December 15, 2021

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    Facebook, Twitter, Instagram, LinkedIn – the internet has a wonderful array of platforms that can be used to educate, entertain and to market your business. Social media can promote your products and services. It can drive recruitment, broaden your networking, and build brand awareness...However, as with all things in life, there is of course, another side to the story…

    Naysayers will tell you that social media is melting our brains, making us all depressed and subliminally telling us to buy Apple products… But even the greatest fan of social media will acknowledge that, without a heavy dose of caution, it can also pose some very real risks that could have a big impact on your business.

    Some social media risks are hard for businesses to avoid, such as hackers, but we have identified 4 legal issues that fall more under your umbrella of control.


    1. A confidential information leak

    At Law 365, we see NDAs (Non-Disclosure Agreements) every day. The main principle of the NDA contract is not to tell the other party’s secrets. Sometimes (against our liking) these NDAs come with promises to pay (indemnities) in the event of a breach of confidentiality.

    But are you aware what constitutes a breach?

    Here are two examples to chew on.

    Suppose a member of your team posts on social media “had a great day working with X company”? – Uh oh, that’s a breach of contract, you could be liable to pay! Okay, most companies would probably let that slide, but the bigger the entity, the higher the stakes.

    Your team needs to be aware that even seemingly innocent social posts can have dire consequences. For example, imagine you are about to release a new product of your own unique design onto the market. Everybody has been working very hard and are pleased with the creation. In the excitement, a member of staff posts a picture of it on social media before it’s been officially launched. “Look at my awesome work,” they announce proudly on social channels…Argh! Now your competitors now know what you’re up to and you lose the edge in the market!

    This happened in November 2014 when the previous CFO of Twitter Anthony Noto (of all people) accidentally tweeted highly confidential information about an upcoming merger.

    “I still think we should buy them. He is on your schedule for Dec 15 or 16 - we will need to sell him. I have a plan."

    He no longer works for Twitter…

    2. Are you infringing on someone else’s Intellectual Property?

    We had an interesting discussion in the office the other day about the use of “memes”. They can be great fun to ping to each other in private, for general laughs and banter – but, we wondered, could they be used to market the business in a playful way?

    There are Apps that allow the use of certain recognisable images for personal use. But if you intend to use an image for business endeavours, you must pay for the right to use them. This extends to music you add to any promo videos.

    One of the most famous memes of all times is Grumpy Cat (if you haven’t seen this guy just type it in to your search engine now, we will wait). Because of its popularity, the owners started Grumpy Cat Limited and own the rights to the image, name and meme. In 2015 they successfully sued Grenade Beverage for $700,000 for using the meme to market their “Grumppuccino”.

    The best way to protect yourself from this is to remain in control of what is posted online on behalf of your company. Make sure that everyone responsible for the business social media accounts knows the rules and ensures that all content posted online belongs to your company or has been properly purchased.

    3. What’s your liability for staff posting on social media?

    All too often we see hurtful or inappropriate content on social media. We would all hope that this behaviour never comes from a friend, colleague, or employee. However, if an employee has posted derogatory content on social media, the employer could be held vicariously liable.

    The Carphone Warehouse

    In 2012 two employees for The Carphone Warehouse stole their manager's iPhone and posted “Finally came out of the closet. I am gay and proud” on his Facebook wall. The manager, Mr Otomewo, eventually filed a claim against The Carphone Warehouse for sexual orientation harassment. The Carphone Warehouse was found vicariously liable for the Facebook post because the employees posted in the course of their employment.

    Forbes vs LHR Airport

    A case arose called Forbes vs LHR Airport. An employee posted racist content on Facebook, that led to a complaint from a colleague, Mr Forbes. The offender was given a warning but Mr Forbes made a claim against his employer (LHR Airport) on the grounds of harassment, discrimination and victimisation. The court decided that LHR Airport was not liable in this case because the offender:

    • had not posted while at work, on a work device or during work hours had shared the image in a private group on Facebook
    • had not mentioned Mr Forbes or LHR Airport in any way.

    In this case, the employer escaped liability because the employee acted outside the course of their employment.

    4. Loss of Reputation

    Embarrassing photos? We all have them! Occasionally, they surface on social media and for a few minutes you become the butt of the joke, people forget about it in a minute or two, hopefully…

    But when the embarrassed party is a business, people are less likely to forget. You’ve spent years building your company’s reputation, and reputations can be lost far quicker than they are made. Employers and employees must be super careful that they don’t jeopardise the company image online and show the business in a bad light for customers to see. Certainly, don’t post embarrassing photos while wearing the company logo!

    In 2009, the famous pizza chain Dominos faced its toughest social media crisis, when two rogue employees posted videos on the internet of them spoiling food before it went out for delivery. In the space of 6 hours the term “disgusting dominos” had 3000+ hits on google search.

    How can employers minimise the risks?

    Companies must insure they have an effective social media policy in place, one that is thorough and ensures staff use social media with caution and are mindful of its influence on not only their reputation, but their employer’s. Of course, a policy is only as good as its enforcement. Policies should be reviewed periodically and be enforced systematically with effective disciplinary procedures.

    As for negative and harmful behaviour online, much of this may seem out of an employers’ control, however by providing training on tolerance and implementing further policies on subjects like Anti-Harassment and Bullying, and Equality, Diversity and Inclusivity. It is worth taking stock of the practices and documents you currently have in place to make sure they work together for the betterment of your workplace and the business.

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    Our mission is to help you succeed, with less risk.

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