There is little question that social media sites like Twitter, Facebook and LinkedIn have become a critically important method of connecting brands and consumers. According to an eMarketer report, nearly three out of four small businesses use social media marketing. An effective social media marketing campaign can increase customer loyalty and brand perception. At the same time, businesses that maintain a social media presence run the risk that employees might use the company Facebook page as an online water cooler to vent their employment frustrations, or claim ownership of work-related Twitter accounts. Both in the context of maintaining and developing a social media presence and in regulating employee conduct through social media workplace policies, businesses could fall into some pits, including the risk of litigation and damage to brand and reputation, and must take the proper steps to protect the business’ interests.

Here are three emerging legal issues regarding social media that highlight the importance of developing a comprehensive social media policy in the workplace.

Who Owns a LinkedIn Account?

Recent lawsuits address the issue of ownership of social media accounts utilized for business branding and highlight the importance of maintaining written policies addressing employer and employee ownership of, access to and expectations of privacy for LinkedIn, Twitter and other social media accounts.

Eagle v. Morgan, 2012 U.S. Dist. LEXIS 143614 (E.D. Pa., Oct. 4, 2012), is the first case to address who owns a former employee’s LinkedIn contacts. Linda Eagle, the former CEO of a banking education company, sued her former employer following her termination from the company for changing the password for Eagle’s LinkedIn account and then replacing her name and photo with those of her replacement. Following these changes, Eagle temporarily could not access her LinkedIn account. The court granted summary judgment to the employer on Eagle’s Computer Fraud and Abuse Act and Lanham Act claims, but allowed Eagle’s state law claims to proceed. She prevailed on her invasion of privacy claim and misappropriation of publicity claim by showing that the company used her name and derived commercial benefit from her likeness. However, the court did not award Eagle any money damages after concluding that she could not establish monetary damages to a reasonable degree of certainty.

Who Owns Twitter Followers?

PhoneDog vs. Kravitz, No. C11-03474 MEJ (N.D. Cal. Nov. 8, 2011), is the first case involving ownership of Twitter followers. Employer PhoneDog brought suit against Noah Kravitz after he resigned from the company, alleging that he improperly took control of the Twitter account @PhoneDog_Noah (the standard company format for Twitter accounts of employees) and Twitter followers when he left. Kravitz was given use of the Twitter account to promote PhoneDog’s services, and he had amassed 17,000 followers during his four years at PhoneDog. When he left the company (to go work for a rival company), he changed the name of the Twitter account from @PhoneDog_Noah to @noahkravitz and kept the followers. PhoneDog alleged in its lawsuit against Kravitz that the Twitter followers comprise a "customer list" and "confidential information," and that PhoneDog’s investment of "costs and resources" created intellectual property rights in the account, under copyright, trademark and branding laws. The suit has recently settled and terms of the settlement were not disclosed.

In both cases, employers could likely have avoided litigation by creating an effective social media policy addressing ownership and use of business-related social media accounts. Such a policy should establish who owns the company social media account and specify a procedure for returning log-in information upon termination. If the business seeks to claim ownership of a social media account, it should be stated clearly in the policy.

Can Online Criticism Be Disciplined?

Section 7 of the National Labor Relations Act has always protected unionized employees’ right to communicate in a "concerted manner." In the context of social media, Section 7 protects such employees from workplace rules that tend to have a "chilling effect" on an employee’s right to criticize his or her employer. NLRB cases have strongly favored a unionized employee’s right to criticize his or her employer online, even when such is harshly critical of the employer and damages the brand.

Until recently, the National Labor Relations Board afforded little, if any, protection to non-unionized "at-will" employees, who generally could be terminated for any reason or no reason at all. As recent NLRB decisions indicate, the NLRB has been expanding the reach of the NLRA to cover non-union workers’ rights to discuss wages, hours and conditions of employment online.

Hispanics United of Buffalo, NLRB ALJ, No. 3-CA-27872, is one of the first NLRB cases involving termination of employees for Facebook posting. In this case, a newly hired employee complained via text messages to co-workers about the job performance of other employees, prompting one of the co-workers to post the following message on Facebook: "Lydia Cruz, a co-worker, feels that we don’t help our clients enough at HUB. I about had it! My fellow co-workers, how do you feel?" In response, four employees posted messages on the Facebook page objecting to Cruz-Moore’s characterization of their job performance. In response, the employer terminated the employees who posted the Facebook comments, finding the remarks constituted bullying and harassment. The administrative law judge concluded that the Facebook comments constituted protected activity because the employees "were taking a first step toward taking group action to defend themselves against the accusations they could reasonably believe Cruz-Moore was going to make to management."

In light of this decision and similar NLRB decisions, it is important that employers ensure that their social media policy is NLRA compliant. The NLRB recently issued guidelines concerning what employers may and may not set forth in social media policies. The following is a sample of policy language declared unlawful by the NLRB:

"Offensive, demeaning, abusive or inappropriate remarks are as out of place online as they are offline."

"Adopt a friendly tone when engaging online. Don’t pick fights."

"You are encouraged to resolve concerns about work by speaking with co-workers, supervisors or managers. [Employer] believes that individuals are more likely to resolve concerns about work by speaking directly with co-workers, supervisors or other management-level personnel than by posting complaints on the Internet."

The following is a sample of language declared lawful:

"Employees should avoid harming the image and integrity of the company and any harassment, bullying, discrimination or retaliation that is not permissible in the workplace is not permissible between co-workers online, even if it’s done after hours, from home and on home computers."

"As a company, [employer] trusts — and expects — you to exercise personal responsibility whenever you participate in social media or other online activities.

Businesses need to protect themselves and their brands from harm that a soured employer-employee relationship can cause. The marketing investment businesses make of time and money to build a social media presence affects the businesses’ bottom line.

In order to protect the brand and image, it is important for employers to develop a comprehensive social media policy in the workplace that is compliant with existing law. In this ever-changing area of law, such policies should be regularly reviewed by legal counsel to ensure compliance.

John H. Prorok is a partner of Maiello Brungo & Maiello, practicing in the areas of real estate, corporate and business law. He can be reached at jhp@mbm-law.net, 412-242-4400 or on Twitter@jhp_esq.

Michael L. Brungo is a partner with the firm. He represents public and private entities regarding employment matters such as hiring and discipline, defending claims of discrimination and negotiating terms and conditions of employment. He can be reached at mlb@mbm-law.net or 412-242-4400.

Adam G. Vahanian is an associate at the firm, practicing in the areas of real estate taxation, civil litigation, business and school law matters. He can be reached at agv@mbm-law.net or 412-242-4400.