The use of social media in the workplace is expanding exponentially. More and more employers have adopted social media policies, reflecting a growing awareness of the need to use social media and monitor employees’ use of social media in appropriate ways.

This article seeks to identify discreet uses of social media in the workplace and identify and discuss legal issues that arise in each area.

The Hiring Process

No law prohibits employers from accessing the public pages of an applicant’s social media. Seven states — Arkansas, California, Illinois, Maryland, Michigan, New Mexico and Utah — have social media privacy laws that limit access to passwords and/or prohibit employers from requiring applicants to log onto a social media site to enable the employer to access private pages. Several other states are considering similar laws. In states where these prohibitions do not exist, it is not per se unlawful to require passwords, but doing so is fraught with danger and probably not a good idea. Common law privacy rights arguably prohibit an employer from "faux friending" an applicant to gain access to private pages and could also apply even where an applicant, under the duress of seeking employment, "voluntarily" provides a password. Additionally, unauthorized accessing of applicant or employee personal computers might violate state and federal anti-hacking laws.

Although public pages can provide useful information in considering an applicant, they also pose a significant risk of liability for employers. As a general proposition, federal, state or local anti-discrimination laws prohibit basing employment decisions on age, race, religion, marital status, national origin, ethnicity, disability, gender, pregnancy, military service, citizenship, finances, medical conditions, arrest (and possibly conviction) history and sexual orientation. An applicant’s public social media pages can reveal a pregnancy, arrest record, medical condition or other facts employers may not consider in making hiring decisions. Even seemingly innocuous information, such as food likes, music preferences and tattooing, can be argued to be related to a particular ethnic or religious group. Once an employer has knowledge of such matters, it loses the ability to argue that there is no possibility of discrimination in making an adverse employment decision because it was ignorant of the facts supporting the claimed discrimination,

In considering the use of social media as a hiring tool, therefore, employers must carefully weigh whether the likelihood of gleaning useful information that is legally usable is outweighed by the likelihood of learning information that is not lawful to use and thereby eliminating a possible defense to a discrimination lawsuit.

One way of avoiding this problem and still mining social media is to create a "Chinese Wall" between the person reviewing an applicant’s social media pages and the employment decision-maker, with the former giving to the latter only permissible information. This can be accomplished internally, but many employers elect to engage a third party to conduct background investigations. In that case, the employer should have a carefully crafted agreement with the vendor limiting the employer’s liability and providing indemnification, requiring the vendor to abide by privacy settings and user agreements when accessing social media sites, requiring that the report not include inappropriate information gleaned from social media and, above all, assuring accuracy in the report.

Although no statute requires an employer to inform an applicant that the employer will search social media as part of its background investigation, employers who conduct investigations through a credit-reporting agency need to consider the applicability of several federal statutes, at least one of which requires an applicant’s written authorization for certain forms of investigation and imposes notification obligations on employers when an adverse employment decision is premised on the background check. These statutes include the Fair Credit Reporting Act, Fair and Accurate Credit Transactions Act, Fair Credit Billing Act and the Fair Debt Collection Practices Act.

Managing, Disciplining and Discharging Employees

As with applicants, reviewing employee social media is a double-edged sword. An adverse employment decision made after an employer has done so runs the risk of being challenged as discriminatory if the social media contained information that lawfully may not be considered in making the adverse decision.

On the other hand, employers have legitimate interests in learning things such as whether their employees are disclosing the employer’s confidential information, are harassing or bullying co-workers, are revealing information that brings into question an employee’s claimed need for FMLA leave or ADA accommodation, or are disparaging the company or its goods and services.

In this last area, employers must exercise caution in disciplining or retaliating against employees who voice concern or complain about the company’s wages or working conditions in their social media. The National Labor Relations Act, which applies to both union and non-union employers, permits employees to engage in concerted action regarding terms and conditions of employment. Prohibiting employees from discussing such things in social media or taking adverse action for doing so could constitute an unfair labor practice. Even requiring employees to deal "respectfully" with such issues in their social media likely would be considered by the NLRB as an unfair labor practice.

Employers understandably wish to know and, in some cases, might have an obligation to be aware of what employees say in social media about co-workers and about the employer’s goods, services, finances and future plans. Employers can be held liable for unfair trade practices or breach of federal securities and financial disclosure laws based on an employee’s social media comments if the employee can be deemed to have spoken on behalf of the employer. Accordingly, any social media policy should limit who speaks on behalf of the company and require other employees to include disclaimers when discussing the company. Similarly, employers are obligated to provide a safe workplace, free from harassment that would be in violation of anti-discrimination laws. Employee social media pages can be a valuable source of information for employers conducting an investigation into charges of discrimination. Statutes that prohibit employers from demanding social media passwords carve out exceptions, in some cases very large exceptions, when the employer is conducting such investigations.

Many employers create social media sites for their employees as a marketing tool. Questions arise as to whether the employee or employer owns those sites and the information contained on them, who determines, controls and updates that information and the employer’s obligation to change or take down a site when an employee leaves. This is an area of law for which there are few clear answers at this time. Employers are wise, however, to have a policy statement in this regard; it is better still to provide for it in an employment agreement.

Communicating With the Public

Social media can be a valuable and, in some instances, an indispensible tool for marketing and communicating with customers, suppliers, shareholders and the public at large. As in the employment context, employers must be cognizant of risks in using social medial for these purposes.

False claims about either the employer’s products and services or those of a competitor can spawn litigation for trade defamation or unfair competition, both under the Lanham Act and at common law.

In a similar vein, a seemingly innocuous congratulatory post by one employee acknowledging another employee’s accomplishment in securing significant new business for a publicly traded company can cause the employer to violate the securities laws. Regulation FD requires companies to distribute material information in a manner calculated to give the general public simultaneous access to material information. Limited disclosure of material information via social media can result in charges of insider trading.

Likewise, the financial services industry is subject to regulations that require companies to maintain a record of communications with customers. Social media sites do not have native archiving capability. Companies in that industry should establish a social media policy that takes account of this archiving obligation.

As with most new inventions, use of social media can be both a blessing and a curse. To better assure the blessings and avoid the curse, employers should adopt a well-thought-out social media policy designed to meet each particular company’s needs and goals. Although this is an area where one size does not fit all, every good social media policy, at a minimum, should:

• Inform employees of the employer’s expectations regarding what may and may not be posted.

• Prohibit harassing, bullying, defaming and discriminatory postings.

• Permit only authorized spokespersons to make claims about the employer or competitor’s products and services and use the employer’s trade or service marks.

• Require non-authorized employees discussing the employer to disclaim that they speak for the employer.

• Inform employees of the employer’s legal obligations as they relate to the use of social media.

• Advise employees of potential consequences for violation of the policy. •

Robert W. Small is a partner in the labor and employment and corporate and business services groups in Reger Rizzo and Darnall’s Philadelphia office. For more than 30 years, he has counseled individuals and businesses with regard to business matters, including employment law, transactional matters and business succession planning and has litigated those matters in state and federal court.