It Only Takes One Document to Bring Down the House: Six Actions to Avoid DisasterMay 27, 2022 – Corporate Counsel Business Journal
Published in Corporate Counsel Business Journal
Authors: Ronald J. Levine, Herrick counsel, and Richard Torrenzano of The Torrenzano Group
A jury just returned a verdict of $25 million in damages against a defendant lending institution. A senior executive sitting in the courtroom was in shock. One juror remained behind and agreed to discuss deliberations.
The executive listens intently as the company’s attorney spoke with the juror. She mentions the key evidence in finding the company liable was from a senior vice president who, in text messages to a friend casually mentioned that the lender’s products were “toxic” and “poison.”
The bank executive murmurs to himself, “If only we had trained employees to be more thoughtful in their communications.” The company’s management discovered dangers of contemporary communications in the worst conceivable way.
Digital access and use today are paramount in our professional and personal lives. Imagine digital communications not working for 24 hours or more? Teenagers would weep. Business leaders would be powerless... and most of us would be confused and grumpy.
Sending and receiving messages over a secured communication network manifests in various forms of electronic platforms – E-messages, e mail, instant messaging, live chat, text messaging, etc. They have become the primary form of communications between employees.
We know these communication platforms as Outlook, Gmail, Yahoo Mail, Microsoft365, Teams, Slack, Hangouts, WhatsApp, Signal and by many other names. Additionally, some organizations have internal proprietary software for communications.
And these new communications go deep. Just the other day, SEC asked for mobile phones data as it widened its probe into use of text messages, WhatsApp, as well as personal email accounts, for top Wall Street bankers and traders.
For this article and simplicity, all these communications are referred to as “E-messages.”
These communications are not informal as many believe and have become evidence of choice in embarrassing companies and in litigation.
Why have E-messages become such a major issue?
For emails alone, sent and received globally has increased dramatically since 2017. According to Statista, more than 306 billion emails were sent and received each day in 2020. And this figure of daily emails is expected to increase to more than 376 billion by 2025. That’s enormous potential risk for corporations and organizations.
With increased use of E-messages broadly, there is evidence that litigation against companies is now more focused on employee comments and discussions. To protect company assets, do you think a complete and updated E-messaging policy, as well as a training program for employees, might be in order?
E-messages can embarrass a company in public as well as be used against it in litigation. Hundreds of "good" E-messages will not matter if that one "bad" message is sitting around, waiting to be discovered during pretrial activities.
Unlike Snapchat, where content is short-lived and disappears ... e-mails and other documents reside permanently on hard drives, servers or in the Cloud, can be copied digitally and placed in secret digital files, can be photographed, printed and placed in paper files ... or copies in whatever form, taken by employees for their use or shared with others.
Every organization’s inside and outside legal counsel, and communications professionals should take a dual lead in developing educational employee training programs about writing and distributing E-messages. Additionally, this training should be part of any new employee orientation.
From a legal view company E-messages:
- Are discoverable in litigation.
- May well be read by an adversary one day.
- Can and will be used against its author and employer.
- If not clear, may be taken out of context.
- In any litigation, will be viewed in the light most favorable to the claimant.
From a communications view:
- Craft E-messages that are in line with the company's mission.
- Commentary should be consistent, spoken and written in simple English (or the company’s country’s language).
- Write as if you were talking to first-year college students — not in corporate speak or legalese. Avoid acronyms or industry jargon.
- Reread when complete. The reader needs to understand what you are communicating. Write for the reader, not yourself.
“What We’ve Got Here Is Failure to Communicate.” The line spoken by the prison warden to Paul Newman’s character in the 1967 film classic “Cool Hand Luke.” It is a reminder to follow the "KISS" Principle -- Keep It Simple Stupid. A most obvious concept…….unfortunately, not always followed.
Today, every organization needs a current, up-to-date policy on writing E-messages, as well as training for those policies. Of course, that policy should be part of the company handbook and disseminated to all employees.
Many corporations in highly regulated environments have adopted compliance strategies. That approach includes randomly monitoring content of all company E-messages. Others have a more elaborate Artificial Intelligence programs deploying real time content analysis capabilities to prevent delivery of non-compliant information.
With respect to these strategies, companies have advised employees that they should have no expectation of privacy, and their E-messages are monitored.
In developing any program on E-messages, companies should include the following six fundamental rules in their email policies and training:
First: Think twice, click once.
Before you hit the send button, reread E-messages and understand what you write could be published in media or posted on social media with the company’s name and logo. Indeed, a company might even print “Think Before Clicking” on the top of computers, or other forms of reminders.
Some companies have learned the hard way that E-messages wind up highlighted in the world’s leading media. Indeed, even a leading social media company’s internal E-messages resulted in major complications.
In a highly publicized story, a New York Times article, “Facebook E-messages Show Its Real Mission: Making Money and Crushing Competition,” reported on 250 pages of internal E-messages in which Facebook discussed ways to undermine their competitors.
Second: Copy few.
Too many copy the globe when sending messages. Recipients should be limited to those who really need to know the information. Before sending any message, particularly when it includes potentially sensitive information, most people will never ask themselves, but should, "Do I want to be responsible for making everyone who receives my communication to be a target for discovery or a potential witness at trial?"
A wide “copy” can also remove legal confidentiality and privilege. If replies to an email from legal counsel are copied to people outside the company, in an otherwise privileged communication, that document could lose that privilege.
Third: Telephones still work.
Unfortunately, in the digital world of instant messaging, the telephone has been replaced by the keyboard. Instant message creates a permanent record, which is not the case with an oral conversation.
Avoid E-messages where a phone call or a short meeting would be appropriate. Employees should ask, "Should I commit this to writing?“
Keep in mind that virtual calls and meetings can also be recorded. Indeed, while it may be illegal to surreptitiously record a call without the participants’ permission, it can be done easily.
In fact, anyone attending an in-person meeting can record a conversation. Look around when sitting in a meeting. Does anyone seem to be recording what is actually said with a mobile phone?
Importantly, any training should remind employees that words – oral or written – must be used with care. Simply, think before you speak or write. Some are particularly good at this... others are not. Which are you?
Fourth: Avoid expressing liability opinions.
Employees should avoid playing lawyer, judge or jury concerning their company. Words such as "liability," "dangerous" and "defect" are immensely powerful and should not be used without great discretion.
Do not put on the "lawyer" hat if you are not a lawyer. And drop this phrase from E-messages: "I am not a lawyer but... ". Further, if an email is sent documenting a problem, the writer should also note what steps have been taken so far to resolve the issue.
Fifth: Accuracy counts.
E-messages are all far too often written rushed or when we are stressed. Avoid this, as well as speculation, in order to reflect before committing information to writing. Off the top comments can be turned into a "gospel" by an adversary in a litigation.
Sixth: Ambiguities will be construed against the company.
An email can be deemed to be an admission on behalf of the entire company, not just by the employee.
Similarly, E-messages should not be a vehicle for "venting." All companies should have non complicated protocols and procedures to pursue performance-related issues.
Six simple rules.
If that senior vice president had received training, company management would not have a $25 million liability in the quarterly bottom line; their insurance rates, which are soaring in this business environment, might not be doubling.
And the company’s equity value, as well as employee morale, infected and reflected by news and social media coverage of the verdict, would not be suffering so badly.
Some companies have instituted “smart writing” training. Unfortunately, too many only introduce these education and training programs after getting burned by someone who did not think twice before clicking.
This article originally appeared in Corporate Counsel Business Journal.