Two points that CEO bloggers should keep foremost in mind are, first, never underestimate how many different groups of people may read what you write, and second, despite the blog form’s outwardly ephemeral nature, everything you post is almost certain to be permanently accessible online, whether you want it to be or not.
Below are three tips for executive bloggers compiled by Karen Lefton, a partner with Brouse McDowell LPA.
Write for your customers, but know that competitors are reading.
Be particularly careful not to disclose confidential information, trade secrets, business plans — sensitive information not known to the public. There is a tendency to blog from the comfort of your home after a long day at work. Don’t. This is not the time for a fireside chat. A blog must be written with the same thought and care as a speech to your Chamber of Commerce. More people may see it.
Write for your supporters, but know that detractors are reading.
Be careful with your facts. For every fact that can be checked, there is a former (disgruntled?) employee who will check it. When things are not black or white, he will take issue with your shade of gray. Avoid references to age, race, gender, ethnicity. What difference does it make that your new marketing manager is “young”? His creativity and enthusiasm matter. His youth does not (except, of course, to the over-40 manager that he replaced.)
Write for today, but know that your words will live forever.
A blog can be like a bad penny. It will keep on turning up. Be prepared for anything you’ve ever written or taped — a blog, annual report, speech, interview, legal brief — to be accessible on the Internet. As search engines continue to improve, it will be easier to connect your name and title with postings by you or about you. Maximize the benefit by controlling your message. Minimize the detriment by treating all your communication as though it will last forever. It will. And if you’re ever involved in litigation, it will be printed out in large type on a big screen for the world to see — again.
Karen C. Lefton is a partner with Brouse McDowell’s labor and employment practice group, mainly representing businesses. She has a special interest in media law, particularly defamation, invasion of privacy and Internet issues.
The legal hazards that executive bloggers must steer through are many. Here are four of them, compiled by Lori Clary, an attorney with McDonald Hopkins LLC.
- Blurring the line between personal and professional: As an executive, you’re the face of your company. When you post something online, it’s inevitable that what you say will be associated with and — in many cases — attributed to your company. As a result, it’s important that your blogging persona be just as deliberate and professional as you are on a day-to-day work basis. Anything less could result in a stray posting becoming Exhibit A in litigation against the company. If your blog is intended to express your personal opinions and viewpoints, make sure your readers know that and take care to ensure that your personal blog doesn’t negatively reflect on your ability to serve as an executive with your company.
- Inadvertently disclosing confidential or trade-secret information: You know your company better than anyone — and that’s a good thing. Just be sure to post only nonconfidential, nonproprietary public information on your blog. Jumping the gun even a little bit could result in your company’s competitive edge being diminished or worse (think blown deals, SEC investigations, diminished business value, employment termination and lawsuits, to name just a few unsavory complications). If you have any doubt about whether a piece of information is for public consumption, that information isn’t appropriate blogging fodder.
- Running afoul of the FTC’s product endorsement rules: As an executive blogger, you always want to present your company’s products and services in the best possible light. The Federal Trade Commission, however, has very definite requirements for product and service endorsements that appear in blogs and other social media outlets. At a minimum, you need to be sure your readers understand your relationship to the company so they can gauge for themselves how much weight to give your opinion.
- Failing to seek legal guidance: Executive blogging can be a powerful way to raise your company’s profile, build excitement for products and services, and interact with your customer base. To reap the benefits, though, you must manage the risks. Trusted legal advisers can help, so be sure to involve them before problems occur.
Lori A. Clary is an attorney with McDonald Hopkins LLC. Her focus is labor and employment counseling and litigation.
A recent amendment to the Americans with Disabilities Act has lowered the threshold of who qualifies as disabled ? former distinctions are gone between a person with a disability who was recovering well and one who was not.
“The amendment has classified both as disabled under the statute,” says Jim Boutrous, attorney with McDonald Hopkins LLC in Detroit.
“Companies need to look at accommodation requests to see that if you are making an employment decision, you are doing it for legitimate bases, independent from the protected classification,” he says.
Other concerns for companies: making back-to-work polices more flexible and using care with criminal background and credit checks in the hiring process.
“Courts and the Equal Employment Opportunity Commission are taking hard looks at policies that call for termination of an employee on disability who has not returned to work after a prescribed period of time,” Boutrous says.
“Make it more flexible ? understand that an accommodation can include more additional time of leave if that period will allow the individual to successfully return to work,” he says.
Criminal background and credit checks may have a disproportionate impact on minorities, and the EEOC has been cracking down on some business policies regarding the checks.
“It is imperative that employers who rely on those background checks distinguish candidates on the basis of qualifications of the job so they are not relying too heavily on those findings,” Boutrous says.
In another area, companies need to recognize the risk and exposure they have as a result of the information they possess.
“Every employee should sign at least a confidentiality agreement,” says Jim Giszczak, attorney with McDonald Hopkins. “Companies need policies and procedures on how to handle and protect data, who actually owns the customer relationship, and they need nonsolicited, noncompete agreements with the appropriate personnel so that if they leave, they are not in a position to take the company’s business or employees and unfairly compete against them.
“And then, companies obviously need to have appropriate checklists in place to respond immediately if an employee leaves and steals information, clients or if there is a data breach.”
Jim Boutrous is co-chair of McDonald Hopkins’ Labor and Employment Practice Group. He focuses on noncompete and trade secret matters, which includes counseling, auditing and drafting agreements. He is also a skilled employment litigator.
Jim Giszczak advises clients regarding data security measures and responding to security breaches involving sensitive personal information and protected health information. He also works with clients to assess and implement appropriate data security safeguards.
Call it technophobia or a hesitancy to spend in an area where there is no finish line, but a number of businesses are having what David Krauss, partner in The Stolar Partnership LLP, sees as a major difficulty in handling the new electronic age.
The issues of security breaches, sharing information and safeguarding personal information are on companies’ minds now more than ever.
Krauss says the expenses to have current technology and to keep it safe are adding to the stress.
“The concern keeps coming back from businesses that say, ‘No. I don't have the money in the budget for it. I’d say things are probably OK, and I’m willing to roll the dice to just kind of see what happens.’”
The result, however, may bring unwanted consequences.
“As the technology requirements get more sophisticated here, it’s possible that some of our businesses are just going to have a harder time competing in this kind of more global intellectual society.”
If your company is sitting on the fence about spending for technology, prepare yourself for a routine of constant business decisions.
“It’s kind of a double-edged sword,” Krauss says. “You may know what you want and what you need, but then if your bottom line is not quite as good as you had hoped it would be, then you are always making business decisions as to what to do: ‘Should we do this? How much is this going to cost? What kind of tech knowledge do we need? What happens when we buy something today in order to protect our system but probably 30 days from now there’s going to be something better out there?’”
David Krauss, partner in The Stolar Partnership of St. Louis, specializes in a variety of tax matters at all levels ? federal, state and local. His expertise includes both tax planning and involvement in tax controversies, including business law, nonprofit organizations, taxation, employee benefits and executive compensation. One of his favorite topics to discuss is how to attract new business to the area and stop playing checkers to move businesses from one retail shopping center into another.
The hiring and retention of employees is becoming increasingly difficult ? and while a few years ago employers were calling attorneys asking how to get rid of misbehaving employees, now they are calling to ask how to keep them.
“I’m asked, ‘How do I motivate these people?’” says Ken Cookson, director at Kegler, Brown, Hill & Hitter LPA. “They are a good group, but there are several generations in the work force right now ? and all of them have different kind of approaches.”
If you are trying to manage a millennial (1977-1994), who came into the work force in the last few years, you want to do it entirely different than you would a leading-edge baby boomer (1946-1954).
“You would give the Leading Edge Baby Boomer an acrylic memento to put on the desk and he or she would be forever happy,” Cookson says. “You give that to a millennial and he or she would laugh at you.”
The baby boomers still think of themselves as 35 years of age, being vibrant and alive. They are leaders. They run the football model of management ? “This is my team; I am the quarterback. Those people run the play I tell them to run when I tell them to run it. I never consult with them; I’m the quarterback.”
“The millennials tend to run the true partnership model,” he says. “Everybody has strengths and values that they bring to the partnership. If yours are needed, you are the leader, and if they’re not for this project, it’s like playing right field. You can sort of sleep through it.”
Ken Cookson, director at Kegler, Brown, Hill & Ritter LPA, focuses on business, banking and real estate matters to issues involving bankruptcy, state/local taxation and others. He regularly offers guidance to clients regarding some of the most important decisions facing their businesses, including formation and structuring strategies and state and local tax disputes. He also advises buyers and sellers in business and real estate transactions, as well as lenders and borrowers in lending transactions.
Governments are looking to find new sources of revenue to hold their heads above water during troubling economic times or just to generate more income, and they are becoming more active in tracking down multistate and even multilocal tax liabilities.
“The states are becoming more and more active in making certain that the taxes they can charge are indeed charging,” says Chuck Zellmer, attorney for McDonald Hopkins LLC.
“They are becoming very active assessing and collecting taxes, contacting clients on a regular basis. I think what you'll see is even going down to the municipalities because some of them have different tax rates, they’re collecting the tax or not, and businesses just don’t think that way right now. Businesses are cognizant that they've got to collect sales taxes but not necessarily on a multistate level.
“Then you have the whole issue of are my people in the state regularly enough that I not only have to pay taxes for the sales in the state, but do I have to pay income taxes, do I have a franchise tax, and all the other taxes that go with having an employee in the state,” Zellmer says.
In the past, businesses have conducted themselves by having independent contractors in other states instead of employees. However, the government is looking at that very hard. Zellmer recommends conferring with your attorney since even some of the more sophisticated clients ? because they think they have sophisticated independent contractor agreements ? aren’t necessarily going to meet the standards the government is pushing these days.
“The independent contractor question is one that is going to be on the front burner for a while until the government settles some questions ? the trend seems to be pushing toward making it the exception when there is an independent contractor relationship,” he says.
Chuck Zellmer is manager of the Business Law Department for McDonald Hopkins LLC. Based in Cleveland, he focuses his practice on business counseling, real estate and succession planning for business clients in a variety of industries on personnel, contract and other issues encountered in daily operations, transactions and strategic planning.
As technology becomes an ever-increasing part of most businesses, so does the need to become more sophisticated on issues regarding intellectual property ? patents, trademarks and copyrights.
“An electronic process now can be easily patented,” says Eric Macey, partner in Novack and Macey LLP. “Because technology is claiming more of business, you have to become more familiar with it, because you are consistently signing license agreements to do business, and you are consistently getting rights to use technology in a certain way from people who hold patents.”
You have to make sure you know that what you’re doing is consistent with the law, particularly when you are outsourcing, a practice which is growing because of the cost benefits and flexibility that it can offer.
“When you outsource, you enter into contractual relationships that involve technology, which may involve patent rights, trademark rights and other rights,” Macey says. “You have to understand that you can’t just look at a form agreement and sign it. It’s not a simple purchase order. It’s not like that anymore.”
For instance, a company may outsource its website to a Web developer, and the site will offer items for sale from your inventory and provide for e-commerce sales. You may want your employees to have access to the site which may add to potential problems.
“You sign some agreement that has all kinds of information on it, on copyrights and patents that this company has that you can’t use and you can’t disclose and things like that,” Macey says. “I think in the old days you just signed them and didn’t read the fine print, but I think it has greater implications now because there is greater liability than you had before.”
Eric Macey, partner in Novack and Macey LLP, is a co-founder of the firm. He focuses on areas such as arbitration, business torts, class-action defense, commercial litigation, employment law, financial services and others. He has a clientele consisting of a wide range of business corporations and institutions, investment ventures, partnerships, and individuals. Macey has extensive trial experience in state and federal courts throughout the country and has acted as both an arbitrator and mediator in alternative dispute resolution settings.
Should your legal firm be considering ways to improve its payment practices ? and ultimately its cash flow ? alternative fee arrangements and online payable tools are good bets.
But a word of advice from Gavin Geraci, senior vice president, specialty segment executive, PNC Business Banking: couple that examination with an evaluation of the firm’s financial policies.
“Any time you’re going to adopt a new billing arrangement or structure, use that as an opportunity to evaluate billing and collection policies,” Geraci says. “It’s likely going to result in a change in revenue, a change in how clients see their charges and it’s going to have an impact.”
Review how it will potentially impact the budget with which you started off the year. The payables cycle particularly deserves review if the firm does work on a contingency basis.
“Take advantage of the data that is available to the firm to really do some analysis and test the impact of any changes you might make on the firm’s cash flow, because if you do it to any magnitude, it will likely have some impact,” Geraci says.
Moving to a flat fee instead of a traditional hourly billing and using credit cards to pay legal fees are two growing trends being used to improve payment practices.
“Using a credit card as a payment vehicle tends to be a pretty effective means for some firms to accelerate those receivables,” Geraci says. “It’s something more businesses are amenable to, and it’s a little outside the traditional invoicing that you will normally see.”
Other methods to accelerate payments include online tools, such as online bill pay, offered by financial institutions. These tools can also offer access to escrow accounts, master and subaccounts so that legal firms can effectively manage those.
Technology aside, some good, old-fashioned business smarts can help improve the picture.
“You have to actively manage your past due accounts,” Geraci says. “A lot of times those conversations are going to lead to greater collection than if no efforts were made. That follow up could be the difference between full payment and a writeoff.”
Gavin Geraci is the senior vice president of business banking and specialty segment executive at PNC Business Banking. He has more than 19 years of experience in the financial services industry.
How to reach: PNC Bank, www.pnc.com/attorneys or (877) 535-6316.
If your company is considering a merger or acquisition, do your homework first and make sure the board is in the loop. And while you are at it, bring in outside counsel early enough to avoid problems later.
“Be prepared, particularly if you are a public company,” says Brian JM Quinn, assistant professor of law at Boston College Law School and editor of the M&A Law Prof Blog. “Have a plan with the board so you know what to do in the event that the board or the CEO is approached to be acquired or to take the company private, for example.”
The plan does not need to be detailed, but it at least should contain an idea of what a response should be. Companies sometimes get in trouble when they don’t have plans, and they find themselves making missteps early on.
The board should make instructions clear to the CEO if there is an approach. How much time can a CEO discuss a potential offer with a third party before the board wants to know? To how much can the CEO commit?
“The biggest problem the board’s going to have is just not being in the loop,” Quinn says.
It is possible for a CEO to get approached by a third party, and for whatever reason, the CEO feels it’s not serious ? and will tell the board at its next meeting, which might be in a month.
“That might be too long,” Quinn says. “These are the kinds of things the board can tell the CEO or C-level managers if you get a proposal that's reasonable or seems like it might be reasonable, we want to know.”
Bringing in outside counsel early enough is especially helpful if your company is new to the process of mergers and acquisitions.
“If you are on the sell side, if you don’t bring in outside counsel, bankers or advisers to assist you in the process, you may find yourself giving away more than you would want to just because you don't have the same level of experience in the process as the people on the other side,” Quinn says.
If you are worried about how technology issues are impacting your business, how management issues are demanding more time and how federal regulations are often a challenge to understand, you are not alone.
Setting aside bottom line concerns, these three areas are among the top legal challenges that companies are facing today. But don’t despair. The best advice is ? get legal advice, and do it sooner rather than later.
“The biggest pitfall to avoid is not involving your lawyers until there is a problem,” says Steve Zack, former president of the American Bar Association. “Legal counsel is much more cost-effective if it used preventively rather than as the crisis begins to brew.
“Any issue where your lawyer has not been a partner in your decision-making process is going to become costly,” he says. “Lawyers are there to look over the horizon with you and help you weigh your options. You’ll make more fully informed and better decisions that will save you time, money and legal headaches.”
Here are some tips to find solutions to some of today’s common problems.
Avoid the legal pitfalls of technology
Issues with technology, be it over social media, privacy or data security, are among the top concerns of companies. Many employees today are from what might be called the “TMI Generation” because they reveal too much information ? and information leaks could lead to problems.
“They don’t have a good sense of the walls that should exist between a public personality and their private life,” Zack says. “So they could wind up tweeting information on Twitter about an account or an internal project.”
Too much information can also affect the hiring process. One of the tools employers have started using to screen job candidate applications is to search Facebook and MySpace pages to eliminate the people that might not be desirable to represent their company.
“The problem with using social media is that it gives the person making the hiring decision information that in many ways that person should not have while making that decision,” says Rick Bales, professor at Northern Kentucky University Chase College of Law. “So, for example, you go on to Facebook and get somebody’s birth date, you now know how old they are.”
To avoid a possible age discrimination suit, you should have a low-level staff member do the screening.
“You should have one person who is not a decision-maker do those social media screenings who will report only that part of the information to the person actually going to make the hiring decision,” Bales says.
To protect the company, rules and policies drawn up by your attorneys for use of the Internet and social media should be included in employee manuals.
“It’s important that companies set clear standards and then train and retrain employees on those issues,” Zack says.
Issues that should be considered in the policy will vary because of the nature of the business, how it is operated and what kind of electronic devices are provided to employees. Most concerns are over limiting what can be said through social media about a company and that any social media policy will have to pass muster under the National Labor Relations Act ? employee use of company computers during work time is subject to being reviewed at any time for security and other purposes.
Data security is another technological concern. With a number of companies using cloud computing, where data is stored over the Internet at remote sites, how secure that data is and who can access it are major issues.
“It’s crucial that companies protect their customer data from hackers,” Zack says. “There could be serious liability issues otherwise.”
A data security breach can be devastating for a company, and you need to have steps in place internally in the event that something does happen. Just the case of losing a laptop computer with company information on it can cause major problems.
The cloud computing concept opens new chapters on areas of law that are evolving. If the wrong people get access to your data, do you have a claim against the Internet provider who is managing the data? What about an employee who leaves the company and has the ability to hack your site?
You should consider both the upside and the downside of social media, privacy and data security concerns with your legal counsel.
“Good legal counsel will make the journey easier,” Zack says.
Take training seriously
When it comes to management issues, there is no shortage of pitfalls to be concerned about. Probably the most historical involves promoting a high-performing worker into a management job and failing to give that person the training to be a supervisor.
“This is a perpetual problem from hundreds of years ago ? the training of low-level supervisors,” Bales says
There is a huge difference in the skills that it takes to go from a front-line production worker or sales associate to managing people.
“The skills are not necessarily transferable, and the new managers are often not well-trained,” he says. “They don't know the slightest thing about sexual harassment law or the meaning of nondiscrimination. They haven’t had any training with working with people or dealing with workplace conflicts. They don’t necessarily know how to motivate people.”
The proper approach involves training the person and monitoring the results.
“Start at the bottom and make sure that somebody promoted from the line or the sales force or whatever into a supervisory position for the first time has adequate training and is supervised closely enough so the folks at the top can figure out what challenges that person has and what kind of training that person might need,” he says.
The downside is that there are many potential problems, for example, discrimination suits, claims of bullying and group dynamics issues.
“The person needs to be an effective manager ? very often union campaigns grow out of employees being upset with a manager or supervisor who doesn’t know how to manage,” Bales says.
Sometimes not keeping your house in good order causes headaches that could have been prevented with some foresight.
Take, for instance, employers who have the idea they should document what happens with their workers. Having records of incidents and situations may not offer the security desired.
“Employers still do a terrible job of that, by and large,” says Josh Fershee, associate professor at the University of North Dakota School of Law. “Giving someone a difficult time in one department and moving them to another department, sometimes even with a promotion or a perceived promotion, and then they get to the point where they want to terminate the employee and everything in the records indicates no problems.”
What typically goes hand in-hand with that is not having some clearly stated policies. If that is an at-will employee, he or she can be terminated at any time for cause.
“But employers periodically will make promises that as long as you do a good job or as long as sales are good, you have a job here,” Fershee says. “Well, that can change that status to some degree and those relationships are certainly something to watch out for.”
Play it safe with the feds
The number of federal regulations keeps rising over the years, and along with it comes concern of not just complying with them ? but what do they mean?
One area where misunderstanding the law is creating problems involves compliance with the Americans with Disabilities Act.
“Discrimination is something that they have to take a real amount of care to avoid and obviously comply with the civil rights laws at all levels,” says Carol Miaskoff, assistant legal counsel for the Equal Employment Opportunity Commission.
“But the positive is that the employer is able to benefit from the talents and the contributions of people with disabilities as opposed to just losing that.”
Reasonable accommodation enables employers to make some low-cost modifications that enable an injured or disabled person to stay on the job ? as opposed to being out of work.
“That seems to me to be a win-win situation for employers,” says Chris Kuczynski, assistant legal counsel for the EEOC.
Difficulties may arise over the sense of what is an accommodation for the worker.
“They need to make a reasonable accommodation, but what is reasonable?” Fershee says. “Some instances where businesses get into trouble is that they really try to avoid hiring somebody, whether they know it consciously or not, who comes in with a potential disability, because they don't want to have to accommodate it.”
Doing so may actually create a problem that wouldn’t have existed had they had just moved forward the way they should have. For example, if they think it is going to be too hard to accommodate someone in a wheelchair, some companies don't want to tell the person that's why so they just skip the application even though the person is fully qualified otherwise.
“In fact, the law generally says if you can't accommodate, you don't have to,” Fershee says. “Reasonable accommodation is a fairly low standard most of the time.”
You need to go to an expert in the ADA area and ask what you need to do.
“Oftentimes, the answer is something that works for everybody,” he says. “Or there's something that doesn't work for everybody, but it can insulate them from liability because they've done what they are supposed to: ‘We looked into how much it's going to accommodate and we can't.’ That is often a legitimate defense.”
While virtually unheard of as a term before the 1970s, sexual harassment is a concern in the workplace. Sexual harassment policies are in place at nearly all major companies, schools, universities and the military.
“It’s always a problem in the workplace for two reasons: No. 1, the perception of the person who was on the receiving end of the harassment is always different from the person who was on the giving end of the harassment. No. 2, the legal difference between banter/flirting and sexual harassment is kind of blurry,” Bales says.
The giver may perceive that it was not harassment at all. He or she may perceive it as an expression of sexual interest or as good-natured flirting or as banter while the person on the receiving end may view it very differently and take it much more personally.
“Even a trained attorney or an HR manager may not know at first glance if this is crossing the line or not,” Bales says.
An employee who has a workplace problem needs to have somewhere to go so that the employer gets notice early on and can correct the problem before it rises to the level of legal harassment.
“If this is the first time that the employer has received notice of it and the employer takes prompt action, the employer's not going to get sued or if he does get sued, he’s going to win,” he says. “If a company is big enough and can afford an ombudsman, I think those are terrific. But if not, use someone who is functioning as an HR person.”
How to reach: American Bar Association, www.americanbar.org; Salmon P. Chase College of Law, Northern Kentucky University, chaselaw.nku.edu; School of Law, University of North Dakota, law.und.edu; U.S. Equal Employment Opportunity Commission, www.eeoc.gov