Legal Issues for Business and Social Media

Legal Issues for Business and Social Media

Social media is a relatively new phenomenon, and the law is just beginning to catch up with the issues that are being raised for businesses. 

A thorough legal review of a company's social media practices is always a good idea, but here is a preliminary checklist of possible issues to be addressed. 

Employees' (or Job Applicants') Personal Social Media Accounts 

These days, many employers want to keep tabs on their workers' social media presence. Employers want to get out ahead of problems, such as employees bad-mouthing the company on Twitter or posting confidential information on Facebook. 

In addition, in one recent survey, 39% of businesses said they check their job applicants' social media accounts before making a hiring decision, and of those, 43% said they had rejected someone because of something they had found. 

But there is a potential legal minefield here. Suppose a manager's social media snooping reveals something private about an employee – perhaps the employee is gay, or a Muslim, or disabled, or over 40, or has a family member with a disease that will affect the company's health care premiums. Once the company is aware of this information, it will be much harder to prove later that any action taken against the employee wasn't motivated by discrimination. It is like the company will be presumed guilty of discrimination unless otherwise proven innocent, which is oftentimes hard to do. 

Of course, some information is no doubt relevant – you surely want to know if a customer service worker has racist attitudes, or if someone who drives for work has a drinking problem. One solution might be to hire a third party to conduct social media searches for you and only report information that is truly pertinent to the employee's ability to perform his/her job function. 

Do You Trademark Your Social Media Handle? 

Consider a recent case in which Beer Exchange Bar and Grill in Kalamazoo, Michigan, sued Bexio, LLC, an online network that allows beer connoisseurs to trade brews. The bar and grill uses the handle "@thebeerexchange" for all of its social media. Bexio generally uses the handle "@thebeerexchangeapp", except that it used "@thebeerexchange" on Instagram – which allegedly resulted in many customers getting confused and posting to the wrong place. 

Handles and usernames have become a big part of business marketing, and it is critical to make sure that you have safeguarded the legal rights to yours. 

Social Media Contest 

The Federal Trade Commission is cracking down on contests that require people to post a testimonial, add a photo on Pinterest, retweet something or "like" a Facebook page. The problem is that this could be deceptive marketing if someone sees a like or a retweet and doesn't realize the poster had a financial incentive to create it. 

Most recently, the FTC announced that if a contest has a designated hashtag, the hashtag must be extremely clear that a contest exists. For example, "#AcmeWidgetSweepstakes" would be okay, but "#AcmeWidgetSweeps" is not clear enough says the FTC. Keep in mind too that you must publish all the contest rules just as you would for contests outside the social media realm. 

Retweeting or Otherwise Passing Along Customers' Social Media Content 

Retweeting or passing along content for your customers may be a great idea unless the customer has misappropriated a copyrighted image, violated someone's privacy or done something else wrong. Then, after the customer having actually done the initial bad act, you could still be responsible and on the hook for it. 

Employees' Social Media Usage 

The National Labor Relations Board recently weighed in on when a business can limit an employee's social media usage. The issue is that all employees (whether or not they belong to a union) have a right to communicate with each other and discuss workplace issues in an effort to improve their working conditions. 

Believe it or not, according to the NLRB, here are three things you cannot legally do: 1) prohibit employees from posting sensitive information about the company; 2) prohibit them from posting embarrassing facts about co-workers or customers; and 3) require them to get permission to link to the company's website. 

You can, however, require employees who post on certain social media to identify their employer and state that their views do not necessarily reflect those of the company. 

Saving Business-Related Social Media Posts 

Most companies these days know that they need a policy on retaining emails and computer files in the event of litigation. However, many companies don't realize that social media posts also need to be included in the policy. 

Ownership of the Company's Social Media Accounts 

There needs to be a clear designation for every business that the business is the owner of the business's social media accounts. You don't want to spend valuable resources having employees becoming well-known on social media, only to have them leave and take their online followers with them. As a result, there needs to be clarification and a clear understanding as to who owns the rights to the social media, including all of the information, posts and identified online followers who the business will want to retain as a result of its investment of time and money.