LexisNexis In-House Advisory: The Explosion In Social Media Creates New Liabilities While Broadening Companies' Opportunities

By Dylan McGuire

As the number of people using social media websites - such as Facebook®, Twitter®, blogs and more - grows exponentially, corporations are faced with a new set of challenges on how to effectively manage a new set of liabilities brought about by this new information age, as well as to effectively harness the new opportunities that it presents.

"Social media is an area where the law hasn't caught up with life," said Deborah Kelly, an attorney with Dickstein Shapiro, in an interview with the LexisNexis In-House Advisory.

"I think companies don't know yet what they're in for when employee conduct in the social media land embarrasses, demeans or disparages the company," Kelly said. Before the social media boom, companies established standards of conduct for when their employees were at work, but told employees "I don't care what you do in your spare time." said Kelly.

"But now, if you have someone who says on Facebook 'I work at Dickstein Shapiro and six of my friends and I had a great time last Friday night partying in the fourth floor conference room with the beautiful view' . . . Guess what? Even though they put it on Facebook, now the company has to do something about it, if it involves something illegal and it makes us look bad, etc.," Kelly warned.

"So I think most companies are behind the curve and we're not even sure what the curve is going to end up looking like because there are very few cases out there so far," she said.

Balance of Privacy Rights

Kelly said that the challenge for the courts is going to be to balance the privacy rights of employees against the rights of companies to be protected a host of problems including: "employee misconduct; allegations of breach of trade secrets; alleged breaches of fiduciary duty and proprietary information; harassment online; harassment through blogs; discriminatory comments; photographs; and learning about people's disabilities that they otherwise had no business to learn about because of the way it's been put out there on the online system."

Kelly said that one of the most important takeaways from recent litigation is for companies to make sure that their employees don't praise the company or its products on social media without disclosing that they work for the company.

"So, if you work for Ford and you love your Ford® car, you may want to go online and say 'Ford is the greatest car in the whole wide world'. But, unless you disclose that you work for Ford you're going to get the company in a lot of trouble. There is no way an employee would intuitively know about that," said Kelly.

Kelly, who conducts social media training sessions with companies, tells her clients that they should make sure their message to employees isn't to "shut up and never complain about anything."

"The message should be, 'We want to hear from you. We want to know if someone is engaging in discriminatory harassing conduct; if you're not being treated well; if you think your rights are being compromised; [and] here's who you tell," she said. She also suggests that companies have a good internal complaint procedure so they can stand by their word.

"My message when I do these training sessions is that companies tell employees the place to air their grievances is not in social media because you don't want to be the company that snoops all around the social media trying to find this out. Let them come tell you directly because you can't fix what you don't know," she said.

Social Media Training

Kelly also remarked that it is surprising how few companies have social media training and a clearly written social media policy in place for employees.

"When these cases come up, one of the first things the court's going to ask is what the employer told the employee-in other words where the expectation of privacy begins and ends." she said.

Another issue arises during the hiring process, since employers are not allowed to ask a potential employee's age, medical condition, marital status, and religious and political affiliation. However, all that information is readily available in Facebook profiles.

"The courts seem to be saying, if I hypothetically decide to put out there, my drinking, my drug use, or that I told my company I am disabled but I'm actually somebody that goes dancing every weekend and the company finds out about it-it's not such an invasion of my privacy. I put it out there in the world. The only trip up is that I thought I shut more doors than I did," said Kelly.

Kelly said that she prefers social media policies that are written in direct terms and not filled with legal jargon.

"We tell companies to first define the scope of the activities that are targeted so that people aren't afraid that you're going to hack into their AOL account when they go home. And then you describe what you can and can't do. There should absolutely be something in there that carves out the NLRA [National Labor Relations Act] protected activity that says nothing is intended to impinge on rights that are protected under the NLRA. Explain what happens if they misuse social media and conduct actual training on it," she said.

"Reiterate that the employees are not the company spokesperson, they cannot do anything to make themselves seem like they are, they can't attribute any information they post to the company's policy. And make sure they're not using copyright-protected material on their own social media blog just because it's something they're familiar with and work with every day," said Kelly.

Systems of Engagement

Jon Neiditz of Nelson Mullins Riley & Scarborough said that although social media does expose companies to potential liabilities it also "helps the company manage legal risks, transforms the company and undermines sclerotic hierarchies (and illegitimate ones) in ways that improve communication and compliance."

Neiditz points out that social media has replaced email as the principal mode of communication in the country and that it can help expand productivity and legal compliance within an organization. He compared the shift in communication modes and the resulting productivity to when companies went from sending paper memoranda to sending emails in the 1980s and 1990s.

"And there's really nothing you can't do more effectively with social media than with email, if it's a business goal. So, let's say you're trying to do compliance for an organization, you can do that effectively with social media," said Neiditz.

Neiditz said that the key for organizations to use social media most effectively is to set up "systems of engagement."

"The fact of the matter is that in old-style organizations there were these intranets, and the intranet broadcasts the news that someone wants you to see, maybe it's the marketing department, maybe it's the HR department ... in other words... gives you absolutely no useful information. In many companies, unless they absolutely have to, nobody goes into the intranet," said Neiditz.

"Systems of engagement are things that reach out to you. You want to participate in a system of engagement because you know that you're going to get news that is tailored to your interests," he said.

Neiditz suggested that companies create circles, or allow employees to create circles, using simple interfaces like Yammer or Jive, in which to share information with each other on things that are relevant to them.

"What I say is, if you actually think that there are people who care about the junk that you're putting on your Intranet, then let them create a circle for that... If on the other hand they happen to be people ... who are constantly probing to understand what the trends are ... you are hungry for that news from the people that you really trust to give you the news," said Neiditz.

"The idea is to try to create systems that take advantage of that energy, that opportunity," he said.

This article originally appeared in the February 2012 issue of the LexisNexis In-House Advisory.

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