As of October 2012, there were over one billion active users on Facebook. Although the stock of Facebook has experienced a roller-coaster ride, which has mostly been on the first steep downhill part of the track, the slide probably says little about the future of Facebook and social media. Technology and innovation behind social media are experiencing a rapid rate of change, and the law usually lags, but an understanding of legal issues is important to avoid liability. Here's what business owners need to know to avoid legal traps in social media.

User vs. provider

On a simplistic level, there are two ways to approach social media from a legal perspective. One is from the perspective of the user and the other is from the perspective of the provider of social media. Bloggers and users of social media need to be concerned about liability for what they are posting, and providers of social media portals—including businesses—need to be concerned about potential liability for simply making the social media vehicle available.

Original content or else

When posting content on social media, or in any other environment, there are some basic rules to follow. All content should be original to the person (or company) posting, or there should be a license to post the content. Original works, including text, graphics and photos, are protectable under copyright law. Except in limited circumstances, the owner must grant permission to use or post the content; failure to obtain permission constitutes infringement. Granting attribution, or identifying the owner of the content, is not sufficient for compliance with copyright law. Although it is easy to rationalize that no damages could possibly flow from a blog or other post, statutory damages of up to $150,000 in the case of willful infringement are available.

Angry post: Sleep on it

Social media has a tendency to encourage informality. Informality can lead to negative consequences. Posting without thinking or posting when angry or frustrated can be problematic. Although anger is not a concern legally, the words that fly in angry posts can be. Posting untrue statements that damage the reputation of another may be actionable and lead to liability. The solution is less legal and more practical. Never post when angry or frustrated. Instead, create the post and let it sit overnight. Hopefully a little time will soften some of the words and reduce the risk of potential liability. Another possible result of speaking before thinking is the disclosure of trade secrets or other confidential information. Again, thoughtful time before posting can prevent big problems later.

Screening employees online

Employers as users of social media have a great resource for conducting background checks. Unfortunately, potential employees sometimes are not very wise in what they post, and careless or frivolous posts can lead to employers making employment decisions based in part on those posts. However, there are limits on what information employers may use. Just as an employer is limited in what questions may be asked in an employment interview, the scope of information found through social media that an employer may use is also limited. Any information that is prohibited in an interview, but is available online, may not be used in hiring decisions. To be safe, employers should have at least two people involved in the process: one person to retrieve and screen information available through social media and a second person to use the screened information in making the employment decision.

Social media use policy a must

Employers also face issues arising from employee use of social media, both on employer time and employee time. Although an employee may be posting on Facebook or tweeting on his/her own time, the employee may be clearly associated with the employer. Employee posts can reflect on the employer. In addition, employee time spent posting on the job may be desired by employers to increase exposure of the company, or the employer may determine that social media on the job is prohibited. For these and several other reasons, employers should have social media use policies.

Businesses and other providers of social media can find themselves facing many of the same issues as users of social media. There are safe harbors to avoid liability for copyright infringement, defamation and other claims, but steps need to be taken to take advantage of such protections.

Social media is alive and well and proper use can provide significant business and personal benefits.

ABOUT JOHN H. REES
John is a business lawyer working with clients to develop strategies and solutions for complex legal challenges and managing legal risk, particularly for matters involving software and database licensing and SaaS, doing business in an online environment, building value in brands and protecting trademarks, appropriate use, licensing, and protection of copyrights, and complex business transactions, including corporate and real estate lending. John is a frequent lecturer and enjoys educating and training clients on how to solve their legal problems. Follow John at jhrees.com.