legal risk

Ten Things: Trade Associations and Legal Risk

One of the most interesting questions you can get as in-house counsel is this: “Hey, I am going to a meeting with some competitors tomorrow, is there anything special I should do to make sure I don’t get in trouble?”  A question like this is like a good law school exam – there is almost too much to talk about!  As most in-house counsel know, meetings between competitors can be tricky stuff and fraught with risk, both for the company and the employee.  Improper agreements between competitors (e.g., price fixing, bid rigging, dividing territory or customers) can lead to costly litigation, investigations, fines, damages (trebled), and even handcuffs and jail.  The only 100% safe route is no communications with competitors ever.  A restriction like this, however, is unlikely to win the legal department any friends at the company and is unnecessary as there are a number of situations where conversations between competitors are needed and completely appropriate.  The key is making sure the employees at your company, from the CEO on down, have a basic understand of the rules of the road for interacting with competitors and know when to contact the legal department for guidance.