By STEPHEN C. CLARKE, assistant vice president of the Commercial Multi-Line Division at Jersey City, N.J.-based ISO; and JEFF DE TURRIS, assistant vice president of the ISO Personal Lines Division
We've all seen examples of social media put to good use. U.S. government agencies, for instance, have set up pages on various social media sites to field questions about the oil-spill cleanup effort in the Gulf. In New Delhi, India, traffic police have started a social media networking page so residents can post pictures of their fellow drivers violating traffic laws.
Businesses are attracted to social networking sites because they are magnets for consumers. Successfully leveraging this new communication technology provides an opportunity to reach mass markets at a fraction of the cost of traditional media outlets and can generate buzz no advertising dollar could ever buy. Facebook announced it now has 500 million registered users.
As with any high-reward potential, though, significant risk can develop if an organization doesn't understand the pitfalls and carefully outline its social media policy and procedures. Plenty is at stake, including confidential and personal information, copyright infringement, allegations of libel/slander, trade secrets and public perception
Case law regarding potential social media liability continues to develop. It's safe to say we are only in the infancy of the potential litigation concerning social media. Yet recent legal developments can help guide employers in its efforts to manage social media liabilities.
Historically, traditional media outlets receive some leeway under the banner of journalism shield laws. The availability of social media and the use of it by family-run, local businesses to Wall Street giants are testing the boundaries of those laws. At what point does journalism become advocacy or criticism?
In Too Much Media LLC v. Hale, a New Jersey appeals court ruled that a blogger was not entitled to protection because she was not working as a journalist at the time of her offending comments.
What does this case mean for organizations and their social media programs? The organization must be willing to clearly identify authors, sources and sponsors of information that it posts on social media sites. The organization must also know what role the post is playing--e.g., editorial, news item, advertisement or customer feedback. This is critical to protect an organization's goodwill and standing with the public. Using false identification to promote a cause can have severe repercussions.
Recognition of consumer protection regulations and protecting against libel/slander of individuals and competitors are critical components of a sound policy. The key is enforcing the policy. Employers could better defend their actions of monitoring employees' electronic mail if notice is given that the network is solely for business use and subject to employer monitoring.
And what's on the horizon? Information acquired through social media--such as inappropriate pictures, foul language, and comments directed toward certain groups or affiliations--could be used as evidence to attack someone's credibility as a witness, expert, defendant or litigant.
PRIVACY VS. PROTECTION
Some guidance regarding employer privacy issues was recently provided by the U.S. Supreme Court in its review of The City of Ontario, California v. Quon.
The case concerns the issue of privacy when it comes to texting on a workplace device. The court found that a city audit of a governmental employee's text messages on a city-owned pager was a reasonable search under the Fourth Amendment. The city initially conducted the search in its efforts to determine if city employees in general needed a higher number of minutes on their pagers. Justice Kennedy, in writing the decision for the unanimous high court, stated that the city's search did not violate the Fourth Amendment to the U.S. Constitution, which guards against unreasonable searches and seizures. The court found that the search was motivated by a legitimate work-related purpose of ensuring that employees were not being forced to pay out of their own pockets for work-related expenses, or that the city was not paying for extensive personal communications. The court also found the search was not excessive in scope.
Quon had been informed that the city's written policy on e-mail usage, which warned employees that they should have no expectation of privacy and their usage would be monitored, also applied to text messages. Even though the case involved a public employee, employment lawyers have said this ruling underscores the need for organizations to establish a social media policy in private work settings. The court in Quon did suggest that the case applies to the private sector by concluding that the search would be "regarded as reasonable and normal in the private-employer context."
Any organization looking to harness the power of social media must understand the potential for negative consequences and address them through sound guidelines and policies. Without strict policies in place, employees could unwittingly, or deliberately, signal the marketplace (and competitors) about upcoming product plans, problems with existing products or internal debates over business models.
It's important that employees are trained to be careful and not divulge confidential company information. Don't necessarily let the most technologically savvy kid be the one to manage your company social media sites, because he or she may not have the professional experience required for the role. Don't be fooled by the "publish now, think later" dynamic inherent in social media.
Identity theft is also a concern. Recently, a security researcher released personal information scanned from more than 100 million people's social media accounts. Even though the information was freely available from the social media site's own public directory and other online search engines, it was reproduced in a format that could easily be used by others attempting to compile a user's e-mail address, location or other personal information he or she made available. It is important to ensure that any employees using social media sites to promote company business understand how privacy settings can be changed to protect posted information and content.
Also, be aware that the younger generation has an expectation of incorporating social media, texting and on-line communications into their daily routine, Employers should clearly address expectations regarding such usage. In Stengart v. Loving Care Agency, the N.J. Supreme Court ruled that an employer should not have reviewed e-mails a former employee wrote using a private, password-protected Web account even though she sent them from her company computer. The court also noted the agency's policy regarding e-mail use was too vague.
Be mindful of lost productivity, resource limitations and your company's IT bandwidth capabilities, which may not be able to handle the size of some of the videos and pictures that employees might download. And think about the potential for viruses and malware.
In the future, social media issues will become clearer as they are addressed through the courts and through legislation and regulations. Insurers must recognize customers are increasingly exposed to social media risk. They should determine how best to address such exposure from an insurance coverage perspective--whether by expanding traditional media-outlet policies, directors' and officers' liability coverages, or cyber risk products. The demand is there.
Meanwhile, a sound enterprisewide social media policy will ensure a positive experience and minimize potential risk as long as it spells out expectations and responsibilities; defines acceptable uses; respects copyright, fair use and financial disclosure rules; identifies intended targets and potential risks; and separates opinion from fact.
September 17, 2010
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