First came MySpace. Then employees started friending each other on Facebook. Now they can Snapchat back and forth. The evolution of social media doesn’t appear to be slowing down any time soon, and neither are the related workplace legal problems.
Law firm Reed Smith recently released the third edition of its guide to social media law, “Network Interference: A Legal Guide to the Commercial Risks and Rewards of the Social Media Phenomenon,” in which Reed Smith attorneys from around the globe tackle many of the legal challenges posed by the ubiquity of social media, including some problems that might not be so obvious.
Here are three issues raised by the report that U.S. employers and in-house counsel may not be considering right now, but should think about:
When it comes to social media use, top executives count as employees too, and they’re only human. “There have been cases where board members and executives have posted things to just their friends or just their circle or followers on social media, where that information has been deemed to be material to the valuation of the company,” Paul Bond, a partner at Reed Smith in the U.S. and a member of the firm’s global regulatory enforcement group, told CorpCounsel.com.
In 2012, Netflix Inc. CEO Reed Hastings almost got into big trouble with the U.S. Securities and Exchange Commission because of company information he revealed via social media. Hastings posted news on his Facebook page that Netflix had reached 1 billion monthly users for the first time. The SEC investigated whether Hastings’ post had violated the fair disclosure regulations that require companies to share information material to their financial condition as broadly as possible. In the end, the commission decided that Hastings was in the clear, in part because he had hundreds of thousands of Facebook followers, had shared the information in a public enough setting and anyone who wanted to follow his posts could do so.
Aside from riling up the SEC, a poorly thought-out comment posted on social media by an executive can also reflect poorly on the company’s reputation. Sometimes, the social media guide explained, it’s hard to distinguish when an executive is speaking on social media for himself or herself personally, and when he or she is speaking on behalf of the company. According to Bond, although there is no foolproof legal firewall to stop claims that an executive is speaking for the organization, there are ways to reduce the risks. “The company can adopt, communicate and enforce a policy that expressly tells executives that they have no authority to make statements on behalf of the company,” he said. “The company can also have a policy that sets forth how executives should identify themselves or craft their statements to avoid falsely implying that they speak on behalf of the company.”
It’s becoming more common for employers to use a job candidate’s social media account for preemployment screening. In a recent survey from the Society for Human Resources Management, 20 percent of respondents said they use social networking sites to screen candidates, and 12 percent plan to do so in the future.
In close to a dozen states, screening candidates before or monitoring them during employment by getting their Facebook user name and password or other social media login credentials is now illegal. Many other states have considered instituting a similar ban.
Bond said that what employees say on social media postings that can be publicly viewed by anyone is “fair game” for employers to look at without notice or consent. However, for more private postings, the situation gets tricky. He suggested the best practice for companies looking to monitor their employees’ social media use is to make sure they aren’t just conducting blanket, indiscriminate monitoring. Companies should “develop internal procedures that limit the amount and purpose of monitoring,” and seek to explain and get employee consent for official social media monitoring policies.
And this practice could lead to broader violations too. The Reed Smith guide explains that courts in the U.S. have found disguised employers liable for trying to access employee-created social networking groups. “Essentially, if you’re using it to pretend to be someone else, and then you use that pretense as the basis to ask for access to something, you’re obtaining access to electronic resources through fraudulent means,” Bond said. He recommends that companies explicitly forbid the use of online “disguises.”