World Social Media Legal News Roundup

Law professor says social media can pose legal problems in Courtroom
Winnipeg Free Press
SASKATOON – The dean of law at the University of Saskatchewan says using social media can have negative consequences in the Courtroom – Business – Winnipeg Free Press.

Eight Ways Your Employee Social-Media Policy May Violate Federal law
AdAge.com (blog)
All employees have certain rights under federal law that social-media policies can’t restrict.

New Law to Force Identification of Trolls Set to be Unveiled
Technorati
Home / Social Media / Articles / New Law to Force Identification of Troll. … is behind the attacks on them online without having to resort to expensive legal action.

A blue wave of change Cleveland County law enforcers join move toward social media alerts
Norman Transcript
Lauri Stevens, a social media strategist at LAwS Communications, a Boston-area company, said law enforcement agencies nationwide are beginning to embrace social media.

Social media helped, hurt in hunt for suspect in triple shooting
Washington Post
Social media at times was a help, other times a hindrance in the search and eventual arrest of a suspect in the triple fatal shooting at an Alabama apartment complex.

Use social media, but use it responsibly, UAE conference hears
gulfnews.com
He said, “We do not monitor social media networks. People have the freedom to speak within the legal framework. There is no law specifically for twitter, but …

Police: Street gangs embrace social media, too
Kansas.com
Beard gave a presentation on gangs, the Internet and social media at last week’s Midwest Law Enforcement Conference on Gangs and Drugs, held in Wichita.

And…don’t forget to check out my presentation on the Law & Social Data panel at #TechWeek Chicago 2012.

The past few years have witnessed an explosion of legal and regulatory activity involving social and other new media. This session will examine several key areas, including copyright, trademark and related intellectual property concerns; defamation, obscenity and related liability; false advertising and marketing restrictions; gaming; data privacy issues presented by social media; and impacts of social media on employees and the workplace. Attendees will learn how to identify legal risks and issues before they become full-scale emergencies and how to develop appropriate policies and guidelines covering social media activity.

If you can’t make it, check out the Slideshare presentation here.

Regulated Industries – Social Media Legal & Regulatory Compliance

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For the past year and a half, I have been traveling to various conferences around the country to speak on Legal and Regulatory compliance in social media. In the beginning, case law and regulatory guidance was scarce and little information was available to provide businesses engaged in social media with a roadmap for Social Media Legal and Regulatory compliance. However, a lot has changed over the last year and a clear trend is emerging. Industry regulators are aware of the use – and abuse – of social media by their members. This article examines recent guidance provided by the Federal Trade Commission (FTC), the Food & Drug Administration (FDA), the National Labor Relations Board (NLRB), the Financial Industry Regulatory Authority (FINRA) and the Securities Exchange Commission (SEC).

Social Media in Marketing, Advertising & Commerce.

The FTC has a prime directive to protect consumers. In the social media sphere, the FTC has pursued this mandate by enforcing companies’ Terms of Use and privacy policies. In addition, the FTC has recently issued updated guidance for companies and individuals that review, promote, advertise or otherwise write about various products and services. In 2009, the FTC tackled its first social media case, an investigation involving Twitter. The focus of the FTC action was Twitter’s privacy policy that asserted A concern about safeguarding confidentiality of personally identifiable information and privacy settings designed to designate tweets as private.

The settlement, first announced in June 2010, resolved charges that Twitter deceived consumers and put their privacy at risk by failing to safeguard their personal information. Lapses in the Twitter’s data security allowed hackers to obtain unauthorized administrative control of Twitter, including both access to non-public user information and tweets that consumers had designated as private, and the ability to send out phony tweets from any account. Under the terms of the settlement, Twitter has hit ended and ongoing obligations concerning consumers and the extent to which it protects the security, privacy, and confidentiality of nonpublic consumer information, including the measures it takes to prevent unauthorized access to nonpublic information and honor the privacy choices made by consumers.

In a similar action, the FTC settled and investigation into Facebook,the leading social media platform/service. The social networking service agreed to settle Federal Trade Commission charges that it deceived consumers by telling them they could keep their information on Facebook private, and then repeatedly allowing it to be shared and made public. The settlement requires Facebook to take several steps to make sure it lives up to its promises in the future, including giving consumers clear and prominent notice and obtaining consumers’ express consent before their information is shared beyond the privacy settings they have established.

Read the FTC update here.

As recently as January 10, 2012, the FTC reached a settlement with UPromise, Inc., stemming from charges that the company – a membership reward service – allegedly used a web-browser toolbar to collect consumers’ personal information, without adequately disclosing the extent of personal information collected. The FTC found that the toolbar was collecting the names of all websites visited by its users as well as information entered into web pages by those users, including user names, passwords, credit card numbers, social security numbers and other financial and/or sensitive data. Furthermore, this data was transmitted in unencrypted, clear text that could be intercepted or viewed by third parties in a WiFi environment. The result? UPromise had to destroy all data it collected under the “Personalized Offers” feature of its “TurboSaver” toolbar in addition to other obligations related to data collection practices and consent to collection of personal information.

Other Industry Guidance.

In October 2009, the Federal Trade Commission released it’s updated “FTC’s Guides Concerning the Use of Endorsements and Testimonials in Advertising.” The updated Guides contain two notable areas of concern for marketers. First, the Guides removed the safe harbor for advertisements featuring a consumer’s experience with a product or service, the so-called “results not typical” disclosure. Second, the FTC Guides underscored the longstanding principle of disclosing “material connections” between advertisers and the consumers, experts, organizations, and celebrities providing reviews and endorsements of products and services.

For concise guidance on when, how and what to disclose, see my article here.

Social Media in the Healthcare & Pharmaceutical Industries.

Like other consumer-oriented industries, Pharmaceutical and Biotech firms are rapidly expanding their presence online. This growth over the past several years has not gone unnoticed as evidenced by FDA Warning Letters targeting marketing campaigns “broadcast” via websites and social media platforms. The FDA also provides more general guidance for the industry. Policy and guidance development for promotion of FDA-regulated medical products using the Internet and social media tools are available in the FDA’s Consumer-Directed Broadcast Advertisements Questions and Answers. While this document provides clear direction for traditional media broadcasting , it only skims the surface regarding web content.

Social Media in the Workplace.

Probably no other federal agency has been as active as the NLRB in recent months. The NLRB has a mandate to protect employees rights to organize and discuss working conditions without fear of reprisals from employers. On August 8, 2011, the Associate General Counsel for the NLRB released a memo entitled “Report of the Acting General Counsel Concerning Social Media Cases.The report began by analyzing a case of first impression: whether an Employer unlawfully discharged five employees who had posted comments on Facebook relating to allegations of poor job performance previously expressed by one of their coworkers.

On January 25, 2012, the NLRB released a second report describing social media cases handled by the NLRB. The “Operations Management Memo” available here, covers 14 cases, half of which involve questions about employer social media policies. Five of those policies were found to be unlawfully broad, one was lawful, and one was found to be lawful after it was revised.

The remaining cases involved discharges of employees after they posted comments to Facebook. Several discharges were found to be unlawful because they flowed from unlawful policies. But in one case, the discharge was upheld despite an unlawful policy because the employee’s posting was not work-related. The report underscores two main points made in an earlier compilation of cases: 1) policies should not sweep so broadly that they prohibit the kinds of activity protected by federal labor law, such as the discussion of wages or working conditions among employees; and 2) an employee’s comments on social media are generally not protected if they are mere gripes not made in relation to group activity among employees.

Social Media and the Financial Services Industry.

From the Madoff scandal, to the Occupy Wall Street Movement, to Mitt Romney’s tax returns, the financial services sector is accustomed to the scrutiny and ire of the public and government regulators. Therefore it is no surprise that on January 4, 2012, the SEC’s Office of Compliance Inspections and Examinations, in coordination with other SEC staff, including in the Division of Enforcement’s Asset Management Unit and the Division of Investment Management, issued its “Investment Adviser Use of Social Media” paper. The paper begins by observing that although “many firms have policies and procedures within their compliance programs” governing use of social media” there is wide “variation in the form and substance of the policies and procedures.” The staff noted that many firms have multiple overlapping procedures that apply to advertisements, client communications or electronic communications generally, which may or may not specifically include social media use. Such lack of specificity may cause confusion as to what procedures or standards apply to social media use.

The SEC paper suggests that the following factors are relevant to determining the effectiveness of a Social Media compliance program:

  • Usage Guidelines
  • Content Standards
  • Monitoring
  • Frequency of Monitoring
  • Approval of Content
  • Firm Resources
  • Criteria for Approving Participation
  • Training
  • Certification
  • Functionality of web sites and updates thereto
  • Personal/Professional sites
  • Information security
  • Enterprise-wide web site content cross collateralization

Similarly, the Financial Industry Regulatory Authority (FINRA) has issued guidance for secutires brokerage firms. According to its web site, FINRA “is the largest independent regulator for all securities firms doing business in the United States.” FINRA protects American investors by ensuring fairness and honesty in the securities industry. In January 2010, FINRA issued Regulatory Notice 10-06, providing guidance on the application of FINRA rules governing communications with the public to social media sites and reminding firms of the recordkeeping, suitability, supervision and content requirements for such communications. Since its publication, firms have raised additional questions regarding the application of the rules. Key take aways from FINRA’s guidance include the flowing:

  • Brokerages have supervisory and record keeping obligations based on the content of the communications – whether it is business related – and not the media
  • Broker-dealers must track and supervise messages that deal with business
  • Firms must have systems in place to supervise and retain interactions with customers, if they are made through personal mobile devices
  • A broker must get approval from the firm if she mentions her employer on a social media site
  • Pre-approval for instant messages, also known as “unscripted interactions’ in legalese, is not necessary as long as supervisors are informed after the fact

Conclusion.

Many professionals in regulated industries are eager to leverage social media to market and communicate with existing and prospective clients and to increase their visibility. However, participants must ensure compliance with all of the regulatory requirements and awareness of the risks associated with using various forms of social media. Hopefully, the guidance outlined above can serve as a good starting point for discussions about how best to use of social media as well as suggestions regarding factors that firms may wish to consider is helpful to firms in strengthening their compliance and risk management programs. We invite you to contact us with comments and requests about how we can help you educate your employees, prevent fraud, monitor risk, and promote compliance. We can be reached at lsglegal.com866-734-256, @adlerlaw and dadler@lsglegal.com.

NLRB Raising Profile of Social Media in the Workplace

According to the National Labor Relations Board, the Thomson Reuters Corp. Social Media policy may be violating federal law. At issue is the company’s Twitter policy. The NLRB maintains that it improperly restricts an employee’s right to use Twitter to discuss working conditions with co-workers.

According to the Newspaper Guild, a labor union representing Reuters employees, Reuters publicly disciplined reporter Deborah Zabarenko for posting a Twitter message that said, “One way to make this the best place to work is to deal honestly with Guild members.” The NLRB is taking the position that Reuters policy impairs employees’ rights to discuss working conditions and that it applied the policy improperly.

This marks the second case initiated by the NLRB involving a company’s social media policy.

In the first case arising last October, American Medical Response of Connecticut Inc. allegedly violated labor law when it terminated an employee allegedly for criticizing her boss on Facebook.

The significance of these cases should be clear to any business. First, it is important to have a Social Media policy in place. More importantly, however, Social Media policies need to be written with legal and regulatory compliance in mind. An overly retractive Social Media policy or one that penalizes employees for expressing protected speech will result in legal liability.