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Too much information on chat can leave employers in legal lurch

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Internal office chat applications are intended to make life easier by connecting co-workers in real time, but analysts warn that using them recklessly can have serious repercussions.

Legal and security experts say companies could leave themselves open to lawsuits, embarrassment and other problems if offensive or incriminating material is exchanged in chat programs, which include Slack, Campfire and HipChat.

The misuse of these applications was highlighted in a lawsuit against Gawker Media L.L.C. that had been filed by Terry Gene Bollea, known professionally as Hulk Hogan, who sued after the Gawker website posted portions of a sex tape that featured the former wrestler.

Last year, a jury awarded Mr. Bollea $140 million and three months after the verdict, Gawker filed for Chapter 11 bankruptcy protection and put itself up for sale. A tape of a deposition was shown at the trial where a Gawker reporter was asked about off-color jokes that were made about Mr. Bollea on Campfire, a commercial application by Chicagobased Basecamp.

Jason Fried, Basecamp’s founder and CEO, referred to comments in a March 7, 2016 post where he advised against using group chat “as the primary, default method of communication inside an organization.”

“A slice, yes,” he wrote. “The whole pie, no. If it’s an important conversation, it shouldn’t happen in the chat room. Chat should be about quick, ephemeral things.

Important topics need time, traction, and separation from the rest of the chatter.” A spokesperson for Atlassian, the Sydney, Australia-based company that produces HipChat, declined to comment, and a representative for Slack did not respond to a request for comment.

Lindsay Burke, Washington-based counsel at Covington & Burling L.L.P. and vice chair of the law firm’s employment practice group, said some of the issues that have come up with Campfire and other such applications are similar to problems that arose when email and instant messaging first arrived.

“People think of it as a casual form of communication,” Ms. Burke said, “and they forget that it’s business and usually the company is keeping a record of the communication. And if the company finds itself in litigation, then the discovery request … may call for the company to produce those records.”

In that sense, Ms. Burke added, “it can be tricky or at least embarrassing for employees and employers if they have disregarded general rules of professionalism and decorum in these conversations.

And the friendlier and less formal your workplace, the more likely people might forget what the boundaries are.” Ms. Burke said many companies have software systems that will automatically delete emails and other communications after a certain period of time, although certain companies may be bound by law or regulation to maintain their communications.

“Part of the reason to do that,” she said, “is so that you don’t end up with a huge backlog of communications, and you don’t know quite what’s in there, and then they get requested in litigation.

Obviously, you cannot do that if there is active litigation; you can’t destroy documents that you know to be relevant. But if you just have a general policy about your document retention or document destruction policies, those can cover chat conversations, (instant message) conversations, email conversations.”

Heather Morgan, a Los Angeles-based partner with law firm Grube Brown & Geidt L.L.P., said there is an inherently more informal nature to chat, which can lead to serious problems, including lawsuits and data breaches.

“If they’re going to employ it,” Ms. Morgan said, “I think they should be very particular about what the purpose of it is. Why are they using it? What is the need? And if it’s a means of doing business, then I would suggest the company make sure it sets guidelines and informs employees about the proper use of that software application.”

Ms. Morgan suggested that rapidly growing startup companies might be more likely to fall victim to a chat application problem.

“They’re thinking about getting the job done and having good employee morale,” she said, “and if HipChat or Slack allows that to be accomplished, then that’s front and center, and the concern about what’s being said takes a back seat.”

“The reason collaboration is so popular and why it’s becoming more widely spread than email in some regards is because it allows teams to be more effective, more efficient,” said Evan Blair, co-founder and chief business officer at ZeroFox Inc., a Baltimore-based social media cyber security company. “But it creates a tremendously challenging environment from a regulatory perspective, from a legal perspective and from a security perspective.”

Mr. Blair said all types of companies are susceptible to chat application challenges.

“This is a human problem,” he said. “It’s an epidemic where we like to overshare. We like to be in the know. There are probably different risks that are more likely to occur depending upon the type of organization and the type of people you’re engaging with, but it’s really going to be down to the way the technology is used and the type of engagement that employees are used to.”

Mr. Blair said the advice on how to prevent catastrophes from occurring is easy, but the follow-through is hard because “you get into a conversation and the keys just fly.”

“What I tell my kids is that anything you post, no matter where you post it, assume that it’s 100% public and it will live forever,” he said. “So don’t post something that you don’t want to be publicly available for the rest of time, because that’s the way the internet works.”