The following piece was originally published by the Women’s White Collar Defense Association. We are often asked by clients and their counsel how to communicate around legal issues that have the potential to—or already have—caused reputational harm. The answer can be complicated, particularly in white collar matters when an indictment may be imminent or has already been filed, because the most important audiences are prosecutors, judges, and juries. Although there is no “one size fits all” solution and many situation-specific variables come into play, there are some guiding principles and high-level considerations that inform how we advise our clients. 1. Align legal and communications strategies First and foremost, all communication strategies must align with and complement the legal strategy. While that may argue for communicating only via legal filings, that is not always an acceptable option for clients who feel the need to communicate with their stakeholders—including employees, customers, investors, and the media—is a reputational imperative. In these matters, we recommend developing a fact-driven core narrative in consultation with the client and legal counsel. The goal is to develop and disseminate consistent messaging that protects reputation and value but does not compromise the legal strategy. 2. Do no harm Doing no harm can mean many things. In white collar matters, it means not saying anything that could antagonize prosecutors and/or the presiding judge, such as appearing to be litigating the case in the press. It also means not saying anything publicly that could be used against the client or open a new line of discovery. It is also critical not to get ahead of the facts, which is especially relevant when a matter becomes public before all the facts are known. Credibility is key, and over-communicating or communicating prematurely can end up exacerbating an already bad situation. Clients that are forced to backtrack and correct erroneous facts they’ve stated publicly lose credibility and trust, both of which are difficult to regain. 3. Calibrate media strategy It is similarly important to avoid inviting attention where none exists. Whether and how to engage with the media about a white collar matter is situation-specific and depends on the facts of the case, the profile of the client, legal strategy, and timing, among other factors. If a decision is made to communicate proactively, reactively, or both, there are a range of ways to either seed or combat false narratives that involve varying degrees of attributability to a client and/or counsel. As an alternative or supplement to an on-the-record statement, key reporters and editors can be briefed on background or off-the-record. These are effective ways to help ensure that the client’s side of the story is presented accurately and persuasively. 4. Be prepared In white collar matters, planning for the different scenarios that may unfold—including the possibility of a leak—is crucial. Once potential scenarios are identified and the legal and PR strategies are aligned, messaging should be created for each scenario with the understanding that it may need to be modified or calibrated based on how the matter unfolds. Having foundational messaging in place ahead of time prepares clients to navigate new developments swiftly and strategically. Unless a decision has been made to stay silent, we always want a client to be prepared to respond and avoid a situation in which a story is published without the client’s side of the story being told. The best way to appropriately balance legal and reputational priorities in white collar matters is through a bespoke, tailored communications strategy guided by these principles and executed in lockstep with legal counsel. To learn more about August’s litigation and investigations communications services, please contact our professionals.

Fallout from last month’s catastrophic IT outage has spiraled into a dramatic, finger-pointing spectacle between Delta Air Lines, CrowdStrike, and Microsoft, complete with public legal threats and dueling demand letters.  This post discusses Delta’s communications strategy and lessons that can be learned as the airline contends with $500 million in losses, reputational damage, and lingering questions about its slow recovery from the IT disruption. Shots Fired The accusations began when Bastian appeared on CNBC on July 31 to discuss the incident and not-so-subtly preview legal action against CrowdStrike and Microsoft. Bastian reiterated the company’s apology to customers and briefly acknowledged Delta’s commitment to rethinking its operations systems to mitigate future risk. But instead of further detailing Delta’s plans to strengthen its IT infrastructure and digital resilience, he then began playing the blame game, framing this incident as a call to “[make] sure big tech is responsible” and citing tech companies’ “crazy valuations” to suggest that the incident was a consequence of prioritizing growth over delivering exceptional service. Bastian concluded that Delta has no choice but to sue for damages, stating: “We have to protect our shareholders. We have to protect our customers, our employees, for the damage, not just to the cost of it, but to the brand, the reputational damage.” A few days later, both CrowdStrike and Microsoft responded to Delta’s threats via publicized legal letters, claiming that Delta turned down or ignored repeated offers for assistance throughout the outage. The companies accused Delta of putting forth a misleading narrative that misplaces blame for Delta’s own IT decisions and response to the outage and failing to take responsibility for its actions. What We Can Learn While this situation will likely play out over time, there are lessons that we can take away from Bastian’s flawed communications approach. Lesson #1: When it comes to high-profile lawsuits, the juice may not always be worth the squeeze:  Delta’s decision to threaten legal action on live television may have satisfied certain stakeholders, but others are unlikely to respond favorably to his placing of blame on others considering how painfully slow Delta’s recovery has been. This strategy also provided fodder for CrowdStrike and Microsoft to publicly attack Delta and prolonged a negative news cycle, setting the stage for a very public, expensive, and distracting legal fight.   The Takeaway:Companies should consider their reputations when determining whether to pursue legal action and any related communications strategy. Stakeholders expect accountability when things go wrong, but pursuing litigation that squarely blames another party precludes companies from shouldering any responsibility. Entering into highly publicized litigation may not be worthwhile if it will drag your company through the mud, erode stakeholder confidence in the process, and destroy long-term value – possibly more value than can be gained from a successful litigation outcome. Lesson #2: Take the long view: The strength of Delta’s legal arguments remains to be seen. However, Delta’s hardline narrative – that CrowdStrike and Microsoft bear full responsibility for its extended service meltdown – offers little margin for error and could undermine the airline’s credibility if information later emerges through discovery or the Department of Transportation’s federal investigation showing that Delta was partially or completely at fault for the slow recovery. For example, the vendors’ claims about Delta’s outdated IT infrastructure and refusal to accept assistance have already begun to seed doubt about Delta’s claims in the court of public opinion. The Takeaway:The truth will almost always come out, especially in litigation – and as a result, it’s important that companies stick to known facts and avoid overly firm, stubborn stances that may easily be refuted and damage credibility in the long run. To manage this risk when the facts are in flux, focus on the fix not the fault.

What we can learn from adidas’ response to Ye’s antisemitic rampage Adidas’ silence following antisemitic hate speech by Ye, formerly known as Kanye West, was the subject of significant and protracted media attention, snarky memes, and public scrutiny. By the time adidas issued its long-awaited statement and severed ties with Ye, the company had already suffered meaningful damage to its brand, reputation, and value, making for an instructive case study on why timing is crucial and every word matters. What Happened? On October 6, adidas put its Yeezy partnership on review just days following Ye’s use of “White Lives Matter” shirts during Paris Fashion Week, affirming that it would “continue to comanage the current product during this period.” Days later, the company was notably silent when Ye began to spread antisemitic hate on social media and in media interviews. In an October 16th podcast interview, the rapper even boasted: “I can say anti-Semitic things, and Adidas can’t drop me. Now what? Now what?” (this episode has since been taken down). For more than a week, adidas proved him right. Despite the ongoing controversy, the company released a new color-way for a sneaker in Ye’s eponymous Yeezy shoe line on October 23, two days before the company formally terminated the partnership, signaling – at best – a lack of coordination and alignment within the business and – at worst – intentional indifference to Ye’s hateful and dangerous statements. Legal, operational, and financial considerations likely constrained the speed at which adidas took action – particularly given the company’s tenuous financial situation; however, the significant delay suggests that the company did not have contingency plans in place for executing and communicating a separation from Ye – which is surprising and arguably irresponsible given the importance of the partnership to adidas’ business and Ye’s demonstrated volatility and penchant for unhinged, often offensive, public statements. It’s worth noting that the company faced uniquely high expectations to decry antisemitism immediately and unconditionally given its historical links to the Nazi Party. The company’s troubled past gave it all the more reason to affirm its values and attempt to undermine residual association between the company and antisemitism. More than two weeks after Ye began his antisemitic tirade, adidas finally took a stand – but only after: Too Little Too Late? The company released the following statement on October 25th: By waiting so long to comment or take action, and despite whatever careful consideration and “thorough review” adidas claims to have undertaken, the company unintentionally put itself in an unwinnable situation. The damage was done long before it made a statement, and even a world class response couldn’t have completely undone the reputational harm the company had already incurred by delaying comment for such an extended period. That said, a credible and authentic statement that took ownership of its missteps could have helped adidas save face and lay the groundwork necessary to begin repairing its image. Unfortunately, their statement fell short in a few key ways.   What Didn’t Work “Immediately” The headline and body of the response state that the partnership was terminated “immediately,” an ironic framing for a company who was so widely criticized for its weeks-long silence. Instead of writing what was likely meant here, “effective immediately,” adidas made a glaring misstatement that signaled a lack of contextual awareness. “Does not tolerate” adidas also claimed that it “does not tolerate antisemitism and any other sort of hate speech,” and this is a strong and compelling message – if it’s true. But what do the company’s more than two weeks of silence represent, if not toleration of West’s behavior? When an organization states its values and claims to have zero tolerance policies for violations of those values, it must be prepared to follow through on its promises swiftly and decisively to maintain its credibility. The company also cited a “thorough review” that informed its decision to cut ties with Ye. But why – if Ye publicly, flagrantly, and repeatedly violated the company’s stated values of “diversity and inclusion, mutual respect and fairness” – did this decision require a thorough review And how does one reconcile this with the fact that the company “does not tolerate” hateful language or antisemitism? Conducting a “thorough review” is admittedly commonplace and typically considered a best practice when a company is determining how to respond to a crisis, but when an individual’s transgressions are so public and hateful – to the degree that almost no amount of context could possibly justify them – the benefits of acting quickly far outweigh anything that a detailed review might yield. Since there shouldn’t have been much else for the company to consider with regards to Ye’s actions, adidas’ “thorough review” language – taken together with its reference to its decision’s supposedly limited financial impact – suggests that the adidas team probably wasn’t just closely reviewing the rapper’s conduct during that period. We can only speculate, but the way the statement is framed makes it sound as though adidas may have been waiting to see the full extent of the blowback so it could more accurately weigh the business cost of severing ties with Ye against the ethical costs – raising significant questions about the authenticity of its supposed commitment to its stated values. As a whole, the statement leaves us wondering: What We Can Learn While it remains to be seen whether the damage to adidas’ reputation will endure, there are a number of lessons that other organizations can learn from this situation: A number of companies and organizations still have yet to cut ties with Ye – namely, major music streaming services – and are facing mounting pressure to do so. While some have commented on the situation or taken limited action, they should bear the above recommendations in mind when charting their paths forward.