The legal issues surrounding social media have been described as a “Wild, Wild West”—uncharted territory with ambiguous and rapidly changing rules. The constant stream of information in the form of status updates, pictures, wall posts, shared links, comments, “tweets” and “likes” raises issues in realms from intellectual property to employment law to e-discovery. For in-house attorneys, the issues are complex, and as social media becomes more engrained in daily life and less frequently written off as a fad, those issues increasingly are front and center on the legal agenda.

Social media issues of interest to in-house counsel can be broken into two major categories: social media as used by businesses and social media as used by individuals. With regard to using social media to build business, clear best practices are beginning to emerge, but that’s only part of the picture. When it comes to issues related to individuals, specifically employees, a developing body of research and case law can offer guidance in several common scenarios.

Going Social

For in-house counsel, a corporate decision to enter the social media realm can be enticing or frightening. If used effectively, social media can build a brand, increase good will and energize a customer base. Used ineffectively, however, it can turn customers away, or worse, open the door to loss or dilution of intellectual property, and liability for defamation or consumer fraud.

Ethan Wall is an associate at Richman Greer and member of Meritas Leadership Institute class for 2010 and 2011, which brings together 10 young attorneys who meet over the course of a year to develop leadership skills and work on an annual project. He just completed work on a yearlong study of social media and the law through the program. Wall identifies three major areas of concern when corporations use social networking sites: defamation, advertising and consumer fraud, and intellectual property.

Because companies can be held responsible for disparaging comments made online by employees, Wall says avoiding defamation is one of the most important reasons to craft a clear social media policy. Determining from the onset who is allowed to speak on behalf of the company through its official channels and what employees are allowed to say about the company on their personal social media accounts will help mitigate potential risk.

“Businesses should adopt a social media policy that identifies who, on behalf of their company, is allowed to talk on social media about the brand; what employees are allowed to use in terms of trademarks, copyrights or proprietary information on the Internet; and whether employees are allowed to associate themselves with the company,” he says. One of the benefits social media can provide companies is a new form of grassroots advertising in which consumers become involved interactively and help market a brand online through word of mouth. Wall cautions that, while such campaigns can be highly successful when they occur organically, a growing trend in marketing departments to attempt to manufacture these movements can backfire.

“When people discover that this is actually coming from the company, as opposed to coming from their fellow customers and consumers, it causes concerns and causes people to have bad will toward the brand,” he says.

Even more dangerous are the intellectual property risks that come with a move into social media. Wall recommends that any company considering a move to the social media sphere craft a plan for monitoring the web for both positive and negative references to the company. Monitoring can be done internally or through third parties.

Of course, such monitoring should not be limited to the activity on a company’s own social media accounts. Even if a company makes the decision not to have a social media presence, fraudulent profiles that others post could mislead customers.

“Companies’ intellectual property, such as their trademarks, can sometimes be used by someone who’s up to no good and can convince the viewing public that the company is itself behind this site. This can create false impressions that can lose you customers and damage the company’s relationship with its customer base,” says John Browning, Dallas-based lawyer and author of “The Lawyer’s Guide to Social Networking.”

Examining Employees

Unauthorized use of a company’s brand and image isn’t the only concern raised by social media. Experts suggest that employers should be monitoring the social media activity of both potential and current employees. To borrow a term popular among Facebook users, to “stalk” or not to “stalk” has become the question du jour when it comes to social media’s role in employment decisions. Those who oppose the use of social media in researching job candidates argue that viewing social media pages could cause employers to inadvertently discover information, such as a disability or pregnancy, which puts the candidate in a protected class, thereby creating the appearance of discrimination in the event of a negative employment decision. This “better safe than sorry” approach may reduce employer liability by avoiding exposure to such information.

Some experts, however, argue that this so-called safe approach might be anything but. Browning advocates social media monitoring of both potential and current employees.

“The reason given by some companies for not looking at [social media] at all is that ignorance is bliss,” he says. “But I maintain that the stakes are higher for you to not do that sort of search and to not do routine monitoring of employee social media activities, at least during the workday. There have been a number of instances where a company has been exposed to liability because of the online activities of its employees.” Researching job candidates, he adds, can protect against claims of negligent hiring.

As for potential legal implications associated with using social media websites in researching applicants, Wall says the real issue will be whether the potential employee has taken advantage of the privacy settings available on most social networking sites. For those who have not, he sees no difference between information found on public social media profiles and that found through a Google search, for example. He suggests starting with the “big three” social networking websites: LinkedIn, Facebook and Twitter.

“I don’t see any difficulties with accessing information that is publicly available, meaning you don’t need a friend request,” he says. “Businesses should try to access as much publicly available information as they can before hiring an employee.”

He warns, however, that forcing an employee whose social media profiles are not publicly available to grant access to that information may not be prudent. Social media policies should warn employees that online activity will be monitored. And such policies should be enforced, leaving employees unable to argue that company policy was more lenient in practice. Regular and diligent enforcement of social media policies and monitoring of online activities can both protect employers against liability and allow companies to maintain strong control over the brand.  

“The combination of telling employees upfront and being diligent about monitoring these activities is the better direction to go than the head-in-the-sand approach,” Browning says.

Digital Discovery

Part of what makes social media such an exciting arena is its flexibility; social networking websites are easily updated, user-friendly and highly customizable. However, the same qualities that make social networking websites appealing make for a nightmare when it comes to preservation and discovery. Like any other electronic record, relevant information posted to social media sites should be preserved once litigation is reasonably anticipated. The burden of preservation could fall on the employer, even when it comes to an employee’s personal account.

“Questions arise as to whether the employer is responsible for preserving that information,” Wall says. “The law is still unsettled in this area because we haven’t had any particular landmark cases yet about preservation issues for social media. However, the prudent in-house counsel will understand what their clients are doing on social media at the office.”

And if what those employees are doing involves information that could be relevant to litigation, in-house counsel should be ready to preserve it, Wall says. Employers who fail to take precautions could face sanctions and fines down the line if a judge determines they neglected to preserve evidence. Considering the ease with which employees can add and delete information from social networking sites, immediate action may be required to ensure proper records management.

“The last thing that an attorney wants is to learn that a client accessed Facebook from the workplace computer, relevant electronic evidence was uploaded on the social networking site, and after they learned about [potential litigation], that information was deleted and it was not preserved,” Wall says. “At that point, the attorney might face issues for spoliation of evidence.”

Kelly Kubacki, a staff attorney at Kroll Ontrack, which provides consulting on e-discovery and other issues, says social media will play an increasingly important role in litigation and, more specifically, e-discovery.

“People are turning to social media more and more to communicate,” Kubacki says, citing a study by research firm Gartner that predicts that social media will be the primary professional communications tool of 20 percent of employees by 2014. “We see social media as taking over e-mail’s role as really being the gold mine of evidence for discovery and litigation.”

Emerging Ethics

With new media come new ethical questions.

“Social media are not like traditional websites like Wikipedia or Google or that are one-way communication,” Wall says. “Social media are interactive …  it’s something that lawyers have never seen before, so they have had difficulty in applying the law as it is now to this new special medium. But that does not mean that the medium is not regulated.”

The biggest ethical issues when it comes to social media revolve around evidence collection. Obviously contacting represented parties is still off-limits, but what about witnesses? How much should lawyers disclose when sending a friend request solely for the purpose of gaining access to information for a case? Is it okay to send friend requests for that reason to begin with? What legal information can be posted to social media sites without violating ethical responsibilities? The questions go on and on, and official bar ethics advisory opinions are starting to come down in response to them. In general, those opinions allow for use of social media in evidence collection, but seek to regulate some specific activities. Once again, privacy settings are important. Publicly available information is considered fair game across the board, but when it comes to information available only to a person’s “friends” on the social networking website, the lines start to blur.

Most bars that have issued opinions agree that sending a friend request to an unrepresented third party for the express purpose of gathering evidence isn’t necessarily unethical, but the way in which a lawyer issues such a request is key. It would be appropriate, for example, for a lawyer to contact unrepresented parties via social networking websites and, after identifying himself as a legal professional involved with ongoing litigation, to request access to that person’s page for evidence collection purposes. This approach is direct and ethically sound, but some worry it’s not the most effective.

“Let’s say there’s a witness who may have some good dirt on the plaintiff and you want to get access to that person’s [Facebook] profile, but it would probably be counterproductive to say, ‘Oh by the way, I’m the lawyer on the other side of so-and-so’s case,’’’ Browning says. “Several official bar ethics advisory opinions all essentially say the same thing: It would be an ethical violation for an attorney, or for someone operating under his supervision, to misrepresent who they are in order to friend someone else on a social media site.”

Because social networking sites have long been marketed and used as a means of reconnecting with old friends, people are inclined to connect with people they don’t know, provided they have something in common, such as an alma mater. Creating a fake profile suggesting common background or finding a nonlawyer employee with such a commonality with the party in question and attempting to gain access to their account violates ethical responsibilities.

Some bars have said that it’s not an ethical violation for a lawyer to send a friend request with no additional information. According to these opinions, while it would be an ethical violation for a lawyer to include misleading information in a friend request, a request sent from a lawyer’s personal account doesn’t necessarily require an explicit statement of purpose. 

“In at least one ethical opinion, the court said that the attorney doesn’t need to tell [a witness] why they are requesting the information,” Wall explains. “If the attorney just sends a friend request from his own personal profile and the witness, for whatever reason, decides to accept it and gives them access, it’s akin to the attorney knocking on the witness’ door, asking if he can come in and the witness allowing the attorney to take photographs or take things from inside of the house.”

Experts say the various bar association opinions don’t really impose any new ethical limitations on lawyers, and instead simply translate existing rules to the new medium.

“When someone asks if we need new ethical rules to allow for these new forms of communication, I come down squarely on the side of no, we don’t,” Browning says. “The same old rules that we’ve had are equally applicable, it’s just a different form of communication. If you would not misrepresent yourself in talking on the telephone with a potential witness, you shouldn’t do it in an online context.”

Mobile Matters

When it comes to regulating social media access in the workplace, mobile devices can make the task a near impossibility. A 2010 Nielsen survey found that, by Christmas of this year, nearly one in two Americans will be smartphone users, up from roughly 10 percent in summer of 2008. Thanks to mandatory data packages, the smartphone explosion has led to increased access to all forms of social media, with the ability to update and connect on the go.

An employer worried about employees tweeting confidential information from the office may block access to Twitter on the office network, but if many employees have constant Internet access on portable devices, the restriction may be rendered moot.

“Because everyone is on social media these days, people are going to find a way to be on it whether businesses like it or not,” Wall says. “If they’re not signing on from their computers, they’re signing on from their Blackberries, their Droids, their iPhones, and they can access all of this from the palm of their hand. So businesses that are able to find a balance of responsible social media use in a way that promotes the business’ goals typically find the happiest medium.”

Matt McInerny, director of development and professional services at Advanced Productivity Services (APS), agrees that often the most effective strategy for businesses is one that puts new technology to work for them. APS offers cloud-based applications that increase productivity and profitability in areas such as time tracking.

McInerny says that, thanks to location services, which when enabled by users allow smartphones’ GPS to tell where the user physically is, productivity based applications have the potential to grow. Applications could, for instance, automatically adjust based on location to reflect the relevant tax law where a lawyer was meeting or track the location of contract workers. Companies should consider the potential advantages of mobile technology and balance that against traditional productivity and security concerns.

“The organizations that are too strict in limiting their users from using other devices are at a disadvantage,” McInerny says. “There should be a happy medium somewhere between restricting all access and opening everything up to the world.”