Law | 05/03/2012
by Ruth Binger, Principal - Danna McKitrick PC
In construction you take calculated risks every day. Best case scenario, you are aware of the negatives and they are accounted for in your daily decisions. A less obvious, yet just as serious, risk facing you today is due to the explosive growth of technology, especially as it relates to Internet use and social media. Risk management in this area means protection from external and internal threats: cyber pirates, competitors, untrained or malicious employees, and independent contractors.
Here are critical best practices for addressing these threats:
1. Engage Skilled Employees and Third Party Social Media Evangelists. Social media is a highly combustible marketing tool that has only come into its own in the last eight years with the birth of Facebook. Everything posted on the Internet is searchable (think Google), with over 2 billion people now using the Internet.
a. By publishing on the Internet, your agents or employees create a permanent record with instantaneous and worldwide dissemination that is searchable by your customers, your competitors and the government. Employees or third parties who are charged to utilize these web-based platforms as advertising tools must possess judgment and business acumen.
b. Liability claims can be brought against your company for defamation, copyright, trademark law, trade secret law, right of publicity, publication of private facts and intrusion into seclusion. The key is to hire trained and experienced employees or third party vendors to conduct your social media campaigns.
2. Amend Employment Manuals and Policies. Create a separate social media policy for marketing staff, HR staff, and all employees.
a. Marketing staff need to know the many rules regarding advertising, including the Federal Trade Commission rules for full disclosure for endorsements and company- controlled blog posts, customer privacy, and intellectual property protection.
b. Human Resources staff training should include the following information:
i. Personnel should avoid even unintentional use of using protected status information (e.g. race, sex, disability or genetic discrimination information) in recruiting and background searching.
ii. Familiarity with National Labor Relations Board (NLRB) rules on personal social media use and communication of protected work-related information is essential. Job-griping by employees - union and non-union - is not necessarily a cause for termination or discipline.
iii. Employers should not ask for employees' or prospects' social media passwords.
3. Create a Computer Use Policy. Educate employees so they don't mix personal and work lives.
a. Educate employees that they leave electronic footprints on the hard drives of company computers and smartphones when they check their personal email/social media accounts.
b. Implement and publicize a policy that employees have no right to privacy with respect to their use of company computers, email systems and Internet connections.
c. Require employees to acknowledge that all information created, stored, received or transmitted on or by any system or device provided by the company is owned by the company. State in your policies that the company has the right to monitor, access, search, inspect, and read all information stored on its servers, including accessing private emails and social media sites.
4. Keep Your Valuable Trade Secrets in Your Vault. Take your trade secrets off your server.
a. To protect loss of your intellectual property and trade secrets, remove them from the grasp of cyber pirates. The law protects those who exercise self-help.
b. Once a secret is posted on the Internet, it is not, by definition, protectable. The greater problem with the Internet is that most companies don't suspect that their security is breached until it is too late and market share is lost.
5. Amend Employment Agreements. Business social media accounts are the new public Rolodex of customer relationships, and that capital has value to your competitors.
a. If you have employees that are paid to establish a LinkedIn presence or a Twitter account on your company's behalf, add your ownership of the accounts to your Employment Agreements.
b. A growing body of law is developing that allows employers to claim ownership in social media business accounts where the employer paid the employee to create, maintain and operate the account.
6. Smartphone Security. There are 1 billion smartphones in the world, and within the next decade 6 billion people will have constant connection to the Internet. It is the Wild West.
a. Work with your IT staff to avoid being electronically naked.
b. Lost smartphones are a hacker's dream because it is so easy to break into the devices and leapfrog onto company networks.
Right now social media is at its height but it will change given that it is designed for websites and the world is moving to smartphones. The only thing constant with technology is change and effective adaption. Use social media wisely.
Ruth Binger is the department head of Danna McKitrick P.C.'s transactional practice group which includes mergers and acquisition transactions, tax, employment, banking, real estate finance, international law, securities, business and commercial law, and dispute resolution. Ruth advises family-owned and closely-held businesses and multinational companies in many industries, including manufacturing and distribution, professional services including web development and software development, transportation and retail.