Experts Weigh In on Yahoo GC's Warning About LeaksShannon Green Corporate Counsel
09-27-2012
As any fourth grader who’s had a love note read aloud by her teacher will tell you, it doesn’t feel good when private material ends up in the hands of unintended recipients. In-house lawyers also tend to prefer keeping internal correspondence away from the general public. But did a recent “Leaks Uncool” warning Yahoo! Inc. general counsel Ron Bell reportedly sent to company employees go too far?
According to an All Things Digital post earlier this week, Bell told Yahoo employees:
It’s never OK to share information in an internal memo EVEN if the company issues public communications about the same subject…We will fire employees who leak company confidential information and we will avail ourselves of all other legal remedies to protect those confidences.
The new GC’s warning didn’t stop with warnings of termination and lawsuits. He added, “If you do it, you can go to jail and face a very large fine.”
Was Bell just blowing smoke, or do workers at Yahoo and elsewhere really need to worry about doing time for leaking internal information? (Yahoo did not respond to a request for comment from Bell. )
Curious, we asked experts to weigh in on the snippets of Bell’s admonishment that were published online and to share their version of sound external communication polices. And they had mixed reactions about Bell’s approach.
Robert Bishop, a partner with Pitta & Giblin in New York, says that although a company would be within its rights to discipline or dismiss a worker for a serious confidentiality breach, a warning of criminal enforcement should be described in detail. “Employees should be given more to go on,” he says, so that they know exactly what kind of circumstance would give rise to prosecution.”
He adds, “If you’re releasing what should be protected insider information to people who act on it to purchase stock,” for example, that would be criminal. But he says that the instances warranting criminal repercussions are limited.
Bishop represents clients in legislative, administrative agency, and government relations matters. He recognizes that Yahoo’s GC was trying to remind employees that leaking confidential information can have negative consequences for both the company and members of its staff. He says that a recent leak concerning internal communication about Yahoo’s sale of a portion of its stake in the Alibaba Group before it was final gave Bell legitimate cause for concern.
When determining how to limit external communication, he advises employers to be mindful of obligations or protections an employee might have to release information. “It’s a very complicated area that he’s trying to bring down to very simple terms,” says Bishop.
Aimee Delaney, a partner with Hinshaw & Culbertson, says that policies that are too restrictive may end up backfiring on employers. A partner in the firm’s labor and employment law department, Delaney often advises companies in their formulation of employee policies. “My take on things is always that you are really never safe as an employer with a bright-line policy on anything,” she says.
Based solely on the portions of Bell’s memo posted online, Delaney says that she has never seen a policy so restrictive. The problem with comprehensive bans on communication, she says, is that employers overlook exceptions that could end up creating legal problems for the company.
“What if the employee was trying to bring out information about policies or conduct within the company that was unlawful, and they’re a whistleblower?” State and federal statutes would protect the employee’s communication. Any bright-line policy warning workers that they’ll be fired and criminally prosecuted, says Delaney, could “wind up as an exhibit in a retaliation claim or whistleblower lawsuit” against the company.
Delaney advises that clients instead take a more measured approach to drafting policies concerning external communication. It’s not unlawful to have policies that restrict employees’ ability to disclose trade secrets and other proprietary or confidential information, she says. “Sit back and think substantively about what you’re trying to protect, without running afoul of employee protections,” she says, “so that you don’t create a policy that can be used against you.”
See also: " 'Leaks Uncool' According to Yahoo GC's Leaked Memo," CorpCounsel, September 2012.
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