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Saving Your Company From a Social Media Nightmare

Facebook has more than 1 billion users worldwide. Twitter processes more than 340 million tweets per day. What is the liability for your company? Are you liable for postings made from employees’ own devices? Can you legally access your employees’ social media sites or base hiring and firing decisions on them?

“Social Media in the Workplace: Litigation Risks and Insurance Coverage” — a RIMS 2013 session — covered these critical issues. Presenting on the topic were:

  • Karen Bachman, director, risk management and privacy for Shire Pharmaceuticals

  • Max Perkins, underwriter, specialty lines for Beazley Group

  • Joann Lytle, partner, McCarter & English, LLP

What is social media? According to Merriam-Webster, it’s:

Forms of electronic communication (as Web sites for social networking and microblogging) through which users create online communities to share information, ideas, personal messages, and other content (as videos)

“It’s basically what we have done for years in terms of networking and interfacing but it’s now in an electronic format that moves at the speed of sound and speed of light,” said Perkins.”It can be scary at times but can also be used to your benefit.”By now, most of us are aware of the reasons why companies use social media, including:

  • marketing

  • customer service

  • market research

  • hiring

But what are the concerns?

  • Privacy “What if someone makes a mistake and mentions a patient’s health history,” asked Perkins. “How is your HR team using social media? Are they able to do that legally?”

  • The speed and ease of communication lead people to make impulsive, ill-considered comments

  • Permanent record

But alas, as the speakers pointed out, there are resources available to organizations that wish to manage the risks of social media? They can:

  • Draft a social media use policy

  • Require employee training

  • Monitor social media use

  • Purchase insurance “It’s not all there right now, it’s still developing,” said Perkins.

Joann Lytle used an interesting, real-world example. A health clinic employee disclosed the contents of a patient’s medical file, including the fact that the patient had a sexually transmitted disease from a sexual partner other than her husband. Another employe created a MySpace page with picture of the patient and disclosed the contents of her medical file, disclosing she has an STD. Though the page was only up for a few days, it was enough for a legal case against Fairview (Yath vs Fairview Clinic).

It seems like it would be a cut and dry case, ending in Yath’s favor.But that’s not what happened.

Fairview had a policy prohibiting the use of social media at work. Technical evidence demonstrated that the MySpace page was not created at the employer’s place of business.

“It really saved Fairview,” said Lytle. “They did the right thing and took the right steps. If any of the factors were different, it could’ve been a huge liability.

How should a company respond to a potentially damaging post? “This is the kind of thing you should be planning for in advance,” said Bachman

  • Take full responsibility — in social media, it’s impossible to run and hide

  • Make no excuses — stick to clarifying an incident — stick with real data

  • Respond immediately 

  • Do not get into an ongoing conversation with other posters — you’re just going to get deeper and deeper into trouble with no way to dig yourself out

We only need to look at LinkedIn’s Top 5 Corporate Twitter Disasters of 2012 to understand how a simple mistake or an irate employee can cause a media nightmare.Companies can establish a framework to manage risk these risks, however. Aside from monitoring and training, companies can purchase media content liability coverage, including:

  • Defamation, libel, slander, infringement of copyright

  • Infringement of domain name, trademark, trade name, trade dress

  • Plagiarism, piracy, misappropriation of ideas under an implied contract

  • Invasion or interference with an individual’s right to privacy

“One thing to think about is where your culture is within the organization,” said Perkins. “Do you have a cultural awareness of what social media is?”

Risk Management Magazine and Risk Management Monitor. Copyright 2022 Risk and Insurance Management Society, Inc. All rights reserved.National Law Review, Volume III, Number 118

About this Author


Emily Holbrook is the editor of Risk Management magazine and the Risk Management Monitor blog.