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12/30/2016 | General

                Entrepreneurial risk comes in all shapes and sizes. In today’s age of seemingly limitless technological advancements, businesses of all types and sizes must use social media to stay connected to their potential and existing customers.   However, the old maxim “can’t live with it, can’t live without it” is particularly applicable to social media.

                Attorneys (and I speak from experience) always look forward to new laws, the overhaul of existing laws and new trends in the law. The new and unknown tend to result in confusion and the need for interpretation, which attorneys are ready to provide. Who better to provide guidance since most legislation is written by lawyers working for politicians who are frequently lawyers themselves.

                The dramatic rise in the business application of social media has resulted in a new wave of risk for start-ups and entrepreneurs in particular. For example, in March of this year, a National Labor Relations Board judge ruled that the Chipotle chain kept in place an unlawful social media code of conduct and used it to improperly force an employee to delete certain posts on his Twitter account that shined light on adverse working conditions. James Kennedy, an employee at a Havertown, Pennsylvania location, had been compelled by Chipotle to delete tweets critical of certain employment conditions and practices.

                The Chipotle case may be particularly distressing to you for several reasons. Perhaps your company has no social media policy. Strike one. Perhaps you have a social media policy but you have no idea whether it comports with applicable law. Strike two. Perhaps your own marketing efforts actual violate your own social media policy or worse yet, regulations promulgated by the Federal Trade Commission. Strike three.

                While these issues may seem intimidating, the concepts are usually easily understood. The problem is that lawyers tend to be risk averse, and by delegating all authority over social media policy to a lawyer, you may compromise your business objectives. Nonetheless, here are some of the more important risks to consider:

  • Don’t over-promise, embellish or exaggerate in your social media. Precisely what constitutes fraud is often in the eye of the beholder. An entrepreneur should not risk being sued for fraud under any circumstance, leaving the ultimate decision in the hands of a judge or jury. To make matters worse, fraud may also lead to action by the Federal Trade Commission and the federal government is one difficult opponent.        
  • Lastly, you probably know that you can be sued for the social media misdeeds of your employees. Specifically, you could be held responsible for an employee’s defamatory, discriminatory, or harassing social media message, comment, or tweet. You could be sued if your employee leaks sensitive customer information or improperly uses your intellectual property and trade secrets. These risks exist regardless of whether the employee commits the offense at the office or at home using their personal social media accounts. So you’ve got to be really careful about who you hire.
  • Speaking of hiring, you could be sued under a legal theory of negligent hiring if you don’t search applicants on social media before hiring them. Your business could therefore be sued if you don’t spend a few minutes checking out your potential employees’ online behavior. But a word of caution. Businesses who search applicants on social media before hiring them are also exposed to legal risks. Federal anti-discrimination laws make it illegal for your business to base any hiring decision on someone’s age, race, color, national origin, sex, religion, disability, sexual preference, medical history, or veteran status. The moment you view an applicant’s Facebook profile, you become exposed to their personal information. Failing to hire someone after being exposed to this information can get your company sued for employment discrimination and defense costs and potential damages can be significant.

                What can or should you do, given all of these risks. A social media risk assessment is a good place to start. A social media risk assessment will help your business identify social media legal risks with employees, hiring, human resources, marketing, technology, and everywhere else. Once that assessment is complete, your business must implement social media policies and compliance procedures. Lastly, everyone in your company must receive social media training.

                It really isn’t that complicated. You simply need to invest a little bit of time (and a few dollars) now, before you find yourself mired in a social media lawsuit or investigation that cripples your business. Happy tweeting!