General Counsels Beware: Assume That Anything Can Go Viral in the #MeToo Era

In March 2023, at the American Bar Association’s White Collar Crime Institute in Miami, Gary S. Lincenberg moderated a panel of general counsels. The panel covered a range of different issues; this post focuses on the discussion about changing approaches to confidentiality and privilege in the context of internal investigations. 

For decades, general counsels, along with their outside counsel, have conducted internal investigations according to a relatively well-established, reliable set of rules, under which protections of confidentiality, privilege, and work product provided some measure of control over what was publicly communicated or disclosed about the investigation. But recent events, shifting public views, and the power of social media have forced general counsels to adjust how they approach internal investigations. They increasingly presume that the “internal” in an internal investigation is a thing of the past, and that anything and everything will be made public and viral. If assurances or commitments of confidentiality are no longer reliable, that has implications for how to counsel a client about the value and wisdom of non-disclosure agreements (“NDAs”) negotiated in the context of confidential settlements, and about safeguarding the attorney-client privilege.

NDAs have long been used by companies to guard against reputational harm that could result from public disclosure of serious allegations, including allegations of sexual misconduct and racial discrimination. Although NDAs are still one tool that general counsel might use to resolve confidential disputes or litigation, general counsels perceive that NDAs have lost legitimacy amongst the general population. Discourse around NDAs shifted radically following the rise of the #MeToo movement, which exposed widespread sexual assault and harassment in the workplace. NDAs were criticized for silencing the voices of victims in service of protecting the interests of powerful corporations and people. Women’s and victims’ rights advocates challenged use of NDAs to keep victims of sexual harassment quiet, including because they prevent other women from knowing the identity of alleged abusers, making it more difficult to identify and root out repeat offenders.
Parties seeking to enforce NDAs can seek injunctive relief—an order directing the allegedly violating party to cease disclosing information—and damages. But as we’ve seen in some high-profile cases where women subject to NDAs have spoken out, a company can suffer greater reputational harm from suing a current or former employee for disclosing information about sexual misconduct, than from the adverse publicity of the underlying conduct itself. Indeed, in response to such cases, Congress passed the Speak Out Act, which President Biden signed into law on December 7, 2022. The law prevents the enforcement of NDAs in instances of sexual assault and harassment, and thus further undermines the value of such NDAs in those circumstances. The Speak Out Act applies with respect to a claim filed under Federal, State, or Tribal law. 

Relatedly, general counsels have recognized the value of the attorney-client privilege to promote candid, confidential communications with outside counsel conducting an internal investigation. Throughout the course of an investigation, employees communicate with counsel through multiple channels, including email and internal and (at their peril) external text messaging platforms. Simply including general counsel on communications is often insufficient to invoke privilege should an investigation turn into litigation. The omnipresence of social media users who can broadcast privileged information in a flash presents a greater risk than email both because social media provides a layer of anonymity, and because emails are between a limited number of people, whereas the potential reach of a tweet, a Facebook post, or Instagram is near limitless. 

Rather than risk a future, potentially public, battle over privilege issues, general counsels are more frequently advising their clients to strategically disclose privileged information early on in an investigation, especially where counsel believes that the allegations are true or are particularly serious. General counsels believe that transparency can go a long way reputationally, as well as can allow the client to shape the narrative with government regulators and the public rather than be put in a defensive posture. And general counsels understand that this approach can be of such broader short- and long-term importance to the company that it outweighs the risks that such disclosures might pose in future litigation. 

Ultimately, how a general counsel is confronted with a question of whether to enter or enforce an NDA, or how vigorously to guard the attorney-client privilege, will resolve the question depending upon the particular facts and circumstances of that case. But the shifting confidentiality landscape presents general counsels with new challenges as they counsel their clients about the potential risks and “rewards” of rethinking confidentiality. 

Information provided on InsightZS should not be considered legal advice and expressed views are those of the authors alone. Readers should seek specific legal guidance before acting in any particular circumstance.

Antoinette Pick-Jones_Listing

Antoinette Pick-Jones
Email | +1 212.897.3439

As the regulatory and business environments in which our clients operate grow increasingly complex, we identify and offer perspectives on significant legal developments affecting businesses, organizations, and individuals. Each post aims to address timely issues and trends by evaluating impactful decisions, sharing observations of key enforcement changes, or distilling best practices drawn from experience. InsightZS also features personal interest pieces about the impact of our legal work in our communities and about associate life at Zuckerman Spaeder.

Information provided on InsightZS should not be considered legal advice and expressed views are those of the authors alone. Readers should seek specific legal guidance before acting in any particular circumstance.