Chapter 6

How Miscommunications Create Liabilities
Avoiding Smoking Guns

Traffic cones on the highway slowly funnel cars into one lane. Up ahead, at the Delaware border, the first sign of trouble is a police car parked on the shoulder. Then the driver sees it: a sign with big black letters reading CLOSED right next to the “Welcome to the State of Delaware” sign. A man in uniform, clipboard in hand, walks slowly toward the car.

            “What’s going on here, officer?” the driver asks, rolling down the window.

            “I’m sorry sir, but the State of Delaware is temporarily closed,” the officer replies, pointing to the sign.

            “Closed?”

            “Yes sir. I’m afraid so,” he says, emphasizing the sign again.
            The driver stares incredulously at the sign, at the officer, and then back at the sign. “For how long?” He asks after a pregnant pause.

            “We’re not sure. A few hours. Maybe more. Could you come back?”

            “Come back? What do you mean ‘come back’? I’ve got family in there!” he says, trying not to let his voice betray frustration.

            “I’m sorry sir, but the State is closed,” the officer repeats in a measured bureaucratic tone polished by years of patient practice. The verbal volleys continue until the “officer,” also known as Alan Funt, creator of the original TV reality show (which catches unsuspecting individuals in compromising situations), finally says, “Smile, you’re on Candid Camera!”

            This Candid Camera segment illustrates the power of the written word. When combined with the appearance of authority—in this case a man in uniform with a clipboard, a squad car, and a set of traffic cones—the word closed created expectations that brought cars to a standstill.

The Role of Writing and Apparent Authority

Businesses cloak their employees with the appearance of authority in many ways. They give them business cards to identify their business affiliation. They let them use business letterhead to write correspondence. They program their fax machines to print the company name on the top line of every fax page sent. They assign e-mail addresses incorporating the company’s name. Some even provide their employees with company cars or trucks to drive and expense accounts for business travel and entertainment. To outsiders, employees’ trappings of authority confer credibility on their words and deeds. Indeed, this apparent authority literally transforms them into their employers.

            In legal terms, employees are agents of their employer. They speak and act on behalf of their organization. As a result, everything they say and do in their job capacity reflects on their employer and can create legal liability for their organization. From a strategic perspective, the cause-and-effect relationship between employee actions and corporate consequences means that all employees are individual gatekeepers of their organization’s legal liability. They can create liability, or they can mitigate it.

            The business documents employees write have added legal significance. Unlike human memories that can fade, documents are tangible evidence that live in computer memories and conventional paper files. Once they are created they have a life of their own, one whose end is by no means certain. They can come back to haunt the company unless they are managed well during their life cycle. Unfortunately, most employees don’t appreciate the pivotal role they play in a document’s life cycle or the role documents play in protecting their company’s legal health. This lack of awareness can turn business documents into wild cards.

            We create more documents than we often realize. Sure, we write memos and reports, but we also write comments on the memos and reports we receive, and we underline, circle, highlight, and jot notes in the margins. We keep diaries, fill out forms, and respond to a slew of electronic messages. We might even scribble numbers or designs on a paper napkin or paper place mat while at lunch, a scrap of construction material while at a work site, on a sticky note, or any other portable writing surface that is later placed into the file. Over time, that adds up to a lot of words and a lot of evidence. Some of it is helpful; some of it is not.

            The informality and the familiarity of routine writing create a comfort zone that causes us to lower our guard and be less careful about how we express ourselves. Stress, fatigue, and reflex reactions only exacerbate the problem, causing us to write things we may later regret. In the process, seemingly innocent documents get stored in hard files and hard drives only to resurface at a later date in a lawsuit, causing more heartburn than a bad burrito. As Intel’s then-CEO Andy Grove put it, “It is entirely possible that when your actions and your heart are both in the right place, one document written in annoyance can outweigh mountains of evidence about your actions, principles and practices.” . . .