nature of claims – Severity of claims – Number of claims – What the company was/is doing about it Be mindful that internal and external communications can be discoverable in a lawsuit www.dlapiper.com April 2018 19
Tools for protecting confidential communications Coordinate communications through counsel Preset internal procedures for creation, retention and content of communications for immediate release Retain third-party experts and consultants through counsel for assistance in obtaining or providing legal advice Limit written communications regarding sensitive issues – telephone and in-person communications are preferred Handle gathering and preservation of evidence for investigations and litigation separately from crisis management activity www.dlapiper.com April 2018 20
Control the time and content of your message With the pressure of a swift response in the social media era, it is important to be mindful of the risks of liability – Tweets and other internet comments can subject company to liability – This includes republication of non-company tweets or posts Consider risks of delayed disclosure Confer with counsel regarding: – Prioritizing and sequencing communications to address interdependent legal, government and policy issues – Content of response to allegations and associated legal dangers www.dlapiper.com April 2018 21
The legal dangers of responding to allegations: Option 1 Option 1: vigorously dispute the claims – Risk: Defaming the accuser – Example of risky statement: “The new, never -before-heard claims from women who have come forward in the past two weeks with unsubstantiated, fantastical stories about things they say occurred 30, 40 or even 50 years ago have escalated far past the point of absurdity. . . Over and over again, we have refuted these new unsubstantiated stories with documentary evidence, only to have a new uncorroborated story crop up out of the woodwork.” – D. Mass ruling: DEFAMATORY Opinion that implies the fact that plaintiff is a liar. Green v. Cosby , 138 F. Supp. 3d 114, 136 (D. Mass. 2015). – 3rd Circuit ruling: NOT DEFAMATORY Opinion that implies the fact that plaintiff is a liar but “adequately discloses” the factual basis for the opinion, allowing the reader to draw his/her own conclusions. Hill v. Cosby , 665 F. App’x 169 (3d Cir. 2016). www.dlapiper.com April 2018 22
The legal dangers of responding to allegations: Option 2 Option 2: Effectively admit the claims or take swift actions against the responsible individual – Risk: Defaming the accused – Example statements: “We no longer do business with the accused;” or “We fired him.” – An opinion statement may give rise to defamation liability if a reasonable reader could conclude that the speaker’s opinion implies the existence of an undisclosed false fact. Milkovich v. Lorain Journal Co. , 497 U.S. 1, 18-19 (1990). www.dlapiper.com April 2018 23
The legal dangers of responding to allegations: Option 3 Option 3: Say nothing – Risk: Can be viewed as an admission – “Silence in response to the statement of another is an adoptive admission under Fed. R. Evid. 801(d)(2)(B) if the district court makes a determination that, under the circumstances, an innocent defendant would normally respond to the statement.” United States v. Schaff , 948 F.2d 501, 505 (9th Cir. 1991) www.dlapiper.com April 2018 24
Solutions to minimize risk Client-centric statements: – “My client takes claims of misconduct seriously and is concerned about the allegations raised by the accuser.” – “At the appropriate time and place, my client intends to vigorously defend against allegations of misconduct and any related legal action.” www.dlapiper.com April 2018 25
Safe spaces Litigation privilege – Absolute immunity for statements made during the course of and in connection with legal proceedings – Parameters vary from state to state www.dlapiper.com April 2018 26
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