Social Media:Challenges and Opportunities for Employers

New York Times – May 21, 2009

“The position of social media specialist, introduced by companies like Comcast, General Motors and JetBlue Airways, has become the hottest new corporate job among the Twitterati. To marketers, it seems, personal relations have become the new public relations.”

OVERVIEW

• The Evolution of the Web

• Legal Framework

• Internal Challenges

• External Challenges

• Internal and External Opportunities

• What to do?

Web 1.0

• The old-fashioned internet

• Content is posted by site designer

• Users cannot edit content

• News, information, shopping

Web 2.0

• New term developed to differentiate websites where the content is generated by the user rather than the host

• Blogs• Social Networking

Sites• Wikis• Forums• Sharing Sites• Virtual Communities• Gripe Sites

Blogs

• Weblogs

• Essentially an on-line diary

• Can includes pictures and graphics

• Can be open to the public or password required

• Typically one-way communication

• www.blogger.com

Social Networking Sites

• Users create an on-line profile and content that is shared with other users of the site

• Profiles (or a limited part of the profile) may also be available to the public

• Facebook.com• MySpace.com• LinkedIn.com• Twitter.com• Plaxo.com• Bebo.com• Orkut.com• Plurk.com

Wikis

• Hawaiian work for “quick”

• Allows users to edit so that the content of the site is maintained and updated

• Registration and/or authorization sometimes required to edit but not always

• Wikipedia.com

Message Boards and Forums

• Websites that are designed to allow users to post content about a particular issue or subject matter

• Postings may or may not publicly identify the user

• big-boards.com has 2276 in their database

Sharing Sites

• YouTube• YouPorn• RuTube• Flickr• JibJab• Liveleak• Dailymotion

• MyVideo• Gawkk• Sevenload• Photobucket• Metacafe• EngageMedia• ReelTime

Virtual Communities

• Simulated environment where users interact via “avatars” – virtual representations of the user

• Can be 2D or 3D

• Secondlife.com

Gripe Sites Abound

• Judged.com

• Abovethelaw.com

• JobVent.com

• Glassdoor.com

• Walmart-blows.com

• ____.sucks.com

• PingMyCompany

• Chase-sucks.com

• Multiplastics.com

• bestbuysux.com

• Slaveway

Some Startling Statistics

37% of connected employees say they surf the Web constantly at work.

86% of employees use office email for personal reasons.

30% of American workers watch sports online while at work.

More…24% of American workers admit to shopping online while at work.

70% of all Internet porn traffic occurs during the nine-to-five work day.

64% of employees have received offensive emails at work.

employee-network-monitoring.com/statistics

Web 2.0 at Work

• More than 50% of employees admit accessing Web 2.0 sites while at work

• 73% of IT managers report at least one security incident as a result of such use

FaceTime Communications,

November 2008

Social Media• Social networks and blogs are now the 4th

most popular online activity - ahead of personal email

• Member communities are visited by 67% of the global online population

• Time spent is growing at 3 times the overall internet rate, accounting for almost 10% of all internet time

Nielsen Online - March 2009

Legal Framework

• The Electronic Communications Privacy Act

• The Stored Communications Act

• National Labor Relations Act

• Privacy Rights

• Free Speech Rights• Whistleblowers• Lawful Non-Work

Activity Statutes• Reporter’s Privilege• Limitations

The Electronic Communications Privacy Act

• Federal statute that prohibits the interception of electronic communications

• It is an offense to intentionally access electronic communications without the consent of the sender or recipient

• Employers are permitted to intercept for a legitimate business purpose

The Stored Communications Act

• Federal statute that protects the privacy of stored internet communications

• It is an offense to intentionally access stored communications without consent

Concerted Action

• National Labor Relations Act provides right “to engage in other concerted activities for the purpose of collective bargaining or other mutual aid and protection”

• Applies to union and non-union

• Must act with or be authorized by other employees

• Must be for an economic objective

• Employer cannot interfere with this right

Privacy Rights

• Konop v. Hawaiian Airlines, Inc.

• Court held that unauthorized viewing of a secured Internet site by an employer could afford a plaintiff a cause of action under U.S.C. §§ 2701-2711 (2000), Title II of the Electronic Communications Privacy Act.

Free Speech Rights

• Governmental entities cannot interfere with free speech rights

• No “free speech rights” in the private employment context except in certain states like California

• There are public policy claims available in many states

Whistleblowers

• Complaints of potentially illegal activity are protected under both federal and state laws

Lawful Non-Work Activity• Some states prohibit taking any

disciplinary action against an employee for engaging in lawful activity outside of work– Political Activity– Consumption Of Lawful Products– Smoking/Tobacco Use– Lawful Off-Duty Conduct– First Amendment Activity

Reporter’s Privilege

• O’Grady v. Superior Court

• Web sites are publications protected under the reporter’s shield law

• Denied Apple’s request for the names of those leaking trade secrets on the web

Limitations

• Implied duty of good faith and fair dealing– Available only in limited states like California– Can be used if employer uses information that

is inaccurate and the employer did nothing to verify the information

• Contractual obligations

Internal Challenges

• Background checks

• Discrimination

• Harassment and Retaliation

• Disloyalty

• Insubordination

• Employee monitoring

Background Checks

• 44% of employers use social-networking sites to examine the profiles of job candidates and 39% have looked up the profile of a current employee

• Vault.com

Remember FCRA• Fair Credit Reporting Act requires an

applicant’s or employee’s consent before an employer can use a “consumer reporting agency” to conduct a background check and get a “consumer report” l

• Are search engines or search sites a “consumer reporting agency”?

Beware Use Policies

• If you collect information from users, you will: obtain their consent, make it clear you (and not Facebook) are the one collecting their information, and post a privacy policy explaining what information you collect and how you will use it

TMI?

• You may discover information that could lead to a claim of discrimination

• Protected class status (depending on the state): race, age, national origin, veteran status, gender, sexual orientation, legal off duty activity, political affiliation, disability

Reliability of Information

• Identity confusion• Who posted the

information?

• Numerous third party vendors available to individuals to monitor and “clean up” on-line reputations– Naymz.com– Brandtitan.com– Defendmyname.com

Discrimination

• Simonetti v. Delta Airlines

• Flight attendant posted suggestive photos of herself wearing her uniform on her blog

• She was terminated

• Claimed sex discrimination because male employees were not terminated for similar and worse behavior

Discrimination

• Managers – who are their friends and connections and activities?– Online sisters, pokes, flowers, etc.

• Content/Animus in postings/games– Mafia wars– Join my group (Christians, etc.)

Harassment and Retaliation• Blakey v. Continental Airlines

• After Blakey sued Continental for harassment, fellow employees allegedly posted defamatory and harassing comments about her on an independent employee discussion board

• NJ Supreme Court said employer may have duty to monitor the postings

Disloyalty

• Employees owe a duty of loyalty to their employers

• Marsh v. Delta

• Employee who wrote letter to the editor criticizing Delta was terminated

• Letter was “simply venting and not raising matters of safety or illegality”

Insubordination

• Austin Police Chief fired a police officer for insubordination after the officer posted a blog entry that his superiors concluded was meant to undermine the chief’s authority

• Lawsuit was filed – ultimately dismissed

Monitoring Employee Activity

• Workers’ Compensation

• Disability Leave

• Sick Leave

“The Online Divide Between Work and Play”

NY Times Article,

April 26, 2009

Article discusses how social media blurs the line between work and play when co-workers become part of your online network

External Challenges

• Discovery• Admissions of liability• Disclosure of

confidential information and trade secrets

• Defamation• Copyright violations

• Unfair competition• Competitive

intelligence• Negligent hiring and

retention• Damage to reputation

Discovery

• Social media provide a potential treasure trove of information – for you, your employees and your competitors

• Make sure to check Statement of Rights and Responsibilities

Admissions of Liability

• Tough lessons learned by Joshua & Lara

• Involved in drunk driving crashes

• Pictures of Joshua at a Halloween party wearing prisoner pinstripes

• Pictures of Lara drinking and comments about partying

• Used against them in sentencing

Disclosure of Confidential Information and Trade Secrets

• DVD Copy Control Assoc. v. Bunner

• Still on appeal but appellate court held that widespread dissemination of a trade secret – even if through an inadvertent or illegal leak – could lead to the loss of trade secret protected status

Confidential Medical Data

• Doe v. Green

• Paramedic posted details on his MySpace page about a sexual assault victim he had treated. He didn’t give a name but gave enough detail that a TV crew allegedly showed up on her doorstep.

Defamation

• Ward v. Cisco & Albritton v. Cisco

• Cisco Systems and one of its lawyers, Richard Frenkel, were sued for defamation over an anonymous blog in which Frenkel allegedly accused two Texas attorneys of engaging in criminal conduct

• Cisco employees now have to include a disclaimer that their views are their own

Copyright Violations

• An employee who publishes a misappropriated third-party trade secret or copyrighted material on the internet may be liable

• If employer computer system was used, a potential claim could be made against the employer

Unfair Competition?

• Wild Oats and Whole Foods

• CEO of Whole Foods Markets posted negative comments about Wild Oats and positive comments about Whole Foods

• Investigation did not result in charges

Competitive Intelligence

• Many companies employ third party services to monitor everything posted on the web about their competitors

• “These systems can be effective competitive intelligence tools” Steve Duncan, Society of Competitive Intelligence Professionals

Negligent Hiring and Retention

• Claims available against employers who ignore expressions or record of violence

• Claims available to employees and third parties

Damage to Reputation

• Can you protect yourself against being “blindsided by two idiots with a video camera and an awful idea”?

• Domino’s anyone?

• How should you respond?

Internal Opportunities

• On-boarding

• Training

• Communication and collaboration

• Team building (Serena Software, Nestle)

• Resource development and maintenance

• Project management

External Opportunities

• Recruiting– Passive candidates– Job postings

• Brand management

• Competitive intelligence

• Customer communication

• Sales

So – Now What?

• Follow social media developments

• Analyze how your employees are using social media – both for business and personal uses and assess the benefit versus the risk

• The analysis will vary by job function and job category

Develop Policies

• Establish right to monitor activity

• Consider whether to have restrictions on access, use during working hours or just a requirement that it not interfere with job duties

• Establish guidelines for accepted and prohibited uses

Background Checks

• Get consent in application

• Use can vary by job category

• Consider separating recruiting data from hiring process

• Consider prohibiting hiring manager from googling applicants

• Consider using post offer only

Background Checks

• Establish written process for checks by category of job– No pre-texting– Consistent process for searches– Criteria used (e.g. criminal behavior,

discriminatory animus)– Retain record of pages viewed– Discuss before revoking offer

Approvals

• Consider an approval process to get permission to use social media for business purposes

• Require a disclaimer if company name is used to make it clear that the views expressed are not those of the company unless the business use has been approved (caution for managers)

• Require approval to use company logos, trademarks or other IP

Confidential and Proprietary Information

• Caution about confidential and proprietary information

• Address concerns about customers, partners or suppliers

• Address concerns about disclosing activities, plans and finances

• Address ownership of connections when an employee terminates

References

• Address whether employees can provide recommendations on LinkedIn, etc. for current and/or former employees, colleagues, competitors

• Consider reserving the right to require the retraction of recommendations

Relationships

• Consider restrictions on who can be friends/networked – esp managers

• No “fighting”

• No harassment, discrimination or retaliation

Content Restrictions

• Respectful, truthful communications regarding the company, co-workers and competitors

• No offensive or illegal statements or activities

• No offensive screen names

Educate, Educate, Educate

• Outline the internal and external challenges created by misuse of social media

• Clearly communicate your expectations

• Identify sanctions

Don’t Overdo the Buzz Kill

• Include the positive uses of social media

• Assess use and develop guidelines in a collaborative process

• IBM - “Don’t Forget Your Day Job”

• http://laurelpapworth.com/enterprise-list-of-40-social-media-staff-guidelines/

Moral of the Story

• Only two things are infinite, the universe and human stupidity, and I'm not sure about the former.

Albert Einstein

QUESTIONS?

Cynthia L. Gibson

Laura A. Hinegardner

Katz, Teller, Brant & Hild

255 East Fifth Street, Suite 2400

Cincinnati, Ohio 45202

513.721.4532

cgibson@katzteller.com

lhinegardner@katzteller.com