HYATT & WEBER, P.A.
LEGAL ASPECTS OF
SOCIAL MEDIA
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
Twitter
YouTube
Pinterest
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
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 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 supervisor’s 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
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 – 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 – 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 nonsolicitation agreement via LinkedIn?

One recent lawsuit alleged an employee sent LinkedIn
invites to employee of former firm in violation of a nonsolicitation 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: Balt: (410) 260-6585 D.C.: (301) 261-8550; 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, and mass torts, among other things.
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, policy
conferences, and he meets with government leaders, among other things. Mr. Stern also serves as outside General Counsel for
the West Anne Arundel County Chamber of Commerce, and in that capacity is an ex officio member of the Executive
Committee and Board of Directors.
Stephen B. Stern
Hyatt & Weber, P.A., 200 Westgate Circle, Suite 500, Annapolis, MD 21401
phone: Balt: (410) 260-6585 D.C.: (301) 261-8550; fax: (410) 841-5065; email: sstern@hwlaw.com
Presentations and Speaking Engagements
Publications
"Strategies for Analyzing and Responding to SarbanesOxley Whistleblower Claims," Chapter in "Complying
With Sarbanes-Oxley's Whistleblower Provisions,"
Aspatore Books (2009)
“Pleading a Sarbanes-Oxley Act Whistleblower Claim:
What is Required to Survive?,” The Labor Lawyer
(Fall 2007)
“Employers Need to Be Aware of the Various Laws,
Regulations and Common Duties that Govern
Apprenticeship Programs,” Human Resource
Executive, Legal Primer (January 25, 2006)
“Supreme Court Rules On Evidentiary Matters
Involving Mixed-Motive Employment Discrimination
Cases,” FindLaw Corporate Counsel Center, (in
summary) National Law Journal (September 2003),
Corporate Counsel (October 2003)
“Legal Risks of Electronic Surveillance in the
Workplace,” Maryland Bar Journal (February 1, 2002)
“Revisiting the 8/80 Rule: Drawbacks and Perk,”
Baltimore Business Journal (April 1, 2000)
“How to Protect Trade Secrets and Other Important Information,” AACC Symposium
(February 15, 2013)
“Developing A Trade Secret or Other Forms of Intellectual Property,” Annapolis
Economic Development Corporation (May 16, 2012)
“Energy Audit & Retrofit Contract Legalities & Pittfalls,” ACI National Home Performance
Conference (March 29, 2012)
“Risks Associated with Social Media,” BASE Business Initiative (March 22, 2012)
“Guidelines for Conducting Effective Investigations,” Anne Arundel Society for Human
Resource Management (February 16, 2012)
“Top 5 Employment Issues That Keep HR Managers Awake at Night,”
Montgomery County SHRM Professional Development Seminar (May 5, 2011)
“Conducting Effective Investigations,” Washington Metro Industry Liaison Group
(April 28, 2011)
“Strategies and Legal Considerations When Conducting Investigations,” Northern
Virginia SHRM (February 15, 2011)
“Strategies for Wage & Hour Compliance: How to Avoid the Wave of Wage &
Hour Litigation,” Northern Virginia SHRM (June 15, 2010)
“Guidelines for Conducting Effective Workplace Investigations,” Montgomery
County SHRM (March 17, 2010)
“Navigating Compliance with the ADA,” 6th Annual Maryland SHRM State
Conference (December 7, 2009)
"How to Protect Your Company in an Economic Downturn," Montgomery County
SHRM Professional Development Seminar (May 13, 2009)
“HR’s Role in Protecting Intellectual Property and Confidential Information,”
5th Annual Maryland SHRM State Conference (December 4, 2008)
“Summary of Intellectual Property Law Basics” and Expanded Seminar,
Motorcycle Industry Council’s Annual Meeting (February 15, 2008)
“Harassment Prevention,” American Correctional Association Winter Conference
2008 (January 16, 2008)