It’s a great marketing tool, but it’s also a source of significant risk.
For most companies, social media is a cheap, effective marketing tool, which is easy to access, manipulate and maintain. But social media traits that benefit companies can also expose them to a myriad of legal risks.
* Ensuring Your Company Owns and Controls its Social Media Accounts–Some companies entrust their social media accounts to an employee or third-party who has marketing and/or technological savvy. Some even advertise through these individuals’ personal social media accounts. Even if this individual executes an agreement requiring return of all confidential information and marketing tools upon leaving the company, or consents to use of their personal account(s), these arrangements leave a company legally vulnerable. Avoid advertising through personal social media accounts. This arrangement can expose companies to violation of privacy claims under the federal Stored Communications Act. Also, provide multiple trusted employees access to company-operated social media accounts and change usernames and passwords when employees with access to these accounts leave the company.
* Securing Your Company from Attacks Through Social Media–Social media use invites security risks, including phishing scams, malware attacks and other viruses, which can expose confidential information and/or cripple computer systems. Consider coordinating with an IT specialist to ensure proper technology is installed to protect against security attacks and ensure your trusted employees, who can access the social media accounts, are fully educated regarding established protocols (e.g. social media usage, or detection of harmful links or accounts), which protect company network(s).
* Monitoring Social Media Endorsements–Companies routinely seek endorsements by inviting individuals or entities to comment on a product or service. Be aware that the Federal Trade Commission monitors company endorsements and has made clear that companies who do not monitor their endorsements could face an enforcement action. Generally speaking, company endorsements are regulated and must contain a disclosure to the public. Thus, if the endorser was paid or given anything of value, they should disclose that the endorsement is a paid promotion.
* Safeguarding Confidential Information–Those accessing company or personal social media accounts could knowingly or unknowingly disclose confidential information, such as trade secrets, customer lists, new product lines or a company merger ahead of the official announcement. Such disclosures can have negative consequences for businesses, such as loss of intellectual property rights, advantages by competitors, and potential litigation exposure. A carefully worded confidentiality policy, which clearly defines confidential information, can help safeguard against such risks.
* Ensuring Social Media Policies Do Not Run Afoul of Employment Laws and Regulation–Company social media policies often contain rules regarding discrimination and harassment, personal conduct, confidentiality, and expression of personal opinions versus comments on behalf of the company when using social media. Poorly written rules could expose the employer to unfair labor practice claims. The National Labor Relations Board actively litigates cases involving social media policies and has found social media policies unlawful that are overbroad because they discouraged or could be interpreted to discourage lawful employee conversations about common workplace issues that are protected by the National Labor Relations Act.
Employers should also avoid accessing social media to screen applicants. When reviewing an applicant’s social media public profiles or accounts, employers obtain information that should not be used in the screening process, such as an applicant’s pregnancy, race, religion, ethnicity, and age and/or family relationships. Mere knowledge of this information exposes employers to claims that the applicant was not hired because of this protected class information. Consequently, avoid screening social media profiles until a candidate has made it through an initial round of interviews.
Shelbie J. Byers and Marc A. W. Stearns are attorneys with the law firm Drewry Simmons Vornehm LLP.
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