Joining me on this week’s episode is Michael Lasky. He is the co-chair of the litigation practice group of Davis and Gilbert and devotes a significant portion of his practice to advising executives and owners of public relations and advertising firms on their employment, shareholder incentive compensation and related arrangements.
In the interview, Michael shares great insight on a number of topics including:
- The ethics of talent migration
- The intersection of creativity, ethics and legality
- The best ethics advice he ever received
Why don’t you start off by telling us a little bit more about yourself, your job, your career, and how Davis and Gilbert helps public relations professionals?
I like to say that both my job and my career has been a combination of serendipity and design, and maybe that’s true for many of your listeners as well. The design, we’ll go there first, was when I joined- Davis and Gilbert is a national law firm based in New York City, 135 lawyers under one roof, and I have the pleasure and privilege of being about the 29th hire, and that was 35 years ago. The firm was very well known for representing old media when it was new media. We put the first radio spots on the air for Proctor and Gamble, and we’ve been synonymous with the monetization of what we now refer to as commercial speech since the very early days of the technology that allowed that.
When I joined the firm, advertising was king and everything else was a below the line business, so we had a very strong and well known advertising law practice, but the other practice areas that we now have come to know as marketing communications law and public relations law had not yet emerged. I looked at what Davis and Gilbert did very well, which was help businesses whose principle assets for people and ideas, and looked for, in classic business school terms, logical line extensions, because I had done an enormous amount of writing actually my whole life. I was editor-in-chief of a 1,200-page scholarly journal when in law school and I was a Broadway theater critic for a while. The written word has always been very meaningful to me in terms of what it does to communicate ideas.
I started the public relations law practice at Davis and Gilbert in the mid-eighties, which remains actually the only law practice of its kind in the entire country. We assist public relations firms, both small, medium size, large privately held, publicly held in an integrated way on their needs. Those can be in the areas of employment marketing law, master services agreement, intellectual property, shareholder’s agreements, acquisitions, purchases, and sort of the legal needs of growing a business.
The serendipity part of my career was that pretty early in my career, I was asked to handle a pretty difficult noncompete case for an investor relations firm that was owned by an advertising agency back then. The case made law in New York about what constituted a trade secret, and my client at the time was the president of this investor relations firm, Gavin Anderson Durimas, a name from the past which was owned by BBDO, before actually it was acquired by Omnicom. My client at the time was the president of Gavin Andersen Durimas, a fellow by the name of Dick Truett, who was very active in the Public Relations Society of America on a national level, and also in PRSA Counselor’s Academy.
To make a long story short, we won the case involving a potential acquisition by Gavin Anderson Durimas of another investor relations firm. The deal was not consummated, but in the course of considering the transaction, my client got to know the number two executive at the firm, not an owner, and decided after the deal collapsed, to hire that person. Well, they hired that executive who was a well-known figure in investor relations circles. What followed was the collapse of his former employer, the target of the acquisition. What followed was a lawsuit by the target of the acquisition against Gavin Anderson Durimas and its former executive for essentially the value of the destruction of the business plus the breach or the violation of the restrictive covenant and a violation of that target company’s trade secrets. We ultimately won the case.
But in 1986 my client, Dick Truett, started talking about ethics. He was really interested about the ethical issues confronted by the movement of talent between competitive organizations and what was fair competition and what was unfair competition. That year, he invited myself and some other folks of some note like Bill Novelli, then the CEO of Porter Novelli, to speak in a plenary session of the National Conference of the Public Relations Society of America on ethics in business and public relations. I can assure you that in the mid-eighties, nobody was talking about ethics, let alone in public relations or in business. That was the serendipity of how the practice area at my firm began.
Without naming any names, can you tell me about the most difficult ethical challenge you confronted at work?
By and large, lawyers need to be very careful about the clients they take. Some of the best decisions you may make are not taking on certain clients who you think your ethical obligations will be compromised. Actually, lawyers by statute have very strict ethical obligations. There are definitely ethical obligations that apply to all lawyers, and lawyers can be called before the state disciplinary committee for the violation of those ethics. I don’t know if I’m unusual in that respect, but I don’t think I’ve had really serious ethical challenges, although I will tell you one story, which is pretty amazing.
One certainly unusual ethical challenge, which had an easy answer to me, though it was difficult in the moment, was I was involved in a case a number of years ago involving the movement of talent between competitors. This was a case in which a competitor to a medium-sized agency had arranged to literally on one Friday hire two-thirds of the agency overnight, leaving the agency and its clients irreparably damaged. I was part of a team of lawyers at Davis and Gilbert that brought what is referred to as a preliminary injunction to stop the damage in the hiring of additional people, and it led to a 13-week court hearing. Because of some of the sensitive items that were being discussed in the hearing, and not to further damage my client, the judge ordered the certain testimony be under seal, not made public, and essentially be provided what’s called in camera, which literally means in the judge’s robing room, and while it’s taken down by a court reporter, it’s not otherwise publicly available. There was strict confidentiality around that testimony.
This case was getting a lot of publicity. It was front page news in the New York Times and the Wall Street Journal every single day of the hearing. There was some big name clients involved, and it had a lot of drama. Let’s put it that way. A lot of personality, a lot of drama, a lot of smoking guns, a lot of telltale documents. It could well have been a good series on Law and Order, but Law and Order was not around back. In any event, there was a break one day in the proceedings in court when testimony was ongoing. Like a lot of times when there’s a court break and it’s a long day, I went into the restroom to use the facilities, and in comes my opposing counsel and they didn’t see me, but I overheard a conversation that the opposing counsel, who was an extremely well known lawyer of enormous stature and experience, and he is talking to a paralegal at his firm about sending out portions of the in camera testimony to their media lists.
This violated the court’s specific direction, and certainly was going to further damage my client because the whole reason why it was taken under seal and not public was there had to be some testimony about the harm that our client had been facing, and of course you didn’t want to, by making this information public, increase the harm so that the whole company would collapse. More people would leave, maybe not to go to this competitor, but leave for other employers. Then also more clients would flee. We were trying to scaffold our client and stabilize it.
I had to go back into open court and basically tell the judge exactly what happened, something that thought I would probably never be doing in my legal career. It led to a sanctions motion against an extremely reputable law firm and senior partner, and it was one of those truth or dare moments. There was only one thing that I could do, both based upon my ethical obligation and also the court rule was to tell the truth, and that’s exactly what I did. The case subsequently settled for undisclosed but very significant dollar amount about five, six weeks later. You won’t be surprised when I tell you that both this lawyer and the law firm made sure that a condition of the settlement was dropping the sanctions motion.
When you’re talking about the migration of talent, what are some of the ethical issues agency owners and agencies and staff should keep in mind when it comes to migrating from one firm to another or from a company to an agency?
There really is an important role here for informed legal advice and good counsel, but there are some really critical do’s and don’ts and some of them exist independent of any written agreement that an executive may have with his or her company. Some may be enhanced by a written agreement with the company, but their employer, whether that’s part of a standalone protective or restrictive covenant or whether that’s part of an incentive compensation program or an employment manual or any of the above, those obligations that exist without a piece of paper, obligations that exist. Common law, that’s the expression. They’re independent of any statute or contract, and those are not to use another party’s confidential information. During the time of your employment, there may be things that come to you in a privileged capacity. Those remain the property of the company when you choose to leave.
Now, there’s the balance between fair and unfair competition. The executive can certainly move forward and benefit from his skill and experience. That’s fair competition, but just by illustration, taking the company’s last financial report or the confidential planning document that was prepared for a client in a particular industry when you leave is unfair competition.
Good counsel would be when you leave, take the pictures of the husband and the kids and the dog and the running shoes, but leave everything else at your former place of employment. It is company property. It becomes a little interesting now given that most people work remotely 24/7. There are things on home computers, so you really have to leave with a degree of knowledge and forethought on these rules of the game and how you’re going to make sure that you haven’t commingled company documents with personal devices.
On a secondary basis, those common law obligations might well be enhanced by a written agreement that you have with a few of the executives with the company, and those agreements take a variety of form. There’s a lot of recent law in that area. In fact, as some of your listeners might know, I’m privileged to be one of five op-ed columnists in PR Week, and every five weeks I write a legal column in PR Week. The next column is actually on this subject, which details some changes in the law involving at will employees, which is the way most employees, even executives, work in the US, whether or not their restrictive covenants can be enforced if they are terminated by their company without cause. This area is governed by state law, and not to get your listeners too much into the weeds or give them a remote JD, but there are significant developments in a number of states where there’s a growing trend to not have covenants enforced against executives or employees if their departure from the company was not of their doing and not because they did something wrong.
There are, however, many quite enforceable restrictive or protective covenants, I would counsel companies to prepare them in a way that they’re narrowly tailored to meet the company’s legitimate needs. I would also counsel executives to make sure they have good legal counsel in reviewing those before they sign them. But there is a healthy and legitimate balance of the goodwill of client relationships that may be the product of the hard work of the company, and without the relationship that was built while this executive was working for this company, the executive would not have any knowledge or access to that client. There is a legitimate period of time where that relationship is, if you will, the property of the company and should not be interfered with by someone should he or she depart from the company in a certain manner. There are boundaries between what’s fair and unfair competition. It actually very much depends on the facts and circumstances of how the covenant was agreed to, whether there was consideration provided to the executive, when in the employment process it was provided, and frankly if it’s a departing executive, and the executive is departing not of his or her own volition, then the question becomes was there some severance payment to reaffirm the existence of the covenant? It really does go to this ethical balance between what’s legitimate and fair competition in an entrepreneurial and capitalist society, and what is unfair competition.
What are some of the other top ethical issues you’re seeing?
There are certainly a whole host of issues that are very much in the moment for public relations firms today. I’d put them all in the category of appropriate disclosures and making sure that the intended audience of the message, whether that’s a blog post or a tweet or a social media post or the design of a website, accurately reflects who or what is the source of this opinion or endorsement. It is easier now than ever to have those lines blurred. There have been many FTC cases recently involving several public relations firms about essentially the use of influencers that don’t indicate they’re being paid by the marketer, using a celebrity in frankly any context without making it clear that there is a material benefit, whether that’s money or some other material benefit that the celebrity is receiving from, again, either the marketer or the public relations firms.
This whole area has been very much top of mind both among enforcers like the FTC that are the regulators of commercial speech as well as the public relations firms who, frankly, face both a reputational risk and a risk to their client if they’re not mindful of their clients and these appropriate boundaries. This is an area where many public relations firms are doing significant internal training of their staff to make sure that both these ethical and legal guidelines are properly met. I like to say that the right place for a smart public relations firm to be in this area is, if you think of a Venn Diagram and two circles, with one circle representing creative ideas, a second circle representing what is ethical, and a third circle representing what’s legal. Where those three circles intersect is exactly the sweet spot of best practice. It also is the most authentic, and it allows a level of trust and transparency that are key to public relations firms and their clients. Actually, from a business perspective, it enhances your clients’ reputations and perhaps even everything else that’s important to your clients. Making sure that those lines are clear I think is absolutely critical.
I always will come down on this side of greater transparency and greater disclosure because that tends to keep you out of trouble.
Yeah, I think that’s good advice. A favorite, very practical guide on this whole area of disclosures, no matter what platform you’re talking about, is what one client refers to as the mom test. If you think about your mom at home looking or hearing a particular message in whatever medium it was being delivered, would your mom have a different opinion about the message if she knew a fact that’s not being disclosed? If the answer to that question is yes, then it sure sounds like disclosure is appropriate, and it really goes to sort of the weight and credibility of the person making the statement. If that’s going to be impacted by something you’re not telling the intended audience, then it’s in favor of disclosure. Sometimes that’s hard to get through in a few characters, and the FTC has very particular rules on how those hashtags need to be presented in the like.
What about new areas? As we’re seeing are the rise of AI and big data and all these other elements there, are there other developing areas that you believe public relations professionals should pay attention to?
Well, I think it’s a little bit of old wine in new bottles, but the same ethical issues. How you use and present the data has become incredibly important. Measurement has become incredibly important. Analytics have a very significant role now, predictive analytics and behavioral marketing and all of those things.
Last May, many firms in the US were scrambling to make sure that they were compliant with the privacy laws that were applying extra territorially to any company that was doing any form of business with people located in the EU. GDPR laws. But now a whole group of states in the US have essentially mini-GDPR statutes. Personal identifiable information can be as little as an email address. I think those are issues that should be absolutely top of mind for. We’re doing a lot of work in this area and holding a conference here in our offices on April 18th on just that issue, being run jointly with the PR Council but it’s open to non-PR council members as well.
If people wanted to sign up for that conference, should they visit the Davis and Gilbert website?
Yes, it will be on our website.
What is the best piece of ethics that advice you were ever given?
Well, this may be said many times, but I think it’s really true. Would you be comfortable if what you were doing was appearing on the front page of the New York Times, assuming it was newsworthy? If the answer to that is yes, well then, your client confidences aside – if you’re comfortable with something seeing the light of day, then presumably you’re in the clear zone. If that gives you pause, maybe think twice about doing it.
I think in this day and age, there are many things that should be discussed by phone or in person. People say and do the darnedest thing on email, and somehow still think that emails are different than a memo they might prepare when they’re both documents that live forever. No one gave me that advice because I don’t think anyone had to. My documents, presumably, they’re to clients and are covered by the attorney client privilege, but that’s not a luxury that people who are not attorneys have. The secondary piece would be to think twice before you hit send, and think about whether there’s another and more appropriate way to convey the information if it’s highly sensitive or you’re writing something in an inflammatory or off the cuff way.
If people wanted to find more information about these topics are about what you do, where should they go?
Easy to find me. Michael Lasky. My email addresses email@example.com. They can just send me an email. We have a robust website, we have this old fashioned idea that knowledge is power, so we put out a fair amount of thought leadership, which we write all ourselves. If people are interested in signing up to receive any of that, it’s segmented by various subject matters from public relations law to employment law, new media law, advertising law, corporate law, benefits law, et cetera. But we make all of it, these are not law review articles, these are not treatises. These are practical alerts on best practices that affect business owners and professionals. Certainly just sending me an email and asking for information on a particular topic and/or to consult on a particular topic is the best way to find out or get more information.
Check out the complete interview, with bonus content, here:
- Stop Putting Profit Over Ethics – Sabrina Ram - January 18, 2021
- This Week in PR Ethics (1/14/20) – Trust, Activism and Training - January 14, 2021
- What Do You Do When Your Client Pulls A Bait And Switch? – Craig Sender - January 11, 2021