The importance of utilizing social media to help any business grow cannot be understated. But, there can be serious legal consequences for businesses when their employees or affiliates and marketers use any of the popular social media forums. This can hold true both when employees are acting on behalf of your business and when they use social media for their personal use. Smart business owners identify the problems ahead of time and then devise a strategy to prevent unnecessary liability and address risks when they become known. Of course, that strategy should start with an appropriate social media policy. But, many businesses draft social media policies which do not address all the potential concerns it should, or even draft policies in a manner which renders them illegal!
So, how can you ensure your business’s social media policy isn’t a dud? First, you must understand what could go wrong in social media.
What Could Go Wrong For My Business In Social Media?
Here is a broad list of legal concerns your business may face relating to social media:
- -Employees who reveal confidential or proprietary information in a blog entry that can be viewed by millions of readers;
- -Employees who post discriminatory or negative comments on social media regarding your business or other employees;
- -Employees who post objectionable content on their Facebook pages that raises into question their character, which in turn reflects on your business; or
- -Employees, affiliates and other sponsored endorsers can even subject their employers to liability by promoting the company’s services or products without disclosing the employment relationship. This is otherwise known as a sponsored endorsement in legal parlance. The FTC has made it clear that any “material connections” between the endorser and the sponsor must be disclosed in connection with a product or service endorsement, which is defined as any type of positive review. Sponsored endorsers can also potentially create liability for your business through any deceptive claims made about any products or services offered by your business.
Why A Social Media Policy Can Protect Your Business
If you have employees or use any type of third-party marketers or affiliates, you should adopt a written social media policy. Though not an absolute shield from liability, businesses must adopt social media use policies protecting the employer consistent with the company’s organizational culture. Not only can these policies serve as a strong deterrent to employees, they can be uses as the basis of terminating employees and affiliates or other third-parties.
But, What Should Your Company Social Media Policy Really Say (Or Not Say)?
Of course, your company’s social media policy should make clear to employees what the employer expects with regard to social media use, both on and off the job. These expectations may vary between companies, but employers should generally be concerned with rules against conduct that may result in unlawful sexual harassment or other liability, rules prohibiting disclosure of confidential or proprietary information, and company policies governing the use of corporate logos and other branding concerns when engaged in social media use. I’ll go into more specific details about what your policy should say below.
But, the problem every employer must understand with employee social media use is that the individual’s actions may be legally protected. Some states, for example, have laws protecting employees’ off-duty activities and political activities or affiliations. At the Federal level, the National Labor Relations Act protects employees who engage in “concerted activity,” which often includes the right to discuss the terms and conditions of their employment with co-workers and outsiders. If your social media policy has not been updated over the past two years, the policy is likely to be out of compliance with the guidance provided by the National Labor Relations Board recently. In addition, federal and state whistle-blower laws protect employees who complain about (among other things) potential securities fraud violations, in certain situations.
Some practical and basic guidelines you should include in any social media policy are listed below. I use the term “employees” to refer to employees, affiliates and all other sponsored endorsers.
-Employment Rules and Company Code of Conduct
Require that employees always follow the terms of their employment agreement, employee handbook or other company code of conduct at all times when using social media (obviously this just applies to employees). The social media policy should restrict employees from violating the terms of any company policy via social media use for work or personal purposes.
-Broad Use Statement
You should state that the policy applies to all forms of social media, including multi-media (videos, posts or audio recordings), social networking sites, blogs, podcasts, sharing sites and wikis and covers both professional and personal use.
Employees should not disclose any information that is confidential or proprietary to the company or to any third-party. What if you have a new product or software application in development that you want to keep confidential? What about financial and other non-public information? There are a million reasons to post rules prohibiting disclosure of confidential or proprietary information on social media sites. The best practice is to define what comprises “confidential” and proprietary information and other trade secrets similar to a non-disclosure agreement and restrict disclosure. This restriction should include personal use and use on company owned sites. But be specific. Rather thanbanning any and all disclosure of confidential information, be specific about exactly what cannot be disclosed (such as trade secrets, customer information, business strategies, etc.).
-Endorsements & Affiliation
If an employee comments on any aspect of the company’s business they must clearly identify themselves as an employee and include a disclaimer. Employees should neither claim nor imply that they are speaking on the company’s behalf unless they are expressly authorized to do so. For example, you should require each employee to use the language “any views expressed are personal opinions and do not necessarily reflect the views or opinions of ABC Corp.”
All sponsored endorsers must not make any misleading or deceptive ads or claims about your products. All content must be accurate and truthful. Since you are just as responsible as any sponsored endorser would be, you need to have a clear policy on what deceptive advertising is and restrict such claims. In fact, any employee, affiliate, etc. you allow to post or promote on behalf of your business really should truly understand what is deceptive under FTC and state consumer protection laws. Your social media policy should restrict your company’s bloggers or product reviewers, affiliates and marketers against making such claim and the policy should be incorporated in the separate agreements used with any affiliates and independent marketers.
-Intellectual Property & Brand Dilution
Restrict your employees from including any company logos or trademarks on their own personal blogs or Facebook pages unless permission is granted. Similarly, they should not be allowed to upload or paste these marks onto any other interactive forum. Clearly communicate the company’s expectations and offer examples of scenarios that are acceptable and include an approved description of the company’s brand. Make it clear that individuals who link online identities with the company and disclose their employment also incorporate the approved language into their online profiles. A policy that includes the positive can help to build advocates for the brand. Trust your employees to drive responsibly if you give them the rules of the road. You should restrict employees from posting unauthorized ‘promos’ that purport to represent the company without pre-approval.
All posts and content uploaded onto any corporate blog, fan page or integrated into promotional multi-media application (i.e. a company podcast) must not violate copyright, privacy laws or be defamatory.
You should require that each of your employees seek and obtain approval before posting or adding content to any corporate blogs, Facebook fan pages, Twitter accounts, etc., and have a system in place to monitor and remove this content at all times.
-Adopt Restrictions on Posts, but understand the requirements of the NLRA first!
Under the National Labor Relations Act (“NLRA”), an employee cannot be fired based upon “protected, concerted activity” that relates to the terms and conditions of his or her employment or that involves coming together with other employees in issues relating to employment. Under the NLRB, employees have a legal right to discuss the ‘terms and conditions’ of their employment, which protects a broad spectrum of conversations, potentially including complaints about wages, working hours, supervisors, and other aspects of an employee’s working conditions. This includes such discussion through social media site. While state employment laws vary and may protect your employees right to free speech, you can still reserve the right to request that the employee avoid discussing certain subjects, withdraw certain posts, remove inappropriate comments and generally restrict the employee from posting any type of comments or videos that would tarnish the reputation of your business. However, generally speaking, complaints related to working conditions are protected. The National Labor Relations Act (NLRA) applies to union and non-union employees alike.
A social media policy violates federal law if a reasonable employee could interpret the policy to prohibit conversations about the terms and conditions of their employment. If a social media policy has not been updated over the past two years, the policy is likely to be out of compliance with the guidance that has been issued by the National Labor Relations Board over that period and recent NLRB decisions relating to social media policies.
But, inappropriate remarks about the public do not relate to working conditions and are therefore not protected. In the context of social media, the National Labor Relations Board has issued an Advice Memorandum each company should review before drafting its social media policy. For example, firing an employee for making inappropriate and insensitive remarks about certain crime victims via Twitter was not considered to violate the law.
On November 5th, 2013, an NLRB administrative law judge determined that terminating 2 employees for the following Facebook posts did not violate the employee’s rights under the NLRA:
“I don’t feel like being their b*tch and making it all happy-friendly middle school campy. Let’s do some cool sh*t, and let them figure out the money. No more Sean. Let’s f*ck it up.”
“You right. They don’t appreciate sh*t.”
“[H]ahaha! F*ck em. Field trips all the time to wherever the f*ck we want!”
“[W]on’t be there Wednesday. I’m outta town. But I’ll be back to raise hell wit ya. Don’t worry. Whatever happens I got your back too.”
But, a New York City tour guide’s Facebook postings constituted protected union organizing activities (New York Party Shuttle, LLC and Fred Pflantzer, CN: 02-CA-073340). The NLRB determined that the employer unlawfully discharged its bus driver employee when it refused to give him new assignments after he posted Facebook messages criticizing the company’s employment practices. The employee’s posts referred to one of the employee’s former employer as a “worker’s paradise” compared to his new employer, noted that “there is no union to protect you,” and complained that paychecks from his current employer sometimes bounced. His postings also stated that when he began to agitate for a union, he stopped getting scheduled for work. These posts were protected, according to the NLRB.
Concerted activity is not always protected by the Act, whether made in person or electronically via social media. The bottom line is that when conduct has a demonstrable effect on an employer’s business or is of such character as to render the employee unfit for further service, the NLRA will not protect the employee.
The Lesson: the following types of Facebook posts by employees regarding their employer have recently been determined as not constituting protected conduct under the law: 1. posts containing profanity: 2. posts hurling insults at the employer; and 3. posts showing disdain for the employer. Your business’s social media policy can restrict this type of conduct. But, employees who complain about workplace treatment based on their social media activity may be protected under the NLRA, even if their posts contain disrespectful or coarse language!
Terminating employees based on social media policies that violate the NLRA will subject employers to liability under the law. This may include reinstating the employee with full back pay and benefits. So, don’t include provisions in your company’s social media policies that the NLRB has determined to be unlawful.Your business should stick with the general guidelines established by the recent NLRB decisions and should even include specific examples of posts not permitted.
Your business should also pay attention to Geo-Location Issues. For example, there are instances where the location of an employee itself may actually be confidential, such as at the offices of a company that may potentially be acquired by your business. Along those lines, the social media policy should address using geo-location features of social media platforms and potentially restrict enabling such features during such times.
Where most social media policies fail according to many attorneys is that they are often missing illustrative examples. In order to comply with the NLRA, your company’s social media policy should define or give illustrative examples of terms that the NLRB has identified as problematic.
Rule: Your policy should contain carefully drafted examples that illustrate the prohibited behavior, but your policy should not include sweeping, overly broad prohibitions.
Avoid vague and general outright bans! For example, rather than banning any disclosure of a company’s confidential information, the policy should specify exactly what cannot be disclosed (such as trade secrets, customer information, business strategies and product development). Also including language that broadly restricts “any disparaging remarks” is also not a good idea. The bottom line is that employees have the right to complain about their employer and outright restrictions against posting such complaints isn’t legal.
Remember, your business should always monitor the content on your company-owned social media pages to ensure legal compliance. Ultimately, complying with the law and avoiding liability is up to every business owner! There is no social media ‘cookie-cutter’ policy. Each company social media policy should be specific to the company culture and its expectations.
This article was written by Philip A. Nicolosi, J.D. Mr. Nicolosi provides legal services through his law firm, Phil Nicolosi Law, P.C., focusing on startup and small business law, Internet & technology law and commercial transactions.
Mr. Nicolosi serves as a trusted advisor to numerous startups and small to medium sized businesses. This includes representation for a wide range of business law matters including business organization, corporate/LLC governance, regulatory law, contracts and transactions and most other matters outside of litigation. Mr. Nicolosi provides guidance with e-commerce, Internet and mobile marketing and technology-related legal matters to many of his business clients. He also assists startups with seed funding and venture capital law.