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Social media: New issues for business (part 1)

Social media is a relatively new field, and the law is just beginning to catch up with all the issues that are being raised for businesses.

Here’s a quick checklist of concerns. It’s by no means exhaustive, which is why a thorough legal review of a company’s social media practices is always a good idea.

Do you look at employees’ (or job applicants’) personal social media accounts? These days, many employers want to keep tabs on their workers’ social media presence. Employers want to get out ahead of problems, such as employees bad-mouthing the company on Twitter or posting confidential information on Facebook.

In addition, in one recent survey, 39% of businesses said they check their job applicants’ social media accounts before making a hiring decision – and of those, 43% said they had rejected someone because of something they found.

However, there’s a legal minefield here. Suppose a manager’s social media snooping reveals something private about the employee – perhaps that the employee is gay, or a Muslim, or disabled, or over 40, or has a family member with a disease that will affect the company’s health care premiums. Once the company is aware of this information, it will be much harder to prove later that any action taken against the employee wasn’t motivated by discrimination.

Of course, some information is no doubt relevant – you surely want to know if a customer service worker has racist attitudes, or if someone who drives for work has a drinking problem. But you might want to hire a third party to conduct a social media search for you, and only report information that’s truly pertinent.

Have you trademarked your handle? Consider a recent case in which the Beer Exchange, a bar and grill in Kalamazoo, Michigan, sued Bexio, LLC, which operates an online network that allows beer connoisseurs to trade rare brews.

The bar and grill uses the handle “@thebeerexchange” for all its social media. Bexio generally uses the handle “@thebeerexchangeapp,” except that it used “@thebeerexchange” on Instagram – which allegedly resulted in many customers getting confused and posting to the wrong place.

Handles and usernames have become a big part of business marketing, and it’s critical to make sure you have safeguarded the legal rights to yours.

Are you running a social media contest? The Federal Trade Commission is cracking down on contests that require people to post a testimonial, add a photo on Pinterest, retweet something, or “like” a Facebook page. The problem is that this could be deceptive marketing if someone sees a like or a retweet and doesn’t realize the poster had a financial incentive to create it.

Most recently, the FTC announced that if a contest has a designated hashtag, the hashtag must make extremely clear that a contest exists. For example, “#AcmeWidgetSweepstakes” would be okay – but “#AcmeWidgetSweeps” is not clear enough, the FTC says.

Keep in mind, too, that you must publish all the contest rules, just as you would for contests outside the social media realm.

In the next installment we will outline additional social media issues that are being raised for businesses.

Image courtesy of isophere at

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