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Corner Office: The Legal Risks of Social Media

by Neil A. Stein

Attorneys (and I speak from experience) always look forward to new or revised laws and must stay current with evolving issues. The new and unknown tend to result in con- fusion. Who better to provide guidance than attorneys, since most legislation is written by government attorneys.

The dramatic rise in the use of social media by business has created a greater degree of risk for startups and entrepreneurs. For example, a National Labor Relations Board judge ruled that the Chipotle chain kept in place an un- lawful social media code of conduct, using it to improperly compel an employee to delete Twitter posts about poor working conditions.

The Chipotle case may be particularly distressing to you. Perhaps your company has no social media policy. Strike one. Perhaps you have a social media policy but you have no idea whether it complies with applicable law. Strike two. Perhaps your own marketing efforts actually violate your own social media policy or worse yet, government prohibitions. Strike three.

These issues may seem intimidating at first. Worse yet, attorneys tend to be risk-averse, thereby potentially compromising your business objectives by being too conservative. Nonetheless, here are some risks to consider:

• Don’t over-promise, embellish or exaggerate in social media. An entrepreneur should avoid even an appearance of fraud. To make matters worse, this is when you could find the FTC coming after you, and the federal government is one difficult opponent.

• Hire carefully. You probably know that you can be sued for the social media misdeeds of your employees, such as an employee’s defamatory, discriminatory or harassing social media message. You could be sued if your employee leaks sensitive customer information or improperly uses your intellectual property and trade secrets. These risks exist regardless of whether the employee commits the offense at the office or at home using their personal social media accounts.

• Speaking of hiring, you could be sued under a legal theory of negligent hiring if you don’t search an applicant’s background on social media prior to hiring. Your business could therefore be sued if you don’t spend a few minutes checking out your potential employee’s online behavior. But a word of caution: Searching for an applicant’s back- ground on social media may also create risk to the employer. Federal anti-discrimination laws make it illegal for your business to base any hiring decision on someone’s age, race, color, national origin, sex, religion, disability, sexual preference, medical history or veteran status. The moment you view an applicant’s Facebook profile, you become exposed to their personal information. Failing to hire someone after being exposed to this information can get your company sued for employment discrimination. The defense costs and potential damages could be significant.

What can or should you do, given all of these risks? A social media risk assessment is a good place to help your business identify social media legal risks with employees, hiring, human resources, marketing, technology and everywhere else. Once that assessment is complete, your business must implement social media policies and compliance procedures. Lastly, everyone in your company must receive social media training.

It really isn’t that complicated. You simply need to invest a little bit of time (and a few dollars) now, before you find yourself mired in a social media lawsuit or investigation that cripples your business. Happy tweeting!

Neil A. Stein is a co-founder and principal of Kaplin Stewart and a member of the Land Use, Zoning & Development group. He can be reached at (610) 941-2469 or by email to

Published (and copyrighted) in Philly Biz, Volume 1, Issue 12 (December, 2016).
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