Social Media Legal Risks for Businesses

Feb 11, 2013

Small businesses have rapidly adopted social media as an effective tool to increase company and product exposure, amass leads, improve search engine rankings, develop loyal customers, build better products, drive sales, and foster collaboration and innovation. 

Yet, despite the unassailable business case for social media, the legal risks associated with its use should not be ignored. The most common pitfalls confronting small business owners include:

Pre-Employment Screening:   Employers are increasingly vetting prospective employees based upon what is posted on an applicant’s Facebook page or other social networking site.  To avoid inadvertently accessing information protected under federal and state law (age, race, and religion, for example), employers should have such pages reviewed by those not involved in the decision-making process and only serve up what is lawful to consider.

Employee Privacy:  Monitoring what employees post on social media sites is advisable for a variety of reasons, including detecting whether employees are harassing or discriminating against co-workers, customers, or competitors. To avoid claims of invasion of privacy, however, employers should obtain the employee’s written consent (via a signed computer use policy, for example) for the employer to monitor all employee communications via company-owned computers, networks, and equipment. 

Employee Discipline:  While reprimanding or firing employees for comments they make in social networks may be justifiable in some circumstances, it is illegal in others. The National Labor Relations Board, the federal agency entrusted with investigating and remedying unfair labor practices (in both unionized and non-unionized workforces), has been aggressively pursuing employers for disciplining employees exercising their rights to protest the terms and conditions of their employment. As a general rule, employers should avoid adopting broad prohibitions against damaging the employer’s reputation, embarrassing the employer, or against discussing the company, its management, employees, or competitors, without first making it crystal clear that such prohibitions do not apply to the employee’s right to criticize the terms and conditions of their employment. Fortunately for employers, however, mere griping is not legally protected, leaving employers free to discipline employees for rude, offensive, malicious, threatening, or harassing comments posted online, particularly those which are unrelated to improving working conditions.  In other words, gripes designed solely to embarrass or harass a co-worker or supervisor and which are unrelated to the terms and conditions of employment are generally not protected; whereas legitimate grievances (even those that contain foul language or language unfavorable to the company or its management) are generally shielded from employer disciplinary action.

Employer Liability:  While employers are not responsible for every personal Tweet by their employees, there are several common circumstances where employers may be held liable for what employees post online.  For instance, employees must disclose their employment relationship whenever they endorse the employer’s products or services on their own personal blog, Twitter account, Facebook page, or other social media site. Failure to make the required disclosure may render the company liable, regardless of whether the communication was known by the employer or not. Further, employers will generally be held liable for what an employee posts on a corporate social media account. A defamatory or discriminatory posting on the company’s Facebook page, for example, is bad news not only for the employee writing the post, but likely for the employer as well.  Employers therefore should not bury their heads in the sand when it comes to what their employees are posting online; such posts may land the employer in legal hot water.

Although the benefits of social media for small business generally outweigh the associated legal risks, familiarizing yourself, and your staff, with the rules involved is a prudent precautionary first step whenever harnessing the power of online communications.

Robert McHale, Esq., is the founding member of R | McHale Law, a full-service, Boston-based law firm whose corporate practice represents clients on a wide variety of IT and intellectual property law matters, including privacy and data security, trademark, copyright, trade secrets, technology licensing, and other proprietary protections. His areas of focus include general corporate law, business litigation, web/mobile applications, online marketing, new media, and Internet and e-commerce technology. McHale is also the author of Navigating Social Media Legal Risks: Safeguarding Your Business (Que Publishing, May, 2012).

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