Chapter7
- 1. Chapter 7 PR and the Law This is PR 11th Edition Newsom, Turk and Kruckeberg
- 2. Objectives • To understand the legal environments of PR practice • To be familiar enough with the law to stay within safe boundaries • To develop an appreciation for working with legal counsel • To be sensitive to the impact of litigation on public opinion This is PR 11th Edition Newsom, Turk and Kruckeberg
- 3. Laws Governing PR • All countries have laws that govern what’s legal • What’s legal varies from country to country • To work globally you must be familiar with laws in all countries in which you work • Legal counsel is valuable This is PR 11th Edition Newsom, Turk and Kruckeberg
- 4. Areas of PR Legal Exposure • Normal: Civil, criminal laws that apply to all • Work-oriented: laws particular to PR, publicity, promotions and handling of crises • Extraneous: laws that may affect some PR activities – Expert witness testimony – Corporate political contributions – Lobbying activities This is PR 11th Edition Newsom, Turk and Kruckeberg
- 5. Outsourcing Risks • Organizations responsible for actions of both employees and contract workers • “Work for hire” legally the same as “in- house” work in terms of responsibility This is PR 11th Edition Newsom, Turk and Kruckeberg
- 6. Functional Roots of PR • Commercial speech • Advertising • Traditional speech • Media materials This is PR 11th Edition Newsom, Turk and Kruckeberg
- 7. PR and Civil Law • Can affect communication activities: copyright infringement, violating SEC regulations, distributing misleading news release • Can affect physical activities: accidents, events the organization sponsors • Can be either external or internal This is PR 11th Edition Newsom, Turk and Kruckeberg
- 8. PR and Criminal Law • Bribery • Price fixing • Mail fraud • Securities manipulation • Perjury This is PR 11th Edition Newsom, Turk and Kruckeberg
- 9. Conspiracy Charges Against Practitioners • Engage in illegal activities • Counsel, guide, direct policy behind illegal activities • Take a large personal part in it • Set up a propaganda agency to fight enemies of illegal activities • Cooperate to further illegal activities This is PR 11th Edition Newsom, Turk and Kruckeberg
- 10. Typology of PR Legal Cases • The big case • The human interest case • The routine case • Testimony This is PR 11th Edition Newsom, Turk and Kruckeberg
- 11. The Big Case • Antitrust • Labor relations • Product liability • Mismanagement or fraud • Other litigation This is PR 11th Edition Newsom, Turk and Kruckeberg
- 12. The Human Interest Case • Minor civil rights charge • Local zoning conflict • Privacy suit brought by “glamour” name • Air, water pollution • Retirees seeking pensions This is PR 11th Edition Newsom, Turk and Kruckeberg
- 13. The Routine Case • Mishaps that occur as result of doing business • Breach of contract • Tax refunds • Workman’s compensation This is PR 11th Edition Newsom, Turk and Kruckeberg
- 14. Testimony • A PR practitioner is a participant of an issue at hand such as a retirement program or other company activity in which practitioner has personal interest • High-profile or company executive accused of some illegal act This is PR 11th Edition Newsom, Turk and Kruckeberg
- 15. Litigation Journalism • Increased potential for any legal action to attract attention • Use, manipulation of news and information media to advance positions of parties in civil lawsuits • Promotion efforts of trial lawyers to attract new clients for class action litigation • Sometimes called litigation PR This is PR 11th Edition Newsom, Turk and Kruckeberg
- 16. Duty Obligation • Act in a way consistent with what might be expected of a “reasonable person” • Interpret whether reader or listener acted on the PR message “reasonably” • If result is detrimental and quantifiable, case may be actionable This is PR 11th Edition Newsom, Turk and Kruckeberg
- 17. Detrimental Reliance • Reliance on information that is faulty • Promise is broken • PR either as recipient or source of faulty information, broken promise This is PR 11th Edition Newsom, Turk and Kruckeberg
- 18. Vicarious Liability • Organizational responsibility for actions of employees, contractors • Increasing outsourcing increases vicarious liability This is PR 11th Edition Newsom, Turk and Kruckeberg
- 19. Working with Legal Counsel • If you have counsel, use it • Some attorneys not knowledgeable in communications law so practitioner needs to be familiar • Establish liaison with corporate attorney, outside legal counsel • Relationship important in preparing, reviewing financial materials This is PR 11th Edition Newsom, Turk and Kruckeberg
- 20. Ways to Stay Out of Trouble • Recognize individual responsibility for actions • Know your business • Ignore vague lines between advertising and PR because the law often does • Decide how much risk you are willing to run • Know your enemy, especially in government This is PR 11th Edition Newsom, Turk and Kruckeberg
- 21. PR and Legal Intersections • Meeting federal, state and local government agencies’ regulations • Engaging in government-regulated activities: libel and slander, privacy, contempt of court, copyright, trademarks and patents, lobbying, contracts, advertising claims, promotional activities • Contracting with clients, suppliers This is PR 11th Edition Newsom, Turk and Kruckeberg
- 22. PR’s Greatest Legal Danger Zones • Business memos • Letters • Proxy fights • Use of photos • Product claims • Accusations that might be ruled libel or slander • Promotions involving games, contests This is PR 11th Edition Newsom, Turk and Kruckeberg
- 23. PR’s Greatest Legal Danger Zones (cont.) • Publicity that might misrepresent • Political campaigns • Contracts • Privacy • Actions involving “whistleblowers” This is PR 11th Edition Newsom, Turk and Kruckeberg
- 24. Government Regulations • Postal Service – Senders may be compelled to remove an address from a mailing list – Receivers have absolute discretion to decide whether they wish to receive material – Vendors have no constitutional right to send unwanted materials – Direct Marketing Association helps coordinate controls on unsolicited mail This is PR 11th Edition Newsom, Turk and Kruckeberg
- 25. Government Regulations (cont.) • Securities and Exchange Commission – Affects publicly owned corporations – Affects release of personnel, financial information by all companies regardless of ownership – Best defense in dealing with news releases is to have thorough clearance – Initial Public Offerings (IPOs) are a major concern This is PR 11th Edition Newsom, Turk and Kruckeberg
- 26. Government Regulations (cont.) – Concerns with information, simultaneously disclosed to publics enabling investors to evaluate financial decisions (Regulation FD) – Requires regular reporting of financial condition each quarter (10Q) – Requires special filings that relate to material issues (8K) – Requires annual reports (10K) This is PR 11th Edition Newsom, Turk and Kruckeberg
- 27. Sarbanes-Oxley Corporate Reform Law • Enacted in 2002 • Aim is to bring transparency and responsibility to business practices • Costly to companies because it requires extensive examination of internal audit systems • Requires CEOs and CFOs to sign off personally on validity of all financial reports • Has affected nonprofits as well as publicly held companies • Established Bureau of Consumer Financial Protection This is PR 11th Edition Newsom, Turk and Kruckeberg
- 28. SEC Major Court Decisions • Texas Gulf Sulphur: trading violation resulting from inadequate PR dissemination of information, defined “insider” • Pig ‘N’ Whistle: distribution of misleading, untrue news releases This is PR 11th Edition Newsom, Turk and Kruckeberg
- 29. Executive Compensation Disclosures • Follow-up or additional disclosure may be necessary when: – New events make previous statements misleading – Outside reports are misleading or come from people in a position to have had the information approved by the company – Executives, insiders trade shares – Acquisitions or mergers reach agreement in principle stage This is PR 11th Edition Newsom, Turk and Kruckeberg
- 30. Executive Compensation Disclosures (cont.) • Disclosure of senior executive compensation required in proxy statements – Employment, severance figures – Director compensation – Rewards, payouts, stock options This is PR 11th Edition Newsom, Turk and Kruckeberg
- 31. Rumors, Leaks and Insider Information • Three positions: – Admit and disclose – Make no comment and deny – Dodge and mislead This is PR 11th Edition Newsom, Turk and Kruckeberg
- 32. “Insiders” • Individuals with knowledge not available to others • Knowledge of information not generally available This is PR 11th Edition Newsom, Turk and Kruckeberg
- 33. “Insider Trading” • Using inside information to buy, sell securities, puts, calls or other options on securities • Regardless of whether action taken in name of person initiating the transaction or someone else • Requires immediate notification to the SEC and to the stock market on which the shares are traded and a news release to alert analysts and shareholders and/or potential shareholders This is PR 11th Edition Newsom, Turk and Kruckeberg
- 34. Applicable Government Regulations • Federal Trade Commission – Looks out for rights of both investors and consumers – Compliance with antitrust law, regulations – Guards again false claims in advertising – Advertising provisions have on some occasions been extended to public relations programs – Monitors infomercials as well as commercials – Holds celebrities accountable for statements they make in advertising This is PR 11th Edition Newsom, Turk and Kruckeberg
- 35. Applicable Government Regulations (cont.) • Food and Drug Administration – Protects consumers – Has guidelines for consumer advertising initiated by drug companies – Promotions, news releases as well as ads can lead to FDA trouble This is PR 11th Edition Newsom, Turk and Kruckeberg
- 36. Applicable Government Regulations (cont.) • Federal Communications Commission (FCC) – Broadcasting deregulated in 1981 – No more fairness doctrine since 1987 – Has made it more difficult to get public service time – Greater hesitancy to accept issue advertising with no more fairness doctrine – Equal time rule still in force – Also regulates telecommunications, including telephone and computer, wireless networks and satellite communications – No authority over broadband providers This is PR 11th Edition Newsom, Turk and Kruckeberg
- 37. Lessons From Court Rulings • False, misleading claims: Johnson & Johnson’s Tylenol • Special events: some donations tax deductible • Discrimination and bias cases: airlines • Investor relations: UBS AG of Switzerland • Environmental: BP PLC This is PR 11th Edition Newsom, Turk and Kruckeberg
- 38. Free Speech • May be endangered if publicity, advertising involved • Freedom of organization voice dulled by legal actions against marketing and advertising • Recent gains for corporate free speech (Massachusetts tobacco advertising) and challenges of commercial free speech (Nike) This is PR 11th Edition Newsom, Turk and Kruckeberg
- 39. Restrictions on Institutional Voices • Banning of tobacco advertising on television • Legal action against artists and arts organizations over obscenity • Identification of association affiliation in individual practitioner advertising (Illinois lawyer) This is PR 11th Edition Newsom, Turk and Kruckeberg
- 40. Contempt of Court • Comment on pending case • Failure to comply with judge’s ruling or request • Use of advertising and other communication to influence juries This is PR 11th Edition Newsom, Turk and Kruckeberg
- 41. Publicizing Political Views • State laws cannot prevent firms from publicizing or advertising their position on political issues • Corporations have the right to support candidates and convey information of public interest, whether or not the issue directly affects the company This is PR 11th Edition Newsom, Turk and Kruckeberg
- 42. Responsibilities of Practitioners in Political Situations • Lobbyists must register • Practitioners responsible for accuracy of statements they make, material they provide as a source • Public diplomacy and transparency This is PR 11th Edition Newsom, Turk and Kruckeberg
- 43. Freedom of Information Act • Government-held information available to media, public • Includes company-provided information • Only trade secrets and confidential commercial or financial data obtained from non-government sources are exempt from disclosure This is PR 11th Edition Newsom, Turk and Kruckeberg
- 44. Right to Know Laws • State laws patterned after Federal Freedom of Information law • Information available regarding environmental and other social threats This is PR 11th Edition Newsom, Turk and Kruckeberg
- 45. Open Meeting Laws • Some organizational meetings must be open to the public • “Sunshine” laws in some states keep government meetings open • Personnel matters sometime, but not always, justify closed meeting This is PR 11th Edition Newsom, Turk and Kruckeberg
- 46. Copyright Laws • Protect creative work in both form and style from being used without permission • Organizations own copyrights on materials prepared on company time by employees using company resources • When work is purchased from an outside vendor, agreement regarding ownership should be signed to protect organization, PR person and vendor This is PR 11th Edition Newsom, Turk and Kruckeberg
- 47. Copyright Laws (cont.) • Copyright may be assigned or transferred to someone enabling him or her to reproduce, distribute, copy the work • Covers written and recorded work • An intangible property right that begins when an original work is created • Lasts up to 95 years • Registered with the Copyright Office of the Library of Congress This is PR 11th Edition Newsom, Turk and Kruckeberg
- 48. Copyright Laws (cont.) • Fair use is defense against copyright infringement: use in commentary or criticism, news reporting, teaching, scholarship or research • Music is copyrighted so use in PR usually requires permission and/or payment for use • Internet material can be protected but at issue is grey area of on-line linking to another’s material This is PR 11th Edition Newsom, Turk and Kruckeberg
- 49. Patents and Trademarks • Not the same as copyrights • Patents: government granted protection for inventions and novelties • Trademarks: protection for distinctive recognizable symbols like a brand name or logo This is PR 11th Edition Newsom, Turk and Kruckeberg
- 50. Libel and Slander • Libel is written or otherwise published defamation • Slander is spoken defamation • Libel generally seen as more serious offense than slander This is PR 11th Edition Newsom, Turk and Kruckeberg
- 51. Civil Libel • Non-criminal defamation of character by malicious publication tending to blacken reputation of a living person in a way that exposes him or her to public hatred, contempt or ridicule • Injuring person in his or her trade or profession • “Alleged” offers no protection This is PR 11th Edition Newsom, Turk and Kruckeberg
- 52. Civil Libel (cont.) • When public officials and figures are involved, “actual malice” must be proved • Publication defined as dissemination of more than one copy • Office memos, letters, emails constitute publication This is PR 11th Edition Newsom, Turk and Kruckeberg
- 53. Criminal Libel • Breach of peace or treason • Inciting to riot or some other form of violence • Publishing an obscenity or blasphemy • Charges rarely pressed • Twenty tips to avoid libel suits This is PR 11th Edition Newsom, Turk and Kruckeberg
- 54. Slander • Spoken defamation • If defamation is broadcast, it is civil libel if a script was prepared and distributed to two or more people This is PR 11th Edition Newsom, Turk and Kruckeberg
- 55. Defenses Against Libel • Truth • Privilege • Fair comment This is PR 11th Edition Newsom, Turk and Kruckeberg
- 56. Libel Protection Provided by the Constitution • New York Times v. Sullivan: public official, malice, commercial speech – Supreme Court extends requirements for “actual malice” to public figures other than government officials – Supreme Court holds that public figures must prove statements false, defamatory and published with knowledge they were false or with reckless disregard This is PR 11th Edition Newsom, Turk and Kruckeberg
- 57. Libel Protection Provided by the Constitution (cont.) • Statute of limitations – Varies state by state – Fair comment held to include both facts and opinions This is PR 11th Edition Newsom, Turk and Kruckeberg
- 58. Right of Privacy • Applies only to people, not organizations • Intrusion into solitude • Portraying someone in a false light • Public disclosure of private information • Appropriation of someone’s likeness without consent • Best defense: consent, release forms This is PR 11th Edition Newsom, Turk and Kruckeberg
- 59. Internet Privacy Issues • Information behind an e-mail alias may be subpoenaed • Access to use of personal information in databases • “Cookies” deposited on hard drives by visits to websites This is PR 11th Edition Newsom, Turk and Kruckeberg
- 60. Contracts and Consents • Contracts: spell out exactly what the contracted individual or organization is to do • Consent release: written consent, consideration, scope of use defined, duration, binding, no other consideration involved This is PR 11th Edition Newsom, Turk and Kruckeberg
- 61. Model Releases • Model release: – permission to use someone’s likeness in publicity or advertising – if person is minor, permission of parent or guardian is required – specifies intended use of the photos or video This is PR 11th Edition Newsom, Turk and Kruckeberg
- 62. Employee Contracts • Wise to get employees to sign contract pledging loyalty and confidentiality • Covenant is moral commitment • Contract is a legal document This is PR 11th Edition Newsom, Turk and Kruckeberg
- 63. Photo Agreement • Contract between PR practitioner and freelance photographer hired to work on a photography assignment • Spells out limits, uses for photographs This is PR 11th Edition Newsom, Turk and Kruckeberg
- 64. Work for Hire • Sets up terms of agreement between PR practitioner firm and writer, artist or other individual hired for a specific job This is PR 11th Edition Newsom, Turk and Kruckeberg
- 65. Printing Contract • Should address deadlines, dummies, corrections, makeup and layout, printing technique to be used, materials to be purchased and used, art charges, paper • New contract for each job This is PR 11th Edition Newsom, Turk and Kruckeberg
- 66. PR Services and Taxes • As tax bases are sought, efforts will be made to tax the service sector, including professional services like PR This is PR 11th Edition Newsom, Turk and Kruckeberg
- 67. Working Across Borders • Bribes are tax deductible in some countries, illegal in others • Investment and banking rules that govern securities compliance proceedings vary from country to country • How law enforcement agencies deal with violations also differs from country to country • Advertising regulation varies from country to country This is PR 11th Edition Newsom, Turk and Kruckeberg