If you don't want to see your words blown up poster-size in a courtroom, don't hit that "Send" button in your e-mail program without giving it a lot of thought. Legal and business consultants opine that e-mails may be both the fastest growing form of communication and the most dangerous.
It is their permanency that makes them especially problematic. While paper notes can be easily shredded, e-mails are rarely completely obliterated, and distribution to thousands is by the click of a mouse.
Mark Fiedelholtz, a Plantation communications attorney with Effective Communications, Inc. (www.eliabilities.com) said companies are "in a lot of trouble today. You've got insurance agents using e-mail, instant messages, remote access at home, setting up web sites — and they are woefully untrained in the legal consequences. Agents need to start to understand media law and privacy laws. These people are into risk management. How come they aren't applying their own formulas?"
Fiedelholtz said the blending of personal and business lives is a key part of the problem. "The days of privacy are over, but people still think they can say or write anything they want. Discovery laws have changed, federal laws have changed. The content of what you write online is susceptible to a lot of the new electronic laws. Liability is content driven; a lot of small insurance firms are going to get sued. They make policyholder personal data accessible through their web sites. Has it been encrypted?" he asked.
"People are using mass communications and they have the audacity to think that the cyberworld is some exclusive territory and they won't get sued. Your e-mails and web sites — when you get sued and it goes into court — are going to be considered business records. We need a dose of reality. People have to stop making up their own rules," he said.
Evidence in Lawsuits
Fiedelholtz said that e-mail began as a convenient, productivity-boosting tool. But its very effectiveness has made it ubiquitous. That, in turn, has made it a rich source of evidence that can be used against your company — and even you personally — in criminal and civil lawsuits. Court case after court case in recent years has shown it only takes one "smoking gun" e-mail to topple a company or a career.
At the onset of the continuing massive corporate meltdowns, the Justice Department unveiled indictments against two former hedge-fund senior managers for Bear Stearns Cos., citing fraud and conspiracy. The indictment detailed an e-mail Matthew Tannin sent to colleague Ralph Cioffi from his personal account in which he said the market for the complex bond securities that the funds traded was in trouble.
"If we believe the [collateralized-debt obligation report] is anywhere close to accurate I think we should close the funds now," Tannin e-mailed. "The reason for this is that if [the CDO report] is correct then the entire subprime market is toast. If AAA bonds are systematically downgraded then there is simply no way for us to make money — ever. … Caution would lead us to conclude the [CDO report] is right and we're in bad bad shape."
The indictment also cited a Cioffi e-mail to a another colleague: "I'm sick to my stomach over our performance… ."
Tannin, Cioffi and other high-ranking Bear Stearns executives painted a much rosier picture when they later met with investors, assuring them the funds had plenty of liquidity to survive any upcoming pressure. Legal observers note that the resulting lawsuits and charges relied heavily on both personal and business e-mails sent by the duo.
The Myths of Protection
Without referring specifically to the Bear Sterns case, Fiedelholtz said, "Organizations find themselves at risk because most employees break communications laws, often without knowing it." He said companies get lulled into a false sense of security because of three popular myths regarding e-mail liability:
Myth #1: We have a written e-mail and Internet usage policy, so we're protected. Most written policies are too generic to offer much protection. Plus, having a policy does not guarantee that employees will read it and understand what they must do to comply.
Myth #2: We train our employees about how they can and cannot use our e-mail system and Internet access. Most in-house training programs are too generic, omit important information and strategies, and rarely address the latest changes in applicable laws.
Myth #3: We have an attorney on staff who will let us know if we're breaking any laws. Most attorneys are too busy keeping current on the latest changes and rulings in their area of expertise to develop more than a passing acquaintance with communications law.
To assess your organization, Fiedelholtz offers this short quiz:
Have you ever used your office e-mail or computer to:
- Voice an opinion, pass on a bit of newsworthy office gossip, or comment on hot office topics
- Share that great joke or risqu? picture to co-workers or friends
- Forward a company memo or customer list
- Spend a few minutes surfing the web or sending a quick personal e-mail
- Deleted unnecessary and old e-mail messages from your files
If you answered "yes" to one or more of his questions, Fiedelholtz says you have broken at least one (and probably more) communications laws and unnecessarily put your company, career, finances and reputation at risk.
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