The Costs of Free Speech and Silence for Businesses. By: Peter D. Singh, Jr.
Recent events have sparked controversy and outrage. From police brutality to protests to rioting, how can businesses navigate these trying times without widening the divide? Should coworkers even discuss such burning hot topics? Some storefronts are being destroyed during demonstrations, forcing owners to confront complex and divisive issues. Even if your office building is not in harm's way, it is important to respond to these challenges and to do so in a way that shows you care about your community, if you do. Silence may be louder and say more to people than you’d think. As lawyers, we care deeply about justice, and as business lawyers, we know that you have to weigh the costs and benefits.
Big brands down to individual influencers have to consider whether and how to use this influence. Corporations are supposed to maximize profits for shareholders. That said, the value of any dollar only goes as far as our faith in the economy and our broader social compacts, systems, and structures. In the eyes of the law, companies are people. They enter contracts, pay taxes, own property, and operate as part of this society. This personhood comes with rights and responsibilities. Every entity should be mindful of the messages it sends through what it says and what it doesn't. What may seem like none of your business could very well be.
Speech by business is layered – there is commercial speech and political speech by the business, as a unit, then there's workplace or associated speech by the people that are part of the organization. Any communication on behalf of the business or even conversation between coworkers could have an effect on the workplace culture, public perception, and reputation of the company. These could be official or unofficial statements with intended or unintended consequences. Every relationship has its differences and challenges, but communication is key. Here is an introduction to the legal and corporate frameworks for each type of speech and regulation, and ways to think through what, when, and how to say anything about anything besides your products or services. (skip the con law lesson with TL;DR link to Human Resources section)
When it comes to any discussion about free speech and First Amendment rights, what we're talking about is whether the government can censor/restrict or censure/punish something said. Public/people can always use spending, posting, or any number of ways to hurt business if they see a reason. We'll address the constitutional law here as well as the psychology and sociology you should consider when deciding whether to speak up or shut up.
Non-commercial speech, like words from an individual on a soapbox or protestors in the street, gets full protection under constitutional law. The government can only regulate that type of speech if there’s a compelling state interest to do so. In other words, the rule has to be essential or necessary instead of a choice, preference, or discretion. This is called strict scrutiny and it requires the most narrowly tailored approach to achieve an end that we can't do without. National security, military necessity, and public health and safety, including protection against violent crime, are all established examples of compelling interests. They say you can't yell “fire” and cause panic in a crowded theater, unless there is a blaze, and this is why.
Commercial speech refers to anything that proposes a transaction, including advertising products and services. If the speaker is an enterprise, the audience has potential customers, and the message is about the goods, then it is likely that a message will be considered commercial speech, which gets less protection from regulation than political or cultural speech would. The reason this is worth mentioning here is that many companies will try to use social issues to appeal to certain people or stay relevant. Tone-deaf advertising like the since-pulled Pepsi ad about peaceful protest can do more harm than good. By trying to ride a wave or capitalize on momentum, a brand might face backlash instead. The lesson here is not to shy away from conflict, but to make sure you understand what you’re saying with your text, subtext, and context.
There is limited constitutional protection for businesses and representatives to say anything to the public that isn’t misleading. The government can flatly ban speech that is deceptive or fraudulent. The state has to justify restrictions on anything else like offensive, profane, obscene, derogatory, or discriminatory language. There is a two-part test that courts use to (1) determine whether the commercial message is false, misleading, or related to unlawful/illegal activity, and (2) show that a challenged law both furthers a substantial state interest and does so in a way that directly fits the interest. Courts use what’s called intermediate scrutiny to analyze whether the government can regulate what businesses say about the business. Commercial speech restrictions have to be content-neutral and applied equally to different viewpoints.
Here are some examples of government restrictions on commercial advertising that did not pass the tests and had to be abolished. A state tried to stop a liquor store from advertising the price of alcohol outside the store (the “restriction”) to promote temperament (the “interest”), but the court decided that the restriction was not directly advancing that interest. A law requiring mushroom growers to pay for funding generic mushroom industry advertising was struck down as a form of compelled speech that wasn't supported by a substantial interest, unlike mandatory disclosures or safety warnings and labeling requirements.
Commercial advertising is regulated at the federal, state and local levels. Organizations like the Federal Trade Commission (FTC), Federal Communications Commission (FCC), and Food and Drug Administration (FDA) regulate commercial advertising for certain kinds of products or services. Cities and counties may restrict methods of advertising to minimize annoyance for residents with guidelines for content-neutral time, manner, and place restrictions. Self-regulation, news media coverage, consumer reports, and consumer protections are all backstops against deceptive trade practices. With this framework, telling the truth in advertising is important. Be clear.
As odd as it sounds, not all commercials are commercial. Advertising can be political or cultural instead, and these messages get full protection from regulation. Political speech is the way a business can speak to matters of concern with spending or statements. Strict scrutiny applies here, so the government would have to have one of those more compelling reasons to regulate political speech by any speaker, including a business. Campaign contributions, impact investments, charitable donations, scholarships, and other initiatives are other ways that a company can put its money where its mouth is, so to speak.
Corporations can contribute to political parties or campaigns that align with values, as well as charities or other social organizations, leaving aside whether lobbying and contributions are an undue influence on politics. Even religious liberties have been extended to corporations, for example allowing a company to exclude contraceptive coverage in health plans since that violated the owners’ religious beliefs.
What Workers Can Say
We've seen many executives fired as a result of social media posts, viral video encounters, or other interactions that might have nothing to do with products, services, or customers. Reputational harm to the person or business can result nonetheless. Freedom of speech does not mean freedom from consequences, especially in the private sector. Whether and how constitutional protections apply depends on whether a business is in the public or private sector, the type of speech, and a person's position.
Any harassing, threatening, discriminating, or other unlawful conduct is not a good look. Employees in the private sector do not have First Amendment constitutional protection from employers for speech in the workplace or even outside of it on social media, in the press, or casual conversation. Employers can distance themselves and discipline, terminate, or retaliate against employees for what they say, subject to limits of anti-discrimination laws, anti-harrassment policies, and whistle blower protections.
Polarizing issues can make people uncomfortable. It is important to either have a safe space for these conversations where people can learn from one another, or to steer clear entirely. Where many err is allowing water cooler conversations to boil over. Having a hostile work environment doesn't usually happen on purpose – it's when left unchecked.
The National Labor Relations Board (NLRB) enforces the National Labor Relations Act (NLRA). Some speech and conduct by employees is protected, but it's less likely to be if it interferes with the business. Employees should be able to express their own religious or other beliefs, even if they differ from the employer’s or their coworkers’. The NLRB continuously develops guidance on disciplining employees for electronic communications and developing employment policies that limit employees’ means of communicating electronically without going too far and impinging on their freedoms.
Human Resources (emphasis added)
Corporate culture is reflected in the dress code, hours, benefits, and constitution of your workforce. Whether that happens organically or intentionally, it happens. Diversity and inclusion are widely heralded as good core values for businesses from a moral standpoint down to the bottom line. Having the best and brightest minds from all walks of life provides perspective and breeds innovation. Beyond recruiting and hiring diverse talent, though, there has to be an effort to make people feel included like they are in the fold, at the table, and more than tokens or stats. Think about whether every member of your workforce feels acknowledged, heard, supported, motivated, and understood, or whether people may be marginalized. Sometimes, it takes an extra step or two to peel back layers of perspective or privilege, but it’s worth it to show care and awareness.
For instance, for most people, conversations about rioting and looting may seem simple. Theft and destruction are wrong, full stop. Just speaking to property damage can be interpreted as overlooking the tears cried, blood spilled, and lives lost to lead to protests; seeing past the instigation of violence by authorities and anarchists; not appreciating the frustration of people that wish they could trust police, courts, and neighbors to look out for their interests, but can’t.
Everyone in an organization may not agree on an approach, but understand that no response is a response. It would be distracting to deal with every story or topic in the news, but there is a moving target and threshold where the proverbial elephant enters the room. If something is top of mind or on the tip of everyone's tongues, it is best to get informed and figure out what to say about it.
Consumers want to know the stances and values of the businesses they support with dollars. Without pandering, show your people that you value them. Whether they’re working for you or coming to you for what they need, make sure there’s a sense of mutual respect.
Be measured with the intent of what you say and the impact (intended and unintended) on people that get the message – you want to leave as little room for misunderstanding as possible so people don’t get the message wrong.
Remember text, subtext, and context carry their own meanings. Re-read what you write with a different lens each time to refine your message.
Have someone outside your organization and demographic read what you write to weed out any unintended message that could be latent or triggering.
Run statements by the people and departments that will need to deal with the aftermath so they're prepared. Managing your social strategy means being aware of things like calls to action or moments of silence, so you can recognize what’s going on, what’s appropriate and react in a timely fashion. Your digital voice and presence could be seen as tone-deaf or insensitive if you just proceed with regularly scheduled programming.
If you hesitate, let people know it's not for lack of caring or trying, but acknowledge the sense of urgency and commit to doing better.
Don't be afraid to say “I don't know” if you don't, as long as you're trying to do the work to be informed and take action. If you're on the internet to share a thought, you can use the very same internet to do some research and be even more thoughtful.
Make diversity and inclusion a fundamental part of your business model, but don’t stop there. Retention and promotion make all the difference.
Don’t accidentally ask someone to speak for their entire race, class, or kind. Groups are not monolithic.
If you hold certain values, say so simply and without exception. Be as intentional with your messaging regarding social issues as you would with brand messaging – people will pick up on inconstancy.
Consider co-owners, coworkers, customers, vendors, and even people that may never do business with you.
As a business, donate to initiatives. This could lend legitimacy to what you say. Activism and advocacy can take different shapes and fall all along the spectrum of support.
If you need help figuring out whether or how to say something, we're here to help.
Peter D. Singh, Jr.