CRISIS MANAGEMENT AND PREVENTION What in-house counsel need to know - - PowerPoint PPT Presentation

www.dlapiper.com April 2018

CRISIS MANAGEMENT AND PREVENTION

What in-house counsel need to know about brand protection during litigation and other compromising times

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*This presentation is offered for informational purposes only, and the content should not be construed as legal advice on any matter.

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1

Introduction

2

2

Trial by media

7

3

Relationship of PR and communications to missions and goals

10

4

Legal consideration in crisis planning

16

5

Real world examples of crisis management concepts

30

6

Your crisis management plan

32

7

Questions

36

Agenda

1

Introduction

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 Crisis management: The preparation and application of strategies and tactics that can prevent or modify the impact of major events

• n the company or organization

 Two important questions at the outset: – What is the crisis? – When did the crisis start?

Introduction

Angela Agrusa

Partner, Litigation DLA Piper T: +1 310 500 3591 angela.agrusa@dlapiper.com

Ann Lawrence

Global Co-Chair, Retail Sector, Partner DLA Piper

T: +1 213 330 7755 ann.lawrence @dlapiper.com

Presenters

Elizabeth Lampert

President Elizabeth Lampert PR T: +1 925 284 5647 lampert@elizabethlampertpr.com

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 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?

Is an event a crisis?

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Common mistakes:

 Erroneous ethics  Incentive crisis  Mixed values  Stonewalling stakeholders  The Peter Syndrome  Walking the high wire without a net  Addiction to repetition

Control (or lack thereof) defines the impact that the crisis will have

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The Porter-Novelli Survey

 The larger the crisis, the longer the public remembers  A damaged reputation affects customer decisions  Eyewitnesses and third parties are believed  How the company behaved influenced public reaction

2

Trial by media

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 The advent of instant communications, viral media and immediate public reactions has heightened the pressure and urgency of crisis management

Trends affecting crisis handling

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Trends affecting crisis management

Give something back Trial by media

3

Relationship of PR and communications to missions and goals

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Prevent a crisis when possible Modify the negative effect on the company Through its behavior, provide a platform for the company’s future

Three sequential objectives of crisis management

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 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.

Objectives of corporate relations strategies

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 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

Most companies are not prepared for a crisis

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 Preventable risks generally fall into the category of manufacturing rather than service industries  Notorious risks:

Is the risk preventable?

Product-related cases Financial, takeover, regulatory and ethical issues Rumors and allegations

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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?

Questions for formulating a crisis plan

4

Legal consideration in crisis planning

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 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

• r 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

Responding to crisis while minimizing long-term impact

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 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

The role of lawyers in protecting our clients’ brands

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 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

When a crisis occurs, who do you consult?

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 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

Tools for protecting confidential communications

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 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

Control the time and content of your message

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 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).

The legal dangers of responding to allegations: Option 1

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 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).

The legal dangers of responding to allegations: Option 2

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 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)

The legal dangers of responding to allegations: Option 3

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 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.”

Solutions to minimize risk

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 Litigation privilege – Absolute immunity for statements made during the course of and in connection with legal proceedings – Parameters vary from state to state

Safe spaces

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 Pre-litigation statements – A pre-litigation statement is only privileged when it relates to litigation that is “contemplated in good faith and under serious consideration.” Action Apartment Assn., Inc. v. City of Santa Monica, 41 Cal. 4th 1232, 1251 (2007).  Statements to the press – “Litigants and attorneys who wish to litigate their cases in the press do so at their own risk—that is to say, protected by the First Amendment . . . and all principles which protect speech and expression generally, but without the mantle of absolute immunity.” Rothman v. Jackson, 49 Cal. App. 4th 1134, 1140 (1996).

Limitations of the litigation privilege

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 Two requirements to protect communications with your client from compelled disclosure pursuant to Upjohn

• Co. v. United States, 449 U.S., 383 (1981):

– The investigation at hand must be at the direction of counsel, who was retained to investigate and provide legal services and – You must provide an “Upjohn Warning:” “We represent your employer, not you”

Controlling the privilege

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 Types of privilege to keep in mind: – Attorney-client – If waived, the privilege for all other privileged communication

• n that same subject is also waived

– Opinion work product – Generally, if waived, waiver is limited to actual document disclosed – Fact work product – If waived, the work-product privilege as to all other fact work product on the same subject is also waived

Protection via privilege

5

Real world examples of crisis management concepts

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 Take accountability without promoting liability or suggesting devastation

Potential approach

6

Your crisis management plan

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 Start with an approach  Build a strong reputation  Create a crisis team

Planning ahead

– External candidates:

– Legal specialists – Civil and criminal – Brand messaging/communications – Compliance/business regulations – Insurance coverage – Public relations specialists

– Internal candidates:

– Corporate communications – Legal – Public affairs – Human resources – Research – Operations – Safety – Security – Logistics

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 Prepare materials in advance: – A press response stating that you have incomplete knowledge of the crisis details, describing your conceptual approach and giving your promise to inform – Your best answer and information in the event of a crisis – Some generic but positive information about the company that has some bearing

• n the crisis

Planning ahead (cont’d)

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 Develop direct, unedited information systems to reach your important audiences  Utilize all forms of media  Hold the media to the truth  Test messages for understanding and impact  Supplement everything you do with third-party support  Keep a log of all press releases and key accurate stories as the crisis develops  Provide a location for the press to meet, communicate and get briefings from your

• rganization: become an accessible source of

information

Media intervention

7

Questions

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