Social media revolution in the workplace forces risk managers to strike a balance

Risk managers are struggling with a series of challenging balancing acts regarding the explosion of social media in the workplace. One is between giving workers freedom of expression and protecting company assets, including trade secrets and proprietary information.

Another is to protect job applicants' privacy and ensuring they do not violate any nondiscrimination laws, while also conducting thorough background checks.

And yet another is the desire to take advantage of the promotion and marketing advantages proffered by social media networks but avoid the potential risks, which could include employees engaging in libel and misrepresentation.

Steps to address these issues include a clearly written, easily understood company social media policy that is supported by employee training, experts say.

One of the major problems faced by risk managers in dealing with social media is the risk of the inadvertent release of proprietary company information and trade secrets.

Employers are trying to figure out the balance “between an employee's freedom of speech and the employee not sharing things about the workplace that would be embarrassing or inappropriate from the employer's point of view,” said Nicholas Economidis, Philadelphia-based underwriter for professional liability and specialty lines at Beazley P.L.C.

Aaron K. Tantleff, senior counsel with law firm Foley & Lardner L.L.P. in Chicago, said if employees writing on social media sites write their posts rapidly while working without adequate thought, “or they don't think about consequences as much as they would with an email or other correspondence,” this increases the likelihood of inadvertently revealing confidential information or company trade secrets.

The rapidity with which communications are made via social media means they often are issued spontaneously. “What you have is what we used to refer to as the 11 o'clock email,” said Phil Mayes, London-based senior vice president in the global technology and privacy practice of Lockton Cos. L.L.P.

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We “want to make an immediate response” when what we should do is compose something and leave it in a draft folder “while we think about the wisdom of sending that particular email,” Mr. Mayes said.

Meanwhile, “those things that you do on social networks can be discovered, they can be subpoenaed, they can be subject to court orders and search warrants” and in many cases are “much less ephemeral than people think,” said Alan E. Brill, the Secaucus, N.J.-based senior managing director of secure information services at Kroll Ontrack Inc.

Driving this to some extent is the increased blurring of the lines between work and personal life that is often inherent in the use of social media.

Joseph P. Cutler, counsel with law firm Perkins Coie L.L.P. in Seattle, said workers are “sharing information about their day, which can intermingle with what they're doing at work,” and that can lead to them to inadvertently “cross that line” and reveal proprietary information.

A related issue is that social media is “hard to control,” Mr. Cutler said. Employers are “unpopular if they block access to it, and yet there's not a lot to do to control what people do on it,” he said.

“Companies are behind in training their employees and establishing good social media use policies,” Mr. Cutler said. Policies that dictate the use of work-related social media as part of the terms of employment “are just as important as nondisclosure or noncompete agreements,” he said.

Mr. Mayes said another issue is created by a “false degree of confidence.” People do not realize, once a posting is sent to Facebook, “it is so easy for defamatory and proprietary information to leak out.”

Mr. Brill said people “will sometimes say, "I've set up my account so only my friends see this,'” but “some people who collect friends aren't very choosy about whom they approve of as friends.”

“Completely innocent people can suddenly find that they're releasing information that should not have been released,” Mr. Brill said, regarding releasing potentially sensitive company information. “If an employee in the midst of a merger or acquisition, for instance, starts sending messages such as, "Here I am in beautiful downtown wherever,' that can be a signal as to who the acquisition partner is.”

In fact, in some cases, “the employee doesn't necessarily have to take any action today where they are” because social media platforms can be tied automatically to the GPS in the cellphone, and a knowledgeable person can extract the geographical location, Mr. Brill said.

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In the pre-employment context, another risk faced by employers is exploring personal social media postings by job applicants, which could ultimately lead to charges of discrimination when particular information is revealed.

Jason C. Schwartz, a partner with law firm Gibson Dunn & Crutcher L.L.P. in Washington, recommended that a pre-employment Internet search of an applicant be conducted by someone other than the decision-maker who is doing the hiring and that personal information should not be considered in the hiring decision.

Although he said he thinks companies should screen a potential hire's public social media postings, Mr. Brill cautioned that in some jurisdictions it has become illegal for employers to ask workers for their social media passwords. Recently, Congress has proposed legislation on this issue regarding the request for social media passwords. “It's a different world, and things you might have done a year ago probably are now inappropriate, depending on where you are and what you're doing,” he said.

There is also the danger of colleagues inadvertently revealing personal information such as sexual orientation, or of using social media to harass co-workers, experts say.

Criticisms about the company are an issue, too, experts say. They caution that in light of a recent National Labor Relations Board ruling on the issue, companies cannot keep employees from commenting on their company or their work conditions.

Bradford K. Newman, a partner with law firm Paul Hastings, Janofsky and Walker L.L.P. in Palo Alto, Calif., said the NLRB has been issuing “a series of puzzling decisions on what kind of social media policies may violate the (National Labor Relations Act), but I think employers are much more concerned about protecting their data than worrying about a potential technical violation of” the act.

Problems also may arise if an employee is involved with off-duty issues or activities that “the employer doesn't like, and at least arguably reflects upon the reputation of the employer,” including comments against a religion or racial group, Mr. Schwartz said.

The company might reasonably say, “That's not consistent with our company values. It makes us uncomfortable,” he said. In many cases, the permissible reaction could depend on the law in the state where the company is located, Mr. Schwartz said.