Industry
Conferences, Trade Fairs, and other Business Events: Attendance of
Employees and Employers
by Bruce Leonard Beal, Esq.
Attendance at industry conferences, trade fairs,
and other business events can be rewarding to both employees and
employers. These events
provide buying/selling opportunities and a learning environment where
employees may learn about market conditions, industry product standards,
potential vendors and customers, and promotional ideas.
Employers should also know that there are
substantial risks involved in having employees attend these events. Reasonable risk management tools are available to minimize
these risks.
Risks increase when alcohol is added to the mix.
Since alcohol impairs judgment and decreases inhibitions,
employees are more likely to discuss items which cross over into the
risk areas, below. As a
consequence, only trusted employees should attend these events, and firm
policies regarding the consumption of alcohol should be implemented.
To give you some perspective on the risks, some
firms have a policy against their employees attending these events.
While this might protect the firm, with the development of proper
policies, a firm may also avail itself of the benefits, while minimizing
the risks, of attending such events.
The remainder of this article briefly describes the
risks and the policies that should be put in place to minimize these
risks. Any employee who is
scheduled to attend a convention or similar event for the first time
should be made aware of these risks and policies.
Antitrust laws were established to promote and
protect competition. Activities
that limit competition in a market may violate the law and may expose
firms to civil and criminal liability and penalties, including monetary
damages, fines and even imprisonment.
Antitrust laws can be violated on the golf course, as well as
over the desk telephone.
Activities that may be prohibited by the antitrust
laws include price fixing, bid rigging,
dividing markets, boycotts, tying agreements, exclusive dealing, refusal
to deal, joint purchasing, reciprocal dealing, and exchanging
competitively sensitive information that is not publicly available with
competitors. More detailed
discussions of these actions may be obtained from corporate counsel.
From a policy
standpoint, your employees should not, without legal advice, discuss
prices, terms, costs, territories, marketing plans or other competitive
information with competitors or groups of suppliers, discuss strategic
partnerships or similar with competitors, or condition your firm’s
purchases from a supplier on an agreement to buy your firm’s products.
Conflicts of interest arise between a firm and its
employees, when an employee has a personal interest in a corporate
transaction. This most
often occurs when employees receive gifts from vendors and customers and
is quite common at these events.
From a policy standpoint, employees should not give
or accept gifts or anything of value that improperly influences or
appears to influence a business decision.
Common exceptions are hospitality and small value gifts that are
customary and proper under the circumstances, if not repetitive, nor
place the employee under any obligation.
Proprietary information is confidential and
valuable business information. Trade
secrets, such as the formula for Coca-Cola, are perfect examples.
Disclosure of proprietary information to competitors is very
damaging. Events are
perfect forums for unintentional disclosure of such information,
especially when alcohol and bragging rights are involved.
Your firm should already have in place policies for
protection of proprietary information, including use of nondisclosure
agreements signed by employees possessing such information.
Employees going to events for the first time should be reminded
of such policies and/or agreements and perhaps should sign a
nondisclosure agreement, if not signed previously.
Losses of employees occur at such events, which
provide an ideal forum for competitors to offer employment. California law invalidates non-compete agreements, which
prohibit an employee from working for a competitor, unless necessary to
protect your trade secrets and reasonably limited in time and scope.
Legal advice in these regards is indicated.
Send only trusted, loyal employees to conventions, if they are
indispensable to your firm.
Commercial defamation and trade disparagement arise
when false or misleading factual representations are made about the
nature, characteristics or qualities of a competitor’s products or
services. When this occurs,
a competitor might consider bringing a claim against your employee and
firm. Violations, if
proven, would entitle your competitor to your profits and its damages,
costs of the action, and up to treble damages.
Conventions are fertile grounds for
misrepresentations to vendors and customers about competitors in the
push to sell products and services.
Since truth is always an absolute defense, employees going to
conventions for the first time should be counseled to always be truthful
in factual representations concerning other competitors.
While opinions are not subject to the same liability, the
distinction between facts and opinion need to be clearly understood.
Personal injuries may occur at these events.
If your employee attends and injures someone, whether consuming
alcohol or not, and your firm may be liable for any tortious act
committed by your employee acting within the “scope of employment”.
Employee attendance at a business event is usually
within the scope of employment, unless an employee leaves the event
premises and pursues purely personal matters.
Between these two extremes lies a large grey area into which
judges and juries inquire and decide.
Workers compensation may apply at events, when an
employee sustains injury or death, if it is “within the scope of
employment”; however, your firm has no liability, if the proximate
cause of the injury or death is alcohol or drug intoxication.
From a policy standpoint, your firm may want to
implement an alcohol policy, ranging from prohibition of alcohol during
events to requiring consumption of food while drinking and limiting the
number of drinks.
In summary, if your firm sends employees to outside
business events, it should have appropriate policies in effect.
Employees attending events for the first time should be first
counseled in the risks and policies, and any related agreements signed.
Send only trusted and loyal employees.
Caveat:
The purpose of this article is to provide information, rather than
advice or opinion. It is accurate to the best of my knowledge as of the
date of the article. I have no duty to update this article. The
information, examples and suggestions presented in this article have
been developed from sources believed to be reliable. This article should
not be viewed as a substitute for the guidance and recommendations of a
retained professional and should not be construed as legal or other
professional advice. In addition, I do not endorse any actions addressed
herein, unless they are produced or created by me. I recommend
consultation with me or other competent legal counsel and/or other
professional advisors before applying this material to any particular
factual situations.
