Cutlip & Center's Effective Public Relations, Tenth Edition Glen Broom Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall Upper Saddle River, New Jersey All rights reserved. Cutlip & Center's Effective PUBLIC RELATIONS PART II Foundations Chapter 6 Legal Considerations Tenth Edition

Cutlip & Center's Effective Public Relations, Tenth Edition Glen Broom Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall Upper Saddle River, New Jersey All rights reserved. After studying Chapter 6, you should be able to: 1.Summarize the basic structure of law in the United States and its relevance to public relations practice. 2.Outline the major principles of the First Amendment and its protection of relevant speech, press, assembly and petitioning. 3.Describe federal regulation of protected expression in election communication, lobbying, labor-management communication, and financial public relations and investor relations. Study Guide 6-1

Cutlip & Center's Effective Public Relations, Tenth Edition Glen Broom Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall Upper Saddle River, New Jersey All rights reserved. Congress shall make no law respecting an establishment of religion,or prohibiting the free exercise thereof; or 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. First Amendment (1791) to the U.S. Constitution 6-2

Cutlip & Center's Effective Public Relations, Tenth Edition Glen Broom Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall Upper Saddle River, New Jersey All rights reserved. “Religious” rights protects those who work to “propagate the faith.” “Speech” rights include protection of “ideological” (containing ideas) expression; “symbolic” (communication without words) expression; the right to “hear”; and the right to remain silent. First Amendment Rights: 6-3

Cutlip & Center's Effective Public Relations, Tenth Edition Glen Broom Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall Upper Saddle River, New Jersey All rights reserved. “Press” rights refer to dissemination of information; they belong to all citizens, not just the media. “Assembly” rights allow people to gather together for any purpose connected with government policies or ideas. “Petition” rights allow people to question their government representatives without fear of reprisal. First Amendment Rights: 6-4

Cutlip & Center's Effective Public Relations, Tenth Edition Glen Broom Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall Upper Saddle River, New Jersey All rights reserved. The law requires all persons who work as agents of foreign governments, companies, or political parties to register within 10 days with the U.S. Attorney General. Foreign Agents Registration Act of 1938 (FARA) 6-5

Cutlip & Center's Effective Public Relations, Tenth Edition Glen Broom Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall Upper Saddle River, New Jersey All rights reserved. Lobbyists are required to register with Congress, file quarterly financial statements detailing their lobbying expenses and sources of income, and report any articles or editorials the lobbyist had caused to be published to influence legislation. Federal Regulations of Lobbying Act of

Cutlip & Center's Effective Public Relations, Tenth Edition Glen Broom Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall Upper Saddle River, New Jersey All rights reserved. The 1935 statute created the independent, federal National Labor Relations Board (NLRB) to administer laws governing relations between unions and employers in the private sector. These prohibit both unions and management from engaging in unfair labor practices. National Labor Relations Act of 1935 (Wagner Act) 6-7

Cutlip & Center's Effective Public Relations, Tenth Edition Glen Broom Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall Upper Saddle River, New Jersey All rights reserved. The 1947 act additionally requires companies and unions to enter collective bargaining negotiations with open minds and with a willingness to reach an agreement. Labor Management Relations Act of 1947 (Taft-Hartley Act) 6-8

Cutlip & Center's Effective Public Relations, Tenth Edition Glen Broom Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall Upper Saddle River, New Jersey All rights reserved. Enacted in response to the great stock market crash of 1929, the 1933 act restricts corporate communication before and during the period that new securities offerings are being registered. Security Exchange Act of

Cutlip & Center's Effective Public Relations, Tenth Edition Glen Broom Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall Upper Saddle River, New Jersey All rights reserved. Persons may not “make any untrue statement of material fact or…omit to state a material fact” that would have the effect of misleading in connection with the purchase or sale of any security. Security Exchange Act of

Cutlip & Center's Effective Public Relations, Tenth Edition Glen Broom Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall Upper Saddle River, New Jersey All rights reserved. Sarbanes-Oxley Act of 2002 Section 302: Corporate Responsibility for Financial Reports The CEO and CFO of each issuer shall prepare a statement to accompany the audit report to certify the “appropriateness of the financial statements and disclosures contained in the periodic report, and that those financial statements and disclosures fairly present, in all material respects, the operations and financial condition of the issuer.” A violation of this section must be knowing and intentional to give rise to liability. 6-11

Cutlip & Center's Effective Public Relations, Tenth Edition Glen Broom Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall Upper Saddle River, New Jersey All rights reserved. Mandates processes and safeguards to: Restore investor confidence Prevent fraud Strengthen internal control over financial reporting Establish Public Company Accounting Oversight Board (PCAOB) to police companies & auditors Sarbanes-Oxley Act of 2002 (a.k.a. “SOX”) 6-12

Cutlip & Center's Effective Public Relations, Tenth Edition Glen Broom Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall Upper Saddle River, New Jersey All rights reserved. Fundamentally changes relationship between companies and their auditors: No consulting or tax services can be provided to audit clients No advice or guidance (“collusion”) Auditor assesses controls to identify and report “significant deficiencies” and “material weaknesses” Sarbanes-Oxley Act of 2002 (a.k.a. “SOX”) 6-13

Cutlip & Center's Effective Public Relations, Tenth Edition Glen Broom Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall Upper Saddle River, New Jersey All rights reserved. 6-14