Login Register Subscribe
Current Issue

Social media risks are mitigated by well-crafted internal corporate policies


NEW YORK — Left unmanaged, employees' use of social media can be financially and legally perilous for an organization regardless of whether it is connected to their employers' marketing campaigns or other business operations.

As a result, internal corporate policies governing employee use of social media networks have become an all-but-necessary part of effective risk management strategies, experts say.

Even without any malicious intent, an employee's social media activity could result in accusations of privacy violations, harassment, discrimination or intellectual property infringement, any of which would likely expose both the individual worker and the employer to legal action.

Unchecked social media use by employees also can lead to willful or unintentional disclosure of trade secrets or other sensitive corporate information, disparaging remarks about their employers' business partners or competitors and a range of other scenarios that could do significant damage to a company's brand or reputation, experts say.

“It's unfortunate, but these kinds of things are happening, and they're happening frequently,” Shawn Ram, national technology practice leader at Aon Risk Solutions in San Jose, Calif., said during a panel discussion on the building blocks of a strong company social media policy earlier this month at the Business Insurance 2014 Risk Management Summit in New York.

Companies can greatly reduce their exposures to legal liability, financial losses and reputational harm by implementing a cohesive set of internal policies that set clear boundaries for employees regarding their use of social media channels, panelists said.


Developing such a set of policies should begin with an examination of the specific platforms and websites employees use most frequently on a daily basis, whether that use is during the course of operational responsibilities or on their own time.

“As risk managers, it will be very helpful to see how people are using sites like Pinterest, Twitter and Instagram, and spend some time learning about how they work,” said Shannon Wilkinson, founder and president of New York-based Reputation Communications Ltd.

With the nature and prevalence of social media use among employees accounted for, employers can take a more informed approach to setting parameters that are both operationally and culturally appropriate for their workforces.

“As you think about social media, you want to think through the risks that are attendant to using very powerful tools, and then develop a set of common-sense policies that are easy to understand and that ultimately will at least limit your exposure as an organization,” said attorney Scott Vernick, a Philadelphia-based partner at Fox Rothschild L.L.P.

For example, many employers' internal policies place strict limitations on the use of their own corporate identity and branding in employees' social media profiles and activities, as well as the use or mention of specific competitors, clients and co-workers, panelists said.

Employers' social media policies also typically provide definitive guidance on the kinds of language or activities that may constitute a violation of state and/or federal statutes prohibiting workplace nondiscrimination and harassment, defamation and libel of third parties and intellectual property protections.


Panelists said employers planning to regularly monitor their workers' social media activity should include provisions in their internal policies that explicitly address the level of privacy employees can expect regarding their online interactions at work and at home.

Additionally, disputes with current and former employees over legal ownership of social media identities and content likely will be easier to diffuse if the company's internal policies clearly spell out the circumstances under which those materials may be considered to be corporate property.

“As a general rule, if social media is being used in connection with the company's business functions, it probably belongs to the company itself,” Mr. Vernick said. “But we've seen some litigation on this issue, particularly where a company's social media presence and an employee's personal brand are mixed together.”