The Real Cost of a Social Media Misstep

Money by Andrew Magill from Flickr (Creative Commons License)

Money by Andrew Magill from Flickr (Creative Commons License)

I was talking with some non-lawyer entrepreneurs lately, and I asked them what they thought would be the worst case scenario if their company broke the law via their social media, and they both responded that they would have to take responsibility for their mistake, apologize, and do some damage control. While I appreciate that these business owners appeared to have integrity and good intentions, I internally cringed that they both assumed that saying, “I’m sorry,” should be enough to fix a problem.

I want to share some numbers for the costs a business could easily face if they violate a law with their online posts.

Trademark Infringement – Cost of Rebranding
Think about how much time and money you’ve spent selecting the name for your business or product, your logos, your slogans, your domain, and your website. Now, how would you feel if you had to do it all again? That’s what could happen if you select a name for your business or product that’s already been registered by someone else in your industry. In the best case scenario, they’ll send a cease and desist letter and demand that you rebrand. In the worst case scenario, they’ll sue you for infringement, and you could be spending tens of thousands of dollars in legal fees and fines.

This is why I suggest companies check the U.S. Patent and Trademark Database for registered trademarks to verify the name or slogan they want to use hasn’t been claimed by someone else.   I’m also an advocate of registering your trademark as soon as you can afford it, so no one can restrict your use of your own name or steal it from you.

Illegal Social Media Policy – at least $10,000
Every company needs a social media policy, but employers need to understand that a federal law called the National Labor Relations Act (NLRA) that protect union activities also apply to employees talking about their work – even in public online forums. If you fire an employee for violating the company social media policy and it turns out your policy violates the NLRA, you could be ordered by the National Labor Relations Board (NLRB) to pay the ex-employee back wages, damages, and offer them their job back. My friend who works on these cases says if you have to pay the ex-employee $10,000, you got off easy.

Copyright Infringement – $150,000 per Work Copied
Many business owners don’t understand that they can’t use any image they find via a Google Image search. There are even marketing “professionals” who will tell you that you can use any image you find online as long as you give an attribution and a link to the original. Both of these are excellent ways to commit copyright infringement. And photographers are becoming more savvy about protecting their rights so if you use their work they may send you a bill or a lawsuit instead of a cease and desist letter or a takedown notice. In the worst case scenario, you may face a lawsuit for $150,000 per image you used without permission.

Be careful if you outsource your content creation that your contracts clear state that the writer or artist who creates your content also indemnifies you if you are ever accused of copyright infringement because of something they created for your site or posted to your social media.

Defamation – $2,500,000
Defamation generally requires making a false statement about a person to a third party that hurts the person’s reputation. When I do talks about social media horror stories, I talk about a case where a blogger was sued for defamation because of one blog post and was ordered to pay him $2.5 million. 1 blog post. $2.5 million. (The case is currently up on appeal but I don’t think it looks good for her.) This is when little words matter because it’s easy to think you’re stating an opinion but your phrasing creates a statement of a fact – and if it’s a lie, it could be defamatory. Think before you post and check your sources.

ruthcover smallerPlease note, these numbers do not include legal fees you could face in addition to damages if you’re sued because of your social media posts. The legal issues listed above only scratches the surface of what wrongs a person or company can commit online. The good news is most of these problems are preventable with education and diligence. I strongly recommend you stay abreast of what laws apply to your social media postings and developments in this area of law.

If you need a legal resource for laymen on this topic, I recommend my book, The Legal Side of Blogging: How Not to get Sued, Fired, Arrested, or Killed. It covers a lot of the major issues that apply to blogging and social media. If you want to chat more about this topic, feel free to connect with me on TwitterFacebookYouTubeLinkedIn, or you can email me. You can also subscribe to the Carter Law Firm monthly newsletter.
Please visit my homepage for more information about Carter Law Firm.

How to Avoid Being the Next Social Media Horror Story

Be A Social Media Super Hero for your Company - "Super Heros" by 5chw4r7z from Flickr (Creative Commons License)

Be A Social Media Super Hero for your Company – “Super Heros” by 5chw4r7z from Flickr (Creative Commons License)

I had the pleasure of presenting Social Media Horror Stories (and How to Avoid the Same Fate) at the Arizona Technology Council Lunch and Learn this week.  For those of you who weren’t there, I got to tell the stories of major missteps companies and individuals have committed with their social media activities and how to avoid the same mistakes. In every situation, the problems could have been avoided or mitigated with proper education, forethought, and applying common sense.

This is my recommended follow-up plan for attendees:

Register Your Trademarks
To avoid problems with your competition, register the name of your company, products, blog, logo, and/or tagline with the U.S. Patent and Trademark Office. Without registration, the law only protects your right to use your trademarks in your established geographic market (which can be challenging to discern when your business is 100% online). You don’t want to find yourself in the Burger King situation where your market is limited or the Turner Barr situation where your business is essentially shut down because someone else registered your mark.

Before you launch your next company, product, or marketing campaign, be sure to check the Trademark Office’s database to make sure that someone else doesn’t already have the exclusive rights to use your desired trademark.

Check Your Contracts
If you outsource any of your content creation or marketing activities, review your contracts carefully. Look for information about who owns the social media accounts and any content created on your behalf. Also look for provisions that address potential problems and whether you will be indemnified if you’re sued or get in trouble because of something a third party did on your behalf.

Remember that website terms of service are also contracts. Make sure you understand the implications of using a social media platform or web-based service. Your site may also have terms of service that manage your relationships with your users. Make sure they’ve been written to suit your needs.

Be Careful About Copyrights
When a person owns a copyright in text or an image, they have the exclusive right to control where they work is copied, distributed, and displayed. If you want to use their work, you often need to obtain permission or risk being accused of copyright infringement.  I frequently see people pulling images from search engine results without considering the artist’s rights. Many people think they can use whatever they want as long as they give an attribution and link back to the original, and that’s just not true. If you’re looking for images for your site, consider using Creative Commons. I always use images that come with the license that allows me to modify and commercialize the artist’s work.

When it comes to your own copyrights, decide in advance how you want to react when someone steals your work and plan accordingly.

Check Your Social Media Policy
I’m an advocate for the idea that companies should generally leave their employees alone when they’re on their own time, including what they do on social media. However, I’m also a huge proponent of the idea that every company needs a social media policy. Employees need to understand what their dos and don’ts are when it comes to their personal profiles and blogs, and employers need to understand that their social media policy needs to comply with the National Labor Relations Act. If your policy prohibits employees from saying anything damaging about the company online, it’s likely illegal and if you fire someone for violating an illegal policy, you could easily face tens of thousands of dollars in legal fees and damages. This is an area of law that is still developing, so please have  lawyer help you write your policy so it complies with the law.

Review Your Crisis Response Plan
For most companies, the question isn’t if it will face a crisis, but when. Every company should have plans in place for dealing with expected problems, including pre-writing content for the media and social media, so what when an problem occurs, everyone knows what their role and the protocol that everyone will be following. When you’re having your planning sessions, it’s a good idea to have your legal counsel present to assist from a legal perspective.

If you want a resource for you or your staff regarding the legalities of social media, please check out my book, The Legal Side of Blogging: How Not to get Sued, Fired, Arrested, or Killed. If you’re interested in guerilla marketing, my book on Flash Mob Law will be available on Amazon in June 2014.

If you want to talk more about social media law, you can connected with me on TwitterFacebookYouTubeLinkedIn, or you can email me. You can also subscribe to the Carter Law Firm monthly newsletter.
Please visit my homepage for more information about Carter Law Firm.

News Reporter Shea Allen Fired because of her Personal Blog

TV Camera on the grass by Simon Yeo (smjbk) from Flickr

TV Camera on the grass by Simon Yeo (smjbk) from Flickr

Shea Allen was a TV reporter in Alabama who has a personal blog. She was fired after she released a post of “No Apologies: Confessions of a Red Headed Reporter” where she, among other things, admitted she is “frightened of old people,” has “taken naps in the news car,” and that she’ll stop recording if you ramble and she deems you unnecessary for her story but let you think otherwise. You can check of her post for the full list. I’m not sure what to think of her statement that her best sources have secret crushes on her.

Shea’s boss was not impressed and fired her because the post did “irreparable harm to the station’s image.” She did an interview about the situation with Keith Yaskin from The Flip Side Communications and shared her thoughts about what happened here.

Shea doesn’t think that she should have been fired since the alleged inappropriate post appeared on her site where she’s sharing her personal views, and not representing the TV station and because she offered to take the post down once she became aware of her employer’s objections to it.

The First Amendment protects Shea’s right to free expression; however the fact that her statements were not illegal is not enough to keep her boss from firing her, at least if she was an at-will employee. At-will employees can be fired for any legal reason, including the fact that your boss doesn’t like what you posted on your personal blog as long as what you wrote about isn’t protected (i.e., your gender, race, religion, disability, etc.)

Keith hit me up for an off-the-cuff response interview and here’s what I had to say about bloggers like Shea being fired because of their blogs here.

What about the statement that she was just being funny? I believe that was her intent; however blogging gives you a voice but not necessarily a voice tone. You can’t guarantee that what’s funny to you will be seen as such by others, especially when it’s your boss reading about things that you do at work that he/she may frown upon.

I agree with Shea that her situation highlights a “gray area in social media.” It’s because of situations like this that every company needs a social media policy that provides clear dos and don’ts when possible but more importantly provides guidelines for employees when it comes to their online posts, whether they’re using the company’s social media accounts or their own. Companies should remind employees that their posts are permanent and that they should treat each post like a digital billboard that millions of people might see.

I also think that Shea’s confused about the limits of the freedom of speech. It applies to everyone in the U.S., but it doesn’t protect you from all the consequences that may occur because of what you said.

If you want more information on this topic, please check out my newly revised book, The Legal Side of Blogging: How Not to get Sued, Fired, Arrested, or Killed.

You can connect with me on TwitterGoogle+FacebookYouTubeLinkedIn, or you can email me.
You can also subscribe to the Carter Law Firm monthly newsletter.
Please visit my homepage for more information about Carter Law Firm.

Employers Can’t Control Personal SM Accounts

i love my job by peretzpup

i love my job by peretzpup

Last week a friend of mine asked about if employers can require employees to do anything with their social media accounts. Apparently, his friend’s employer asked the employees to change the cover photos and avatars on their Facebook pages to some type of advertising for the company.

If a company wants to be involved in social media, they need to create their own accounts on Facebook, Twitter, and any other site where they want to have a presence. They should also have crystal clear contracts with the employees and/or businesses who manage these accounts that state how they should be used, who will own the intellectual property on the sites, and who will own the accounts and followers if the employee leaves or changes positions or if the company hires another company to manage their social media.

Back to employers telling employees what to do on their personal accounts – your personal Facebook account is your personal property. Your employer can prohibit you from being on your personal accounts during work hours or work computers and they can discipline you for violating your employment contract on it (as long as it doesn’t violate the NLRA). But to require you to promote the company on your personal page? That would be a big “Oh hell no.”

I checked out Facebook’s terms of service and they clearly state you must use Facebook Apps for all promotions and that you will not use “your personal timeline for your own commercial gain (such as selling your status update to an advertiser).” If your employment is contingent on promoting the business on your personal account, I see a valid argument that you essentially sold your part of your timeline to your employer.

On the other hand, companies want their employees to be happy in general and want them to support the product. I see no problem in companies making images available if employees wanted to voluntarily change their profile photos. I think it would be awesome if the company allowed employees to take pictures of themselves with a company mural or sign to use in social media if they were so inclined. This would have to be completely voluntary with no consequences, positive or negative, based on employee participation.

I’m a big proponent of employers leaving employees alone when it comes to their personal time and social media accounts as long as the employees aren’t violating company policies. If you think your employer is asking you to do something questionable with your social media accounts, check the website’s terms of service and consult a social media attorney (like me) in your community.

Feel free to connect with me via TwitterGoogle+Facebook, and LinkedIn, or you can email me.
Please visit my homepage for more information about Carter Law Firm.

How To Start a Business in Arizona

National Geospatial-Intelligence Agency Ribbon Cutting by US Army Corps of Engineers, Carter Law Firm, Ruth Carter

National Geospatial-Intelligence Agency Ribbon Cutting by US Army Corps of Engineers

This week I had two speaking engagements on the basics of starting a business in Arizona. I thought I’d expand my list of tips into the ideal timeline an entrepreneur should follow for setting up their business.

  1. Figure out what type of business you want to have.
  2. Select a name for your business. From a trademark registration perspective, it’s best to pick a name that contains a word or words that don’t already exist. Also be mindful of any business name restrictions that exist in your industry.
  3. Do a search on the U.S. Patent and Trademark Office (USPTO) website to see if someone in a similar business has registered a similar name for their business. If they have, they can prevent you from using your desired trade name. Run a Google search as well to see if someone has a similar name but hasn’t registered it with the USPTO.
  4. Create a business entity by sending the appropriate form and payment to the Arizona Corporation Commission.
  5. Open a bank account for your business. Never use your personal accounts for business expenses or your business accounts for personal expenses.
  6. If you have more than one owner, create an operating agreement. This is a contract that dictates how the company is owned, how you will run your business, and how you will resolve problems. You need this no matter who your partners are, including your spouse and family members.
  7. When you have a business, you have intellectual property – at least copyrights and trademarks, and perhaps trade secrets and patentable ideas. Create an intellectual property strategy to protect these things. This is another time when you should at least buy an hour with a lawyer.
  8. Draft contract templates for documents you will regularly use with vendors and customers. Many business owners get contract templates from the internet. This is an acceptable way to start this project, but you should have a lawyer review them to make sure they are legal and address your needs.
  9. Register your trademark with the USPTO.
  10. If you have employees, you will need employment contracts and an employee handbook that includes a social media policy that complies with the National Labor Relations Act.

Ideally, every new business would have a lawyer to help them set up avoid any legal missteps, but many entrepreneurs can’t afford it. There are a lot of things you can do without a lawyer’s help, but you need to be well-informed about what your’e required to do when going into business for yourself and when it’s worth it to pay for a lawyer (like me).

It’s much easier and cheaper in the long run to consult a lawyer a few times when you’re starting your business than to have to hire one to clean up the mess that can result if you do it the wrong way.

Feel free to connect with me via TwitterGoogle+Facebook, and LinkedIn.
Please visit my homepage for more information about Carter Law Firm.

Ruth Carter’s Speaking Schedule – May 2012

Ignite Phoenix #5 by Sheila Dee

Ignite Phoenix #5 by Sheila Dee

May is going to be an exciting month for me because I have four speaking engagements in Phoenix! I’m really excited to get out and talk about intellectual property and social media law. I like to keep my talks casual, interactive, and provide useful information to the audience.  I hope you’ll come out and have fun with me. Here’s where you can find me . . .

Trademark Basics
Wednesday, May 9, 2012 – 6pm
Midweek Mind Tweak – Co+Hoots
This is an interactive discussion about what a trademark is, the strength of attendees’ trademarks, and the benefit of registering your trademark with the U.S. Patent and Trademark Office.

Why You Need a Social Media Policy
Wednesday, May 16, 2012 – 5pm
Midweek Mind Tweak – Co+Hoots
Every company needs a social media policy for their employees, but if you create one that is too broad, you might have to pay over $10,000 for violating the National Labor Relations Act. It’s a problem that is easy to fix, if you know what the law is.

The Legalities of Blogging
Wednesday, May 23, 2012 – 12pm
GP Brownbag – Gangplank Chandler
A spoke a few weeks ago at Gangplank Academy about the legal side of blogging, and they asked me back to present a condensed version as a brownbag discussion. I’ll be presenting the 8 questions you should ask yourself before you publish a blog post.

Adapting Licensed Properties to Comics
Thursday, May 24, 2012 – 7pm
Phoenix Comicon – Phoenix Convention Center
I’m so excited to speak at Phoenix Comicon. The thought fills my little geek heart with joy. I’m going to be talking with sci-fi and comic book fans about copyright issues related to creating fan fiction, fan art, and slash fiction. It’s going to be so much fun!

I hope I get to see you at one or all of my talks!

How To Respond If An Interviewer Asks For Your Facebook Password

Padlocks by Jon Worth

The news media recently exploded with reports that employers are asking prospective employees for their Facebook passwords. A few years ago, I heard of interviewers asking prospective employees if they could see their Facebook pages. This takes it to a whole new level, and I think it’s disrespectful.

A lot of prospective employees are desperate for work, so I suspect a lot of them are complying with the request. I think a lot of people are shocked by the question and are saying “yes” without fully realizing what they are doing.

If a prospective employer asked for my Facebook password, my first thought would be two choice words (seven letters – you figure it out). Hopefully before those words escaped my lips, I’d temper that thought with something like, “I’m a very private person. I use Facebook to connect with close friends and family. I’d rather not give you that information.” I could follow that up with a statement that all my tweets are public if they want another glimpse into who I am as a person online.

I look at this question like when a police officer asks to look in your bag. They wouldn’t ask the question if they didn’t need your permission. You have the right to say “no” to the cop, just as you have the right to say “no” to prospective employer who asks for your social media passwords.

When a prospective employer asks for your social media passwords, they are opening themselves up for liability. There are a lot of things an employer can’t ask about in an interview, and they can be sued if they make hiring decisions based on things like race, gender, disability, or religion. If they have access to your otherwise privacy protected Facebook page, they may see information like your race, religion, or disability that could influence their hiring decision and put them at risk of getting sued for discrimination.

If anyone asks for your Facebook password, whether it’s your best friend or a prospective employer, the answer is always, “No.” If an employer won’t hire you because you won’t turn over your Facebook password, you don’t want to work for them anyway. A concerted effort from prospective employees pushing back against this question could be enough to make it stop.

UPDATE (3/26/2012): Facebook is warning users not to give their passwords to prospective employers.

You’re Screwed if your Social Media Policy Violates the NLRA

Money by 401K from Flickr

The National Labor Relations Act (NLRA) protects private employees, in particular their rights to “to join together to improve their wages and working conditions, with or without a union,” and it’s enforced by the National Labor Relations Board (NLRB). Employees are allowed to engage in “protected concerted activities,” which includes discussions about wages and work conditions on publicly accessible social media sites.

According to a 2010 survey, nearly 50% of small to medium size businesses don’t have a social media policy, and based on the recent report from the NLRB, I suspect many companies that have social media policies, are in violation of the NLRA. If you’re an employer, you need a social media policy, but it’s critical that it complies with the NLRA.

So, if you fire or discipline an employee based on a social media policy that violates the NLRA, you could be in a world of hurt. Here’s what happens. The employee will file a charge against you with the NLRB. The NLRB will conduct an investigation and have a decision about the merits of the case in 7 to 12 weeks. The NLRB receives 20,000 to 30,000 charges each year.

Here’s the good news – more than 50% of these charges are withdrawn or dismissed.
Here’s the bad news – if the case has merit, you’re probably going to be paying a lot.

If the NLRB decides the case has merit, there’s usually a settlement between the employer and employee – meaning you have to pay the employee for violating their rights. If you can’t come to settlement, the case is decided by an NLRB Administrative Law Judge. The judge may make you provide a remedy to your employee such as giving them backpay and reinstating them in their job.

In 2010, 8,257 cases were decided by NLRB judges. Employers were required to pay over $86 million in backpay and fines. That’s an average of over $10,000 per case! The NLRB judges also required 1,633 employers to offer an unlawfully discharged employee reinstatement of their job – and most of them accepted!

So what’s the worse-case scenario if your social media policy violates the NLRA?

  • You have to pay your unlawfully discharged employee over $10,000 in backpay,
  • Offer them their job back (even though you’d rather they be gone),
  • Fire the person you hired to take the unlawfully discharged person’s place if they accept,
  • Deal with the expense and hassle of an NLRB investigation, and
  • Revise your social media policy so it complies with the NLRA.

If you want to avoid all this financial and professional heartache, make sure your company has a social media policy that’s drafted by an attorney who understands social media and who keeps up with developments from the NLRB. The cost of not doing so is too high.

New Rules for Company Social Media Policies

Snark by Loozrboy

The National Labor Relations Board (NLRB) released an update last week with the latest developments in social media and employment. In a nutshell, this report says that you can say a lot online about your workplace and your employer and not get fired.

The law protects employees when they are engaged in a “protected concerted activity.” This includes discussions for mutual aid and protection about wages and work conditions with co-workers and third parties, statements where you are representing your coworkers or are outgrowths of previous employment discussions, and statements that are intended to induce group action. You can be pretty critical of your employer and/or coworkers without getting fired.

You can still get fired if your posts are defamatory, disparaging, or threatening or are simply gripes or rants.

The unexpected take-away from this report was how hard it is for employers to draft a social media policy that isn’t overly broad or doesn’t impede a protected concerted activity. You could tell that many of the employers in the report were thoughtful about their policy’s verbiage, and it was still found to be unlawful.

Based on the NLRB report, here’s what you can’t do with your company social media policy:

  • Restrict all public statements regarding the company,
  • Prohibit disparaging comments about the company on any media,
  • Prohibit employees from communicating with the media without prior authorization
  • Tell employees to avoid identifying themselves as the company’s employees or require approval to identify themselves as an employee,
  • Require all communications on social media sites to be honest, professional, and appropriate,
  • Prohibit “inappropriate conversations” and “disrespectful conduct,”
  • Prohibit engaging in unprofessional communication that could negatively impact the employer’s reputation,
  • Prohibit the disclosure of “confidential, sensitive, or non-public” information unless you provide examples,
  • Require employees to state on every post that they are stating their opinion and not the employer’s (but it’s ok to require this somewhere on their personal accounts), or
  • Require employees to bring “work-related concerns” to the company first.

The only policy described in the NLRB report that found to be lawful was narrow and specific. It prohibited “the use of social media to post or display comments about coworkers or supervisors or the Employer that are vulgar, obscene, threatening, intimidating, harassing, or a violation of the Employer’s workplace policies against discrimination, harassment, or hostility on account of age, race, religion, sex, ethnicity, nationality, disability, or other protected class, status, or characteristic.”

These policies are hard to write and a lawful one requires the employer to accept that they can’t control what their employees say outside of work and that, in a lot of cases, the employees can voice harsh judgment about the company without being at risk of getting fired as long as it’s a protected concerted activity.