Angry about the delay in delivery of this holiday season’s hottest game system, your top sales person logs into your electronic store’s Twitter account and posts:

ABC Trucking Co. is terrible! They do not deliver anything on time and it is costing me sales! If you want on time delivery, use another service.

As the business owner, are you concerned about ABC Trucking Co.’s reaction to this post?  Will you be sued?  Does it matter that you did not give your employee permission to post the Tweet?  What if he used his personal Twitter account to voice his frustration, or his personal smart phone?  What if he posted it after work on his personal Facebook page?  Would it matter if he proudly identifies himself to his Facebook friends as your store’s top salesperson? What if he bought a real twitter followers?

With the increase in lawsuits resulting from content posted on social media websites, businesses must consider the issues and potential liability raised by this hypothetical.  The most common legal claims include allegations of defamation, libel, copyright infringement, and invasion of privacy.  Because employers are vicariously liable for their employees’ conduct, at least when that conduct occurs during the course and scope of their employment, many businesses are implementing social media policies to minimize the risk of such claims.  With the increasing popularity of social media — particularly Facebook, Twitter, LinkedIn, and blogs — there are simple steps every business should take to avoid legal action as a result of its employees’ social media use. 

Step 1.  Appreciate that social media is here to stay.  Prohibiting the use of social media altogether may be impossible, even at work, where many smart phones allow access to social networking sites.  A complete ban may also alienate employees and limit business opportunities.  Because social networking is here to stay, a better option is to implement a policy governing employees’ use of it. 

Step 2.  Designate someone to take charge of your social media policy.  Business owners who do not personally engage in or understand social media must designate a trusted person, or group of people, who understands not only how social media works, but also the potential legal liabilities for its misuse.  Of course, the necessity and scope of social media policies will depend on many factors, including the size of the business, the type of product or service offered, and the extent to which the business utilizes social media for marketing and communicating with customers.  Businesses should consider consulting with counsel at an early stage to assist in this process.      

Step 3.  Determine whether your current employee policies can be amended, or if a more specific social media policy is needed.  Once one is charged with the responsibility of reducing the risk of social media liability, a clear policy can be created.  Many businesses already have an employee code of conduct, and a social media policy may simply be an extension of the guidelines already in place.  In such a case, the current policy can be amended and the employees advised that the company’s expectations of employee conduct extend to their social media use. 

In other scenarios, a policy directed at social media may need to be more substantive.  Certainly the risk of claims is greater for larger companies, and those businesses that support and encourage their employees’ utilization of social networking as part of their marketing plans.  In these cases, a more detailed policy may need to be developed.    

Step 4.  Know what to include in your social media policy.  A sound social media policy should include a number of fundamental elements.  For example, employees should understand that the intellectual property laws that prohibit the unauthorized use of another’s work typically apply to social media.  The social media policy therefore should state that all employees must give others proper credit for their work, and obtain permission to use something before it is published.  Blogs pose a unique liability issue in this respect because they commonly permit third parties to post comments, which can include the unauthorized use of protected materials.  The Digital Millennium Copyright Act (“DMCA”) protects against such unknowing infringements.  It requires a takedown policy and a registered agent with the U.S. Copyright Office to receive complaints of alleged copyright or trademark infringements.  Therefore, a business may avoid liability under the DMCA if someone else has posted copyrighted video, for example, in a comment to a company blog.       

Social media policies should also provide clear guidance about what can or cannot be stated about third parties — particularly the businesses’ competitors, customers, clients, and vendors.  This policy may extend to an employee’s personal social media sites where that employee has indicated on the site that he works for a particular business.  Policies should inform all employees that if they choose to reveal their employer on their personal social media accounts, they should also indicate that all statements are the employee’s personal views, and do not represent those of the company.  Notably, the Communications Decency Act protects social media users from defamation claims where the statement is merely a quote from someone else.  So, for example, if an employee unknowingly reposts a defamatory statement on the company’s Facebook page, there would be no liability as long as the employee attributed the statement to the original author. 

Step 5. Train employees about the policy.  Once a social media policy is in place, it must be communicated to all employees.  Training on social media use and the affects of the policy are recommended.  It must also be enforced by trusted individuals and updated as necessary.  In addition, by establishing a clear process by which social media posts are reviewed, businesses reduce the risk of dissemination of a potentially problematic communication.

Step 6.  Consider social media use in your risk management program.  Because mistakes happen, and claims resulting from social media use are an emerging phenomenon, social media must be considered in every businesses’ risk management program.  Some claims will not be covered by a general liability insurance policy and many insurance companies have created special coverage endorsements and stand alone policies to fill this coverage gap.  Counsel can help you review your present policy and determine whether it effectively covers you for social media claims.    

These simple tips can help businesses safely utilize social media for what it was designed to do:  generate business, communicate with clients and customers, and exchange information with the world. 

Reprinted with permission from February 2011 edition of News You Can Use, thinkBIG Innovative Design and Marketing. To view article in the original newsletter, click here