Social Media: A New Set of Corporate Legal Landmines?

14 10 2010

We often talk to clients about the use of social media in the business-to-business marketing realm. There’s no question, social media can be a powerful set of new tools to engage and build relationships with potential customers. The upside potential for connecting with customers is astronomical, but there is also some downside risk of the legal variety.

And even if your business has not yet jumped into using social media sites like Facebook, Twitter and LinkedIn, the use of social media by your employees could already be creating unexpected legal issues for your company.

Considering that Facebook alone has more than 500 million users (if it were a country it would be the third most-populated in the world), and that it is only one of thousands of social networking sites, it’s a given that some of your employees are using social media. And if they’re using it on the job or talking about your company, they could cost your business big bucks without even trying!

How? Here are a few examples where social media can cause concerns:

  • If any of your employees are checking social media sites like Facebook to learn more about job candidates without their advance permission (HR issue)
  • If any of your employees are posting comments on social sites or blogs  and endorse your company or products without disclosing their relationship with your company (FTC issue)
  • If any of your employees are using social media to talk about work, to complain about other employees or customers, or to discuss internal company concerns or policies (confidentiality issue).

How do you minimize the risk of social media use to your company? According to Steve Pallazzolo, an attorney with Warner, Norcross & Judd ( who recently spoke at the Marketing in the 21st Century 2.0 seminar, you start by putting a social media policy in place.

This policy doesn’t have to be 30 pages long, Steve says, but it should at least:

  • Be written, understandable, distributed to employees and implemented
  • Include standards of conduct (do’s and don’ts)
  • Require employees to disclose material connections when endorsing
  • Require employees to acknowledge they understand the policy
  • Provide for notification of any training or monitoring that will be conducted, and
  • Specify the consequences for violations of the policy.

Now, I’m no legal expert. For help, talk to your company’s labor and employment law counsel – or contact us for a referral to a qualified law firm.

But I do recognize that, as Steve noted in his talk, there is a whole generation of people who will reveal almost any detail of their private life (personal or business)  on the web without a second thought. And if you don’t think that poses a problem, think about the young Israeli serviceman who posted information on his Facebook page about a planned secret military raid (see the CNN story: 

Most employees mean well. So most social media transgressions by employees are unintentional – but when all is said and done, the lack of intent does not reduce the potential damage to your company.

What will reduce your risk is the implementation of a corporate social media policy … one that will help your employees avoid such unintentional mistakes, protect confidential information and demonstrate your company’s commitment to abide by the law … while still enabling your company to harness the power of these popular new communication tools.

Fore-warned is fore-armed. For more info on social media policies, see our eNewsletter: “71 Percent of Companies Don’t! Should Your Company Have a Social Media Policy?” (


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