The growth of social networking presents every business with both challenges and opportunities.  Social media offers all businesses and their employees the opportunity to advertise with unprecedented reach and to provide exceptional customer service.  At the same time, a business embracing social media should be aware of the legal risks, which include litigation, reputational harm, security and confidentiality breaches.  Businesses should consult legal counsel to assist them in crafting a social media policy that achieves their marketing strategy, while protecting them from legal harm.  Below are ten legal pitfalls that any business should consider when engaging in social media and creating a social media policy.

  1. Torts Committed by Employees:  When employees engage in social media, an employer runs the risk that the employee will defame, harass or otherwise damage customers, employees, or competitors.  Blog postings are a form of publication that can create liability for an employer if defamatory content appears on a company-sponsored blog.  Pure opinion cannot be defamatory.  If an employer knows or has reason to know that an employee is engaging in such offenses, it may be deemed vicariously liable if it does not take action.  The Communication Decency Act (“CDA”) provides a safe harbor for companies who maintain websites allowing unrelated third parties to post user-generated content.  In the typical case, a plaintiff who believes she has been defamed sues both the author of the statement and the website that provided a forum or otherwise passively hosted the material. Courts have held that in most cases, such claims against the company hosting the website are barred by the CDA.  
  2. Discrimination/Screening:  Information on protected characteristics such as gender, sexual orientation, age, race, or disability may be readily available on an individual’s social networking site profile, and an employer may discover this information while researching applicants or employees. If an employer ultimately rejects the applicant or terminates the employee, the risk of a discrimination claim increases if that person can show that the employer unlawfully used the sites to obtain this information and the individual suffered an adverse employment action as a result.
  3. Wrongful Termination/Hostile Work Environment:  If something is voiced through social media about an employee who ends up terminated there may also be issues regarding discrimination. Unwelcome comments based on protected classifications may create a “hostile work environment” if done through social media.
  4. Violations of Privacy:  Employees and applicants may challenge an employer’s search of a social networking site as an invasion of privacy and an illegal search under the Fourth Amendment.  If the claimant shows that the employer or business used questionable tactics to gain access to a site that the employee or applicant attempted to keep private, the severity of a claim is enhanced.
  5. Freedom of Speech:  Applicants or employees may also defend that their right to publish harmful information over social media is protected by the First Amendment freedom of speech claim if they are employed by the government.
  6. National Labor Relations Act:  The NLRA may protect union and non-union employees who blog about wages or proposed changes in benefit plans as they affect all or a group of employees because that is arguably engaging in a protected concerted activity under Section 7 of the Act.
  7. Legal Restrictions on Employer Regulation of Off-Duty Activities:  Some states protect employees from adverse actions based on their lawful off-duty activities.  This arguably includes blogging and using social media sites.
  8. “Whistleblower” Issues:  Protections for “whistleblowers” may exist under state and federal laws, and employees who post criticisms of company practices that violate laws or regulations may be protected by whistleblower laws.
  9. Risks to Confidential Information and Business Reputation:  Businesses risk employees or web-users intentionally or unintentionally revealing confidential information or broadcasting negative remarks to the entire worldwide web.  The informal nature of blogging makes accidental disclosure more likely.  Comments about what one is doing at work may accidentally lead to confidential information being leaked. Companies sometimes do not stress that certain information is confidential and thus employees do not know it should not be discussed.
  10. Copyright and Trademark Violations:  Unauthorized use of trademarks or copyrighted works on company-sponsored or hosted employee blogs can result in liability for the company.  There is often an issue of ownership.  Was the infringing content posted by an employee and on behalf of the company?  Or, was the content posted by a third party on a user generated forum that is hosted by the company.   The Digital Millenium Copyright Act (DMCA) creates a safe harbor for online service providers, protecting them from liability for infringing material, as long as they adhere to and qualify for certain prescribed safe harbor guidelines and promptly block access to allegedly infringing material (or remove such material from their systems) if they receive a notification claiming infringement from a copyright holder or the copyright holder's agent.