Web-based and social media marketing are vital to successfully growing a business today.  The importance is highlighted by the fact that three of ten classes offered this year by the Business Education Series Training (BEST) of the Jefferson County Business Resource Center focus on aspects of web-based and social media marketing.

Despite all the information available about how to leverage social media to market your business, there is generally less focus on how to manage the risks associated with online activity.  A white paper issued by the Insurance Information Institute outlines the most common risks and liability faced by companies associated with social media.  For example, the author points out that businesses may be legally liable for things like deceptive advertising, cyberstalking, defamation, improper use of intellectual property, violation of privacy, and security breaches.  A hot topic recently has been employer liability for use of social media in hiring and firing decisions.

Liability may also arise when employees use social media to post inappropriate information such as private customer data or trade secrets of competitors.  As we all know, this kind of action by employees may be inadvertent.  Regardless, the trend is increasingly toward lawsuits and regulatory enforcement actions.

Despite the increasing risks to businesses, an October 2011 report by DLA Piper, found that a surprisingly small number of businesses had social media policies.  Like any other situation where your employees or agents can create liability for your company, limiting social media liability starts with the basics: create a policy, train, and then monitor compliance.

What goes into your social media policy should vary significantly depending on the nature of your business and what information your employees may have access to.  Hundreds of examples are available online, for example, on the Social Media Governance page.

At a minimum, an effective social media policy will explain what social media employees may use, how and when; distinguish between professional and private use of social media; establish standards for responding to clients and the public; and clarify privacy and security expectations.  In a nutshell, a good policy will empower your employees, protect your brand and your intellectual property, while limiting your liability.
If you have questions about developing a social media policy for your business, please contact our Business Law Group partner, David A. Closson at [email protected].

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