Wednesday, June 2, 2010

ERM-BC-COOP: Consider the law


I subscribe to a free service called Advisen Front Page News It bills itself as "Productivity and Insight for Insurance Professionals."

Insurance professionals deal with risks. Enterprise Risk Management practitioners deal with risks, ergo my interest in the site.

Two articles in a recent email tickler caught my eye.

One, titled "Woman sues Google after Park City accident" reminds that when someone sues, they - or their legal representatives - sue everyone that might be remotely involved, especially if any of the potential defendants is suspected of having "deep pockets" - the capacity to pay big awards.

The second, titled 'Venting Online, Consumers Can Land in Court" is about "strategic lawsuits against public participation", a/k/a SLAPP.

The danger to organizations in the first case is obvious. If the organization can be linked, even indirectly, then it is liable to be named in a suit. The smaller the directly related organization and the larger your organization, the higher probability your organization will find itself defending its honor - and bank account.

The second issue is a little different, but like the first it can be expensive to defend.

In most states, "truth is an absolute defense" against libel suits brought against newspapers. The same holds true for claims of slander in most states. Neither is nationwide and once outside the Several States I have no idea what laws apply.

The issue here, however, is not just a slander suit against - in this case - a blogger who claims he was wronged by a towing company. If the blogger has a known association with an organization - as an employee or board member - or advertises a relationship with an organization that organization is subject to inclusion in a libel action.

When I was an honest journalist - back when Hector was a pup - I learned that while truth was the absolute defense against a libel suit, I also learned that (a) it was expensive for my paper (albeit great for the lawyers) and (b) time consuming both before and during the trial. Unless the person suing my newspaper was a real scoundrel, my reputation and the paper's was at stake.

Enterprise Risk Management, a/k/a business continuity, is all about managing risks.

There really is no legal way (that I know about) to prevent an employee from railing against Joe's Fly-By-Nite Towing and Car Crushing Company, even if Joe and friends fraudulently towed and crushed the employee's car.

Employers may have well-advertised policies and procedures in place clearly stating that employees will not reference their employer in personal communications, including but not limited to emails and blogs and that all officials of the organization, that is, people generally known to be associated with the organization, will refrain from making any non-complimentary comments about any one or any thing until the comment has been vetted by Legal.

The organization is not trying to stifle free speech as much as it is trying to avoid legal actions or to at least be prepared for legal actions as "injured parties" look for deep pockets.

True story.

I once was "Deputy Director of Engineering" for a PBX manufacturer. In that role I was "the" technical writer and, in the director's frequent absence, in change of customer support.

The company sold, and maintained, its product through a vendor network.

Seems one of our vendors left a client without service. The client, a small hotel in California, had a problem with the PBX and, being unable to contact the vendor (that went out of business without telling anyone - customers or us) called us. I answered the phone. I managed to get the customer support in relatively short order and set him up with another vendor in his area.

I THOUGHT that was the end of it. A pat on the back for the Deputy Director who, like Mighty Mouse, saved the day.

Then, a few weeks later I was informed that I, along with the Director and the Director's VP, was named as a co-defendant with the company by a suit brought by the person I had helped !

Fortunately, the company's legal folks headed off the suit. How much it cost the company is unknown, but the exercise was disruptive and put a dent into the budget.

The bottom line for all this is that organizations must make an effort to distance themselves from individuals without being seen as limiting free speech. A well defined policy that can be shown to be known by the author of an offending comment may be sufficient to get the organization off the hook.

Then again, it may not.

Check with your legal counsel; I am not a lawyer nor do I play one on tv.

As for the first threat, the Google map, again with the caveat that I am not a lawyer, it seems like a disclaimer on the product might be sufficient. Still, another item in the Advisen Front Page News email suggests that even that may not be sufficient: see "Concerns over floor mat issue activate safety probe of some Ford models" (

As Star Trek's Mr. Spock would opine: "Interesting."

John Glenn, MBCI
Enterprise Risk Management Practitioner
Hollywood - Fort Lauderdale Florida


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