Disruptive Public and Shareholder Protests: Recognizing Lawful and Unlawful Conduct and Managing Company Liability

NOTICE: This commentary is for general education purposes only and is not intended as legal advice. Readers in need of legal advice should consult with competent legal counsel.   

There is a public demonstration on the sidewalks and plaza outside the shareholders meeting. An emotional speaker on a megaphone is calling for sweeping changes as he leads a small breakaway group of activists, some wearing shareholder badges, who are defiantly chanting and carrying signs as they walk towards the security staffed meeting entrance. A confrontation is brewing. The media is watching. Several persons are video recording on cellphones.  

At times public demonstrations appear inseparably interwoven with private shareholder protests. Outside, non-shareholders and activist shareholders are calling for public policy changes. Inside activist shareholders are advocating for similar changes in short term company policies that create excessive wealth for a few, devalue human and worker dignity, and degrade the environment.

Activists are passionate. They are deeply committed to change the practices they perceive to be wrongful. They understand the value organizational reputation and power of public perception. They are highly motivated to attract and leverage public opinion to force governments and businesses to change today.

Security directors cannot overlook the willingness of some activists to engage in passive (e.g., sit-ins) and/or overt conduct intended to force a security and/or law enforcement response. It is both strategy and tactic. It can be a powerfully persuasive gambit in a digital world if the responses are perceived by the public to be heavy-handed.  

Where are the lines for activists and officers between lawful and unlawful conduct? How can the company manage this liability?

Freedom of Expression

The 1st Amendment of the U.S. Constitution provides: "Congress shall make no law ... abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances." The courts have extended freedom of expression to the states by application of the 14th amendment prohibitions: "No state shall make or enforce any law which shall abridge the privileges or immunities of citizens ... nor deny to any person within its jurisdiction the equal protection of the laws."

Freedom of expression is a fundamental, but not absolute, right of the people. The inciting of violence is not protected free speech. Nor are all government properties public forums. However, sidewalks, plazas, parks and similar areas historically used for public pronouncements and debates are protected traditional public forums. The government may regulate freedom of expression in traditional public forums as to time, place and manner of conduct. The regulations must be for compelling government interest (e.g., public safety), narrow in scope, and viewpoint neutral. (An excellent general resource: http://www.law.cornell.edu/anncon/html/amdt1toc_user.html)

The public's right of freedom of expression in traditional public forums does not translate into a right to block access, enter upon private or other public property, and/or to disrupt the use of the property for its intended purposes. Such conduct is potentially criminal in nature.

Activist Criminal Conduct

While state statutory language differs, criminal trespass and disorderly conduct are probably the most frequent offenses committed by activist shareholders. Vandalism and resisting arrest are issues too. More serious offenses are wanton endangerment, and assault and battery.

Proof of a criminal trespass generally requires notice by the owner or representative, and/or signage that says the property is private or restricted, that the individual cannot enter or remain, and is given reasonable opportunity to depart. Disorderly conduct refers to a range of behaviors disruptive of the public peace and peaceful enjoyment of property.

A company may restrict access to a shareholders meeting held on company property. Similarly, a hotel or conference center may restrict public access, however, common areas such as lobbies and restaurants are often kept open to the public for the intended use. Protestors who knowingly without authorization attempt to enter or remain in restricted areas, or who have authorized access but become disruptive in common areas OR IN shareholders meetings, may be subject to arrest and removal for trespass and/or disorderly conduct.  

Protestors who deface or destroy property may be subject to arrest for criminal vandalism. Those who recklessly throw dangerous objects may face charges for wanton endangerment. Criminal assault and battery claims may be filed against protestors who grab, hit or throw objects at others; and those who resist lawful arrest may be subject to resisting arrest charges.

Legal Risks for Security Professionals

Most lawsuits filed against security officers are tort claims under state law. Whereas a crime is an offense against the public, a tort is a civil violation against the personal and/or property rights of another who may seek judicial relief. Officers are at heightened risk when using force and making private party (i.e., citizen) arrests. Note, a few torts and crimes share the same or similar names.

A tortuous assault occurs when one party intentionally creates a reasonable apprehension in the mind of another of an imminent battery. Battery is an intentional touching of another that is highly offensive to a reasonable person. An officer who uses excessive force to block a protestor from entering or to remove a vocally disruptive activist shareholder may be sued for assault and battery. An infliction of emotional distress claim might be made if the officer's conduct is outrageous and highly likely to inflict distress upon another, e.g., repeatedly hitting another.

False arrest is arrest without sufficient probable cause for a reasonable person to believe the suspect committed a crime. False imprisonment occurs when one party without justification denies another voluntary freedom of movement. Malicious prosecution requires proof that a party with malice and without probable cause initiated a criminal proceeding that was terminated in favor of the accused. A security officer who without further inquiry forcefully grabs and detains for trespass a known activist shareholder who was not being disruptive may face a lawsuit for assault, battery, and false imprisonment. If he arrests the activist shareholder, the officer may also face false arrest and malicious prosecution claims if the criminal charge is dismissed with prejudice (i.e., cannot be re-filed).  

When officers are sued, security managers are at risk of being sued for negligent training and negligent supervision for failing to assure the officers competently performed their duties. Managers may also be sued for negligent security for failing to provide overall reasonable protection if innocent parties are injured.

At a security checkpoint, a shareholder may claim a frisk by an officer of the opposite sex was a highly offensive intrusion upon privacy. An individual wearing a colostomy pouch might claim publication of a private fact if verbally coerced to show the pouch in an open versus private screening area.

Managing Company Liability

According to risk management theory, risks may be retained, reduced and/or transferred. These are the same options for managing security liabilities.

The legal doctrine of "respondeat superior" holds that a company may be held vicariously liable for the intentional and negligent conduct of its employees committed within the scope of employment. By deploying its officers the company retains liability.  It can reduce this risk by providing officers supervision and training on their authority and protocols for using force and making private party arrests. It can transfer some risk by obtaining insurance, however, intentional harms caused by the insured (e.g., assault) are frequently excluded from coverage.

A company can transfer liability by outsourcing security. Under the independent contractor rule a company is not liable for acts of an independent contractor and its employees. There are exceptions if a company reserves or exercises too much control over the security provider's officers. Also, companies today prefer to allocate liability risks in the contract for services. Minimum insurance requirements with named beneficiary; indemnification for losses suffered; and hold harmless for injuries caused are typical topics addressed.

Another transfer option is to directly pay a city for supplemental police coverage to handle disruptive persons. A company reduces liability exposure when the city assigns and supervises the officers who are trained to follow police protocols. Another benefit, if injured the officers are more likely to be covered by the city's workers compensation. When a company directly retains the services of police officers the issues of insurance coverage and whether they are acting as police officers and/or agents of the company may be more open for review by the courts.

In conclusion, public demonstrations and shareholder protests raise reputational and legal risks. Security directors should in consultation with legal counsel develop shareholder meeting security plans in advance long before the activists are approaching the entrance.

Disruptive Public and Shareholder Protests - Recognizing Lawful and Unlawful Conduct and Managing Company Liability

Norman Spain, J.D., is Professor of Safety, Security and Emergency Management at Eastern Kentucky University.