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					       HYATT & WEBER, P.A.


RISKS ASSOCIATED WITH
    SOCIAL MEDIA &
 POLICIES TO PROTECT
    YOUR COMPANY

            By: Stephen B. Stern
            (410) 260-6585
            (301) 261-8550
            sstern@hwlaw.com
            www.hwlaw.com
       What is Social Media?

Merriam – Webster defines “social media” as:

   Forms of electronic communication (as
   websites for social networking and micro
   blogging) through which users create online
   communities to share information, ideas,
   personal messages, and other content (as
   videos)
    Examples of Social Media
Facebook                      YouTube

Twitter                       LinkedIn

MySpace                       Google+

Spotify                       Photobucket

Over 1,000 social networks


Blogs – e.g., www.giantfanman.blogspot.com
       Risks With Social Media
   Damage reputation

   Liability

   Disclosure of confidential information

   Disputes/uncertainty regarding ownership

   Cost of monitoring, updating

   Lost productivity
 Risks With Social Media - Hiring
Recent survey (October 2011) of 300 hiring professional/managers
    conducted by social media monitoring service Reppler revealed
    that 91% of employers used social networking sites to screen
    applicants

69% of respondents claimed to have rejected a candidate because of
    something seen on a social networking site

47% of employers said they check social networking sites upon
    receiving job application

    76% check Facebook

    53% check Twitter

    48% check LinkedIn

68% of employers said they hired a candidate based on something
    seen on a social networking site
    Risks With Social Media - Hiring
              Fair Credit Reporting Act
                 (“FCRA”) compliance
                 required when a credit
                 reporting agency is involved


Potential discrimination claims
    Federal, state, and local law
    Risks With Social Media - Discrimination

    Sexual harassment
    Discrimination based on race, sex,
     age, other protected characteristic
    Even if use of social media alone
     does not constitute actionable discrimination,
     social media may contain evidence that is relevant
     to discrimination claim
    Potential benefit when defending claims (e.g.,
     disability, workers compensation)
         A trial court in New York recently held that Facebook and
          MySpace content posted by the claimant had to be produced in
          a case where the plaintiff claimed that she suffered an injury
          that confined her to her home and she had posted pictures of
          her smiling and outside her home – Romano v. Steelcase, Inc.
    Risks With Social Media – Privacy Concerns

     Electronic Communications Privacy Act

     Stored Communicators Act

     Similar wire tapping statutes

     Common law invasion of privacy

     Computer Fraud and Abuse Act

     State statutes may protect off-duty conduct – e.g., New York
      statute protects legal “recreational activities”
May an employer require an employee to provide passwords/access
to a member only website/chat group where membership is by
invitation only?
      Pietrylo v. Hillstone Restaurant Group d/b/a Houston’s, Civil No.
      06-5754 (FSH), 2009 WL 3128420 (D.N.J. Sept. 25, 2009)
    Risks With Social Media – NLRA Issues

Not limited to union environments –
standard is protected concerted activity
    Examples of protected concerted activity
        Working conditions
        Compensation issues
        Criticizing management/company

    Examples that are not protected concerted activity
        Disclosing confidential information
        False statements/defamation
        Unlawful harassment/discrimination
Risks With Social Media – NLRA Issues
American Medical Response of Connecticut, Inc.

Employer policy prohibited employees from engaging in “lude or
discourteous behavior” and “offensive conduct” among other things

Employee posted negative comments about her supervisor on Facebook
(including calling her supervisor a “scumbag”); many employees
responded favorably and with additional negative comments

Employee was suspended and later terminated

Policy found overbroad and interfered with Section 7 rights

Employee found to engage in protected concerted activity because
comment was in the context of supervisor’s request for an incident report
regarding a customer complaint and subsequent refusal to grant
employee’s request for a union representative
Risks With Social Media – NLRA Issues
Hispanics United of Buffalo, Inc.
Nonprofit organization provides social services to low-income clients
Employee posted following on Facebook: “Lydia Cruz, a coworker feels that we
don’t help our clients enough at HUB. I about had it! My fellow coworkers how do
you feel?”
One employee responded: “What the f*** Try doing my job I have 5 programs”
Another employee responded: “What the Hell, we don’t have a life as is, What else
can we do???”
Another employee responded: “Tell her to come do my f***ing job n c if I don’t do
enough, this is just dum”
There were many other responses
Employees (five total) were terminated for the posts three days later on the
grounds that the posts constituted bullying and harassment in violation of HUB’s
policy on harassment. One employee (the supervisors secretary) was not
terminated, even though she participated in the posts.
ALJ found that the Facebook postings constituted protective concerted activity
because the posts discussed the terms and conditions of employment in that they
responded to criticism by a coworker regarding the manner in which the
employees performed their jobs.
Risks With Social Media – Other Claims

   Defamation
   Consumer protection claims (e.g., false
    advertising)
   Copyright infringement
   Trademark infringement
   Violation of regulation (varies by industry)
   Bad press (not necessarily claim)
 Risks With Social Media – Document Retention
                    Issues

 Preserving evidence
  Duty to preserve evidence, including
  electronically stored information (ESI),
  arises
  “When the party has notice
  that the evidence is relevant
  to litigation or when a party
  should have known that the
  evidence may be relevant to
  future litigation.”
  Zubulake v. UBS Warburg LLC,
  220 F.R.D. 212 (S.D.N.Y. 2003)
 Risks With Social Media – Document Retention
                    Issues
Scope of the Duty to Preserve Evidence
When the duty to preserve is triggered, a company must
suspend its routine document retention/destruction policy and
put in place a “litigation hold”

This does NOT mean the company must retain EVERY
e-mail and other DOCUMENT in its possession

Only those documents (including electronic versions) that the
company knows or reasonably should know are relevant to the
(anticipated) litigation

Those documents that are reasonably calculated to lead to the
discovery of admissible evidence and that are reasonably likely to
be requested during discovery
Risks With Social Media – Document Retention
                   Issues

Litigation Hold

 Company sponsored
  social media sites

 Social media accounts updated by
  employees (whether at work or on
  personal time – both could be relevant)
 Risks With Social Media – Document Retention
                    Issues

Industry Regulations
 Financial Industry Regulatory Authority (“FINRA”) Notice 10-06

      Requires member firms to monitor and archive business-related
       communications made on social media

 What if employee recommends a security through social media? Does
  that trigger compliance with suitability requirements under NASD Rule
  2310?

 FIINRA recommends prohibiting employees from recommending
  specific investment products or posting a link to such a
  recommendation through any “interactive electronic communication”
  unless a registered principal has approved the content

 Other FINRA issues concerning interactive electronic communication
    Risks With Social Media – Trade Secret and
        Other Intellectual Property Issues

Customer list concerns
   Sasqua Group, Inc. v. Courtney, CV 10-528
    (ADS) (AKT), 2010 WL 3613855 (E.D.N.Y.
    Aug. 2, 2010)

       Employer executive search
        firm contended customer
        list is a trade secret
       Former employee demonstrated how the
        information was easily ascertained through
        LinkedIn, Facebook, and Bloomberg
       Employee obtained profession, position/title,
        contact information, even resumes/bios of
        individuals
    Risks With Social Media – Trade Secret and
        Other Intellectual Property Issues
Can an employee violate a non-compete or non-
solicitation agreement via LinkedIn?
   One recent lawsuit alleged an employee sent LinkedIn
    invites to employee of former firm in violation of a non-
    solicitation provision

   Enhanced Network Solutions Group, Inc. v. Hypersonic
    Technologies, Inc. 951 N.E. 2d 265 (Ind. Ct. App. 2011)
    – court found company that posted job with a LinkedIn
    Group where employee of other company was a
    member did not constitute “soliciting or inducing” in
    violation of parties’ no-hire agreement; rather the
    employee solicited the hiring company after seeing the
    job post
     Risks With Social Media – Trade Secret and
         Other Intellectual Property Issues
Who owns Twitter or LinkedIn accounts?
 Phonedog v. Kravitz (N.D. Cal.) - Phonedog claims former employee
  converted and misappropriated trade secret (a Twitter account and
  its password) and tortiously interfered with existing and potential
  followers and advertisers when employee changed Twitter account
  he used while employed to an account with his name


 Eagle v. Morgan (E.D. Pa.) – co-founder of company was terminated;
  new executives of company changed her LinkedIn password so she
  could not access account; new CEO continued to use her bio as her
  own and used her contacts; former employee alleges violations of
  CFAA, Lanham Act, identity theft, misappropriation of identity,
  conversion, tortious interference, and other claims and company
  has asserted counterclaims (many of which were dismissed) based
  on its claim that it invested resources to develop and maintain the
  account
    Risks With Social Media – Practice Pointers

Some Specific Items To Consider:
     Do you want to limit the time or place that employees can use
      social media?
     Do you want to prohibit certain content – e.g., trade secrets
      and other confidential information, content/postings that would
      violate any applicable law?
     Do you want to review all business-related content before it is
      posted?
     Do you want to claim an ownership interest in employee pages
      (e.g., LinkedIn accounts/contacts)?
     Do you want to train employees on appropriate content and on
      policies and practices?
     Who at the company will be responsible for
      monitoring/policing? Department specific? Particular
      employee? No one?
     Do you want to prohibit employees from linking a personal
      blog or networking site to the company site?
    Risks With Social Media – Practice Pointers

Some Specific Items To Consider (cont.):
    Do you want to prohibit employees from promoting/selling
     company products on personal blogs or networking sites?
    Do you want to prohibit employees from posting on personal blogs
     or networking sites photos of company employees, vendors,
     customers, or company events?
    Do you want to limit instances in which employees can identify
     themselves as company employees?
        If employees identify with the company, do they
          need to give disclaimers when posting certain
          content on personal blogs or networking sites?
    Do you want to get signed acknowledgement forms from
     employees regarding social media policies?
    Policies that prohibit any disparaging comments about the
     company or co-workers may be found overbroad under the NLRA
Risks With Social Media – Practice Pointers

Strategy - develop a comprehensive social media strategy
Ownership - identify company material
Control – what do you need/want to control?
Initiate change – policies and practices likely will need changes
Act on violations - discipline
Limit time for employee use and content
Monitor - ensure compliance and your interests are protected
Educate - train your employees
Do not think one size fits all
Implement policies and practice that meet your company’s needs
Acknowledgment and Authorization forms
                          Stephen B. Stern
                          Hyatt & Weber, P.A., 200 Westgate Circle, Suite 500, Annapolis, MD 21401
                          phone: (410) 260-6585; fax: (410) 841-5065; email: sstern@hwlaw.com




                        Stephen Stern is a partner in the firm’s employment, insurance, and commercial litigation
                        practices.
In connection with his employment practice, Mr. Stern helps employers minimize exposure to liability by developing and
implementing effective employment policies and practices. In this regard, he advises employers on strategic matters, such as
trade secret protection programs, non-compete, non-solicitation, and confidentiality agreements, wage and hour practices,
privacy issues, independent contractor arrangements, employee handbooks, and document retention practices. In addition, he
advises employers on issues that arise on a day-to-day basis, such as leave requests, employee discipline, accommodations
for individuals with disabilities, and termination decisions. Mr. Stern also conducts training seminars and investigations into
allegations of misconduct. When litigation has been required, Mr. Stern has successfully represented clients in federal and
state courts and before federal, state, and local administrative agencies, including the EEOC and Department of Labor. His
cases have involved claims under Title VII, ADEA, ADA, FLSA, FMLA, SOX, and similar state statutes. In addition, he has
litigated numerous trade secret claims and cases involving non-compete, non-solicitation, and confidentiality agreements, and
related tort claims.

Mr. Stern also litigates a variety of other contract, tort, and statutory claims. In this regard, Mr. Stern has litigated matters
involving consumer protection claims, bank loans, real estate, ownership interests in privately-held companies, unfair
competition, fraud, commercial contracts, mass torts, professional discipline, false imprisonment, and civil rights violations.


In addition to his law practice, Mr. Stern is involved in community activities, such as B’nai B’rith International, for which he
serves on the Executive Committee and Board of Governors. Through B’nai B’rith, Mr. Stern attends embassy events and
policy conferences and he travels to foreign countries to meet with government leaders and members of various communities,
among other things.
                        Stephen B. Stern
                        Hyatt & Weber, P.A., 200 Westgate Circle, Suite 500, Annapolis, MD 21401
                        phone: (410) 260-6585; fax: (410) 841-5065; email: sstern@hwlaw.com



                                                        Presentations and Speaking Engagements
                                                        “Guidelines for Conducting Effective Investigations,” Anne Arundel Society for Human
                                                            Resource Management (February 16, 2012)
Publications
                                                        “Top 5 Employment Issues That Keep HR Managers Awake at Night,”
"Strategies for Analyzing and Responding to Sarbanes-       Montgomery County SHRM Professional Development Seminar (May 5, 2011)
Oxley Whistleblower Claims," Chapter in "Complying      “Conducting Effective Investigations,” Washington Metro Industry Liaison Group
With Sarbanes-Oxley's Whistleblower Provisions,"            (April 28, 2011)
Aspatore Books (2009)                                   “Strategies and Legal Considerations When Conducting Investigations,” Northern
                                                            Virginia SHRM (February 15, 2011)
“Pleading a Sarbanes-Oxley Act Whistleblower Claim:
                                                        “Strategies for Wage & Hour Compliance: How to Avoid the Wave of Wage &
What is Required to Survive?,” The Labor Lawyer
(Fall 2007)                                                  Hour Litigation,” Northern Virginia SHRM (June 15, 2010)
                                                        “Guidelines for Conducting Effective Workplace Investigations,” Montgomery
“Employers Need to Be Aware of the Various Laws,             County SHRM (March 17, 2010)
Regulations and Common Duties that Govern               “Navigating Compliance with the ADA,” 6th Annual Maryland SHRM State
Apprenticeship Programs,” Human Resource                     Conference (December 7, 2009)
Executive, Legal Primer (January 25, 2006)
                                                        "How to Protect Your Company in an Economic Downturn," Montgomery County
                                                             SHRM Professional Development Seminar (May 13, 2009)
“Supreme Court Rules On Evidentiary Matters
Involving Mixed-Motive Employment Discrimination        “HR’s Role in Protecting Intellectual Property and Confidential Information,”
Cases,” FindLaw Corporate Counsel Center, (in                5th Annual Maryland SHRM State Conference (December 4, 2008)
summary) National Law Journal (September 2003),         “Summary of Intellectual Property Law Basics” and Expanded Seminar,
Corporate Counsel (October 2003)                             Motorcycle Industry Council’s Annual Meeting (February 15, 2008)
                                                        “Harassment Prevention,” American Correctional Association Winter Conference
“Legal Risks of Electronic Surveillance in the
                                                             2008 (January 16, 2008)
Workplace,” Maryland Bar Journal (February 1, 2002)
                                                        “Compensation Plans: Identifying Potential Liability for Maryland Employers,”
“Revisiting the 8/80 Rule: Drawbacks and Perk,”              2007 Maryland SHRM State Conference (December 4, 2007)
Baltimore Business Journal (April 1, 2000)              “Protecting Trade Secrets and Other Confidential Information,” 2007 Virginia
                                                             State SHRM Conference (October 3, 2007)

				
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