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David Machlowitz spent enough time as a general counsel to suspect that many fellow GCs would rather be “negotiating with the Taliban right now” than sitting in the hot seat occupied by Peter Kilgore, the general counsel of the National Restaurant Association who is dealing with the fallout from the Herman Cain sexual harassment allegations. Machlowitz, retired GC of giant Medco Health Solutions Inc., was joking; but Kilgore probably isn’t laughing. He’s too busy fielding the legal and media demands after being thrust into the spotlight when allegations arose that Cain harassed one or more female employees while president of the association between 1996 and 1999. Kilgore has been GC since 1995, and according to news reports, he negotiated one or more of the financial settlements with Cain’s accusers. He also reportedly conducted an internal investigation of Cain, now a Republican presidential contender, after the allegations. Kilgore hasn’t returned messages for comment. So how does a GC balance the various competing interests—the public’s right to know, the employee’s right to privacy, Cain’s legal rights—in such a situation? Glenn Engelmann, former general counsel at Astrazeneca Pharmaceuticals, said in general when a GC is put in the middle of a high-profile crisis, there are two important steps to take: coordination and communication. (Engelmann stressed that he has no insight into the Cain controversy or how Kilgore is handling it.) There must be extremely close coordination between the general counsel, the CEO, and the head of communications, said Engelmann, who since September has been a member of McDermott, Will & Emery in Washington, D.C. “When the media is involved, it’s a fine balance between a lawyer’s knee-jerk reaction to not want to say anything until all the facts are in, and the media’s knee-jerk reaction to get out there with a story,” he explained. Communicate with the media early and often, Engelmann advised, but base it on accurate facts. “You need to set up a relationship with the media; let them know you’ll come back as you learn more facts,” he added. He noted that privacy laws have to be respected. “But at the same time, there may be aspects or facts that may be perfectly suitable to address in public,” he added. Addressing such a public crisis in a recent CorpCounsel.com column, attorney and communications consultant James Haggerty advised that the time to form a response policy “is well before the first reporter has called to ask about your employee’s behavior.” Haggerty continued, “You don’t want to be making this stuff up as you go along. Difficult lines must be drawn, to be sure, but draw them you must.” Machlowitz, the retired GC, said for Kilgore the balancing question should be an easy one. “The GC’s main concern has to be the interests of the National Restaurant Association,” he explained. And that means honoring the confidentiality promise in any legal agreement. “Unless both Mr. Cain and his accuser waive, in writing, any rights of confidentiality under the agreement, the National Restaurant Association is obligated not to waive it,” he added. The public’s right to know is not relevant, the former GC said. “I have never heard of a lawyer disclosing a client confidence because he or she believed attorney-client privilege was subordinate to the public’s right to know about a political candidate,” he explained. Besides, he added, disclosure could get the GC fired or even disbarred. For Machlowitz, there are more worrisome questions lurking, such as: What happens if an accuser goes public—should the association sue for breach of the confidentiality agreement? Or what if Cain declares he wants to clear his name and would like the group to disclose all the facts? “In either of these cases, the National Restaurant Association could not only become the story, but become the villain of the story,” the ex-GC theorized, and that’s something a good general counsel doesn’t want to let happen. See also: “National Restaurant Association GC Weighing Proposal on Cain Allegations,” CorpCounsel, November 2011.

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