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THE INDIVIDUAL | THE TEAM | THE ORGANIZATION

 
 We caught up with a local expert, Chais Sweat, concerning our topic this week, The Individual, The Team, The Organization. We will learn how the ethics of an individual, a team, and an organization all have a legal impact on one another. Here is what he had to say...

 

What makes this topic so relevant today?

In the modern marketplace, particularly with the ever-growing prevalence of social media, reputations can be damaged in the blink of an eye.  Ethical and professional missteps can be shared, discussed, and evaluated by dozens (or more) colleagues and customers all across the country in a matter of minutes, but responding to and repairing the damage done by such critiques can take far longer.  Worse, violating some ethical and professional norms could even lead to legal troubles.  Being aware of potential ethical and professional pitfalls, and consciously avoiding them, is the best way to protect and build your reputation and prevent any legal liability.

Do you believe there could be personal liability that would be helpful information to someone attending this event?

Driven by falling legal costs and a change in our society's attitude about using the courts to resolve disputes, our country is more litigious than ever.  For most professionals, this means there is an increasing likelihood that professional and ethical violations can and will lead to lawsuits.  Social media issues, employment issues, privacy matters, intellectual property disputes, and contract disputes are increasingly becoming areas where meeting industry professionals find themselves being sued in their personal capacity.  This presentation will discuss "traps for the unwary" - areas where you might not realize there is a potential for legal troubles, including personal liability - and ways to protect yourself and your business.

Will we learn to better protect ourselves and our company?

Absolutely.  Each topic discussed will cover a hypothetical ethical dilemma, followed by discussion of possible response to that dilemma, the consequences of each possible course of action, recommendations for how to handle each situation, and what to do when things go wrong.  We have a lot to cover, but if we do not reach all of the topics, Rebecca and I will be around after the event to discuss further, and will provide our contact information if anyone would like advice after the event.

What is the most interesting current example of an ethical violation that inspires you to speak on this topic?

Two good current examples highlight the importance of some of the topics we'll be covering.  First, we were recently involved in a lawsuit in which two employees (one subject to a non-compete agreement, and the other was not) left a job to work for a competitor and brought certain client information with them to the new job.  The former employer sued the employees individually, as well as their new employer, for breach of the non-compete agreement and breach of fiduciary duty seeking over $1 million in damages.  The attorneys' fees incurred to defend that lawsuit alone were over $250,000.  Second, on September 7, 2017, the Federal Trade Commission sent warning letters to at least 21 "social media influencers" (people who use their social media accounts to advertise products and are compensated for doing so) for failure to properly disclose the nature of their relationship to the product.  The names of those 21 "influencers" has not been released, but we are aware that there is a growing trend among meeting professionals to work with other people or companies to cross-sell products via social media, which could trigger FTC scrutiny if not done properly.  

 

 

 
Chais Sweat is an attorney with Middleberg Riddle Group whose practice focuses on commercial litigation and hospitality.  He has represented national hotel chains, resorts, boutique properties, and event space clients in a wide range of operational matters including drafting contracts, providing regulatory compliance advice, and class action defense.  He has settled or disposed of over 100 lawsuits involving contracts, and has litigated hotel event contracts in multiple states.

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9 Comments

  1. Amanda Milano

    Nov. 17, 2017

    Follow-up questions to Scenario 8 (Sensitive Credit Information): -Are there legal ramifications for a "no comment" response where it's clear that there's "nothing good to say" without saying it? -Can you advise that you think they should check the client's credit themselves--is this insinuating that you also know something is an issue?

  2. Amanda Milano

    Nov. 17, 2017

    Follow-up questions to Scenario 7 (Posting photographs of clients events on social media): -Can the venue opt to tell the vendors that they will only allow sharing photos posted by company employees? Will this avoid liability? -Can photos be taken, but not shared until after the event once the legal team is back to answer the questions? Can they even approve of the photos before posting?

  3. Amanda Milano

    Nov. 17, 2017

    Follow-up questions for Scenario 6 (Significant changes to agreed services by the "person in charge," but not by the authorized signatory to the contract) -If the 2 hour extension is already in the contract, is exercising this option considered a change?

  4. Amanda Milano

    Nov. 17, 2017

    Follow-up questions to Scenario 5 (Using Marketing ideas of 3rd parties without the express permission of the 3rd party) -Our clients do this to us all the time, are there legal grounds we can include in our contracts that prohibit them from stealing our proposed ideas and going direct? -How protected are ideas when they're not patented or copyrighted?

  5. Amanda Milano

    Nov. 17, 2017

    Follow-up questions to Scenario 4 (Sending Gifts): -What if this was a personal relationship before it was a professional relationship? -What if your company allows receiving gifts and you receive a comparable birthday gift from your client/friend?

  6. Amanda Milano

    Nov. 17, 2017

    Follow-up questions for Scenario 3 (Social Media "Influencers") -In this scenario, should you choose to take the deal, is it illegal to convince your clients to also participate? Are you now responsible for paying them? -Can you credit the company with a simple "thanks" and a hashtag or does it need to specifically refer to the exact dollar amount received? Can the disclaimer be vague?

  7. Amanda Milano

    Nov. 17, 2017

    Follow-up questions to Scenario 2 (Taking Clients and/or their contact information with you when you leave one company for another) -If there is a grey area for reaching out to former clients, what is a salesperson's value, if they are likely being hired by the new company because they bring these relationships to the table? -Is a salesperson legally supposed to build a new book of business at each company upon each move? -In a city as small as New Orleans, how can it be avoided to run into a former client and discuss where your new position is? -In the case of association memberships, many memberships are in the name of the individual rather than in the Company's name; therefore, when an employee changes positions, the membership stays with them and is reclassified as the new company. Is there an issue with a member continuing to attend association meetings and informing other members of their new position? Is this considered soliciting business away from the employees former company, especially when the former company likely paid for the membership? -How do you respond to the "I'll follow you anywhere" comment from a client? -Does this largely depend if the change from one employer to another is direct competition. Ex: if you change to a new position within the same industry but are not working for a competing company, could an employee take their clients with them then? -What should an employee do if they are unsure if they've signed a non-compete at hiring? Asking a current employer seems like it would raise some eyebrows. -If all of an employee's client information is on a thumb drive--what should the employee do with this thumb drive upon leaving the company? Does it have to be returned? What if some of the information within this drive was for the employee's own notes and never shared within a CRM during employment? -If the employee has former client's information programmed into their personal phone--what should be done with this information when leaving for another company? Especially if the former company paid a portion of the bill? -If an employee brings their own book of business to a company, is that list now "owned" by that company no matter where the employee works? What if some of those relationships were personal that became professional relationships?

  8. Amanda Milano

    Nov. 17, 2017

    Follow up questions for Scenario 1 (Multiple Vendor Bids): -Are there any legal repercussions when receiving unsolicited competitor pricing or contracts? -How should you address offering multiple vendors with a client when you have had poor experiences with some vendors but don't want to only offer vendors who are friends when you know they take care of your clients? -Shouldn't you be able to offer the most trusted vendors regardless of relationship with them simply because it alleviates liability from your property? Ex: faulty cables, tripping over loose cables, etc. -Is it irresponsible to only offer "higher priced" vendors when you know their services are "worth the expense" rather than give them budget ranges, knowing the results could be disastrous?

  9. Amanda Milano

    Nov. 17, 2017

    Yesterday was an amazing meeting and it looks like it was such a hot topic that we were left some follow up questions from each scenario! Chais and Rebecca have gratiously offered to answer some of these and for more detailed or complex answers, please reach out to Chais and Rebecca directly to schedule a meeting: Chais Sweat csweat@midrid.com Rebecca Miller rmiller@midrid.com Please see below for follow up questions and submit your own! Chais and Rebecca will respond on this thread so keep checking back for answers to your questions!