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Social Media Law: What is NOT Unique to Financial Services

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  • 1. Andrew T. Mirsky Mirsky & Company, PLLC Shana Glickfield Beekeeper Group, LLC SOCIAL MEDIA LAW: WHAT IS NOT UNIQUE TO FINANCIAL SERVICES
  • 2. When is Online Content “Conduct”? Why Does it Matter?
  • 3. 1st Amendment Government cannot regulate content of speech. •Exceptions: • “fighting words” • creating imminent and lawless action • obscenity and defamation • Espionage Act • securities law violations Content as Conduct
  • 4. 1st Amendment •If words = “conduct”, 1st Amend. protections lost; speaker subject to full scope of criminal code: • aiding and abetting crimes • conspiracy crimes • public disturbances • interfering with police investigations etc. Content as Conduct
  • 5. Content as Conduct 1st Amendment •If words = “conduct”, 1st Amend. protections lost; speaker subject to full scope of criminal code: • aiding and abetting crimes • conspiracy crimes • public disturbances • interfering with police investigations etc.
  • 6. “Actions” constituting “conduct”: • Encouraging/aiding/assisting suicides via internet chat rooms. • Intentionally or knowingly aiding and abetting a crime: Publishing book that describes how to commit certain crimes – e.g. grow marijuana. • Contributory copyright infringement: Publishing newspaper article or website that points to a knowingly infringing site. Content as Conduct (examples)
  • 7. “Actions” constituting “conduct”: • Publishing news story that reveals name of a previously unnamed witness to a crime who is part of investigation or prosecution. • Publishing news story that reveals existence of a wiretap may violate obstruction of justice laws. • Family Law Case: Teaching one’s child racist, pro- polygamy, or pro- or anti-homosexuality views may (in the views of some family court judges) be contrary to the “best interests of a child”. Content as Conduct (examples)
  • 8. “Actions” constituting “conduct”: • Antidiscrimination Laws: Making statements that create offensive work, educational, public accommodation, or housing environment based on race, religion, sex, age, disability, or sexual orientation. • Federal Housing Act: Speaking out against proposed group home for mentally disabled might violate the Federal Housing Act’s ban on “interfer[ing] with any person in the exercise or enjoyment of” the right to be free from housing discrimination based on handicap. (Source: http://www.volokh.com/posts/1183408048.shtml) Content as Conduct (examples)
  • 9. Online Conduct and Vicarious Liability for Employers
  • 10. “Vicarious Liability” Can include: • Defamation • Privacy violations • Data security breaches • Securities law violations • Other criminal conduct. Online Conduct and Vicarious Liability for Employers
  • 11. “Vicarious Liability” •If employer knows or has reason to know that an employee (including contractors and other outside service providers) will be engaging in conduct ... •If employee is acting within scope of job when she says something defamatory ... •Even if employees acting anonymously on social media, employers still may be liable for employees’ actions. (Source: http://solutions.webtitan.com/blog/bid/144922/Employers-liable- for-employee-libel-on-Social-Networks-Network-Security) Online Conduct and Vicarious Liability for Employers
  • 12. Example #1 (vicarious liability) Rahman v. State (2011) (Wash. S. Ct.) • Washington state employee drives State vehicle on a State business trip, brings wife as unauthorized passenger • Car accident and wife injured. • Wife successfully sues State for vicarious liability for husband’s negligence. Online Conduct and Vicarious Liability for Employers
  • 13. Example #2 (contributory liability): Perfect 10, Inc. v. Megaupload Ltd. (SD Cal. 2011) • File-sharing case: Copyright holder – Perfect 10 – successfully made claim of infringement against Megaupload – contributory and direct negligence. • It’s not just employees to be concerned about. What about 3rd party contributors to company’s public websites? Online Conduct and Vicarious Liability for Employers
  • 14. DMCA and CDA Protections? Not available to Businesses as Employers • Employers cannot claim CDA and DMCA protections for website and therefore subject to direct, contributory and/or vicarious liability for actions of employees. • DMCA and CDA protections for website operators protect operators from liability for actions of independent third parties not from actions of their own employees. • Likewise, employees themselves not protected from consequences of their own actions. Online Conduct and Vicarious Liability for Employers
  • 15. Social Media Policies and Training • Having good social media policy will not immunize against vicarious liability, but lack of having one will create easy argument for negligent supervision. • Businesses cannot prevent all employees from engaging in all harmful activities. BUT … • Training and policies educate employees about problems and risks involved AND rebut arguments that employer took no interest or role in seeking to prevent harm from happening in first place. Online Conduct and Vicarious Liability for Employers
  • 16. Anatomy of a Social Media Policy
  • 17. Anatomy of a Social Media Policy Social Media Policies and Training • Disclaimers / Transparency • Identify yourself as employee and make it clear you are speaking for yourself and not the company • Media Inquiries • Direct all media inquiries to _____ • Proprietary & Confidential information • Don’t comment or speculate on plans, strategies, prospects, etc. • If you’re unsure of sensitivity, ask or refrain.
  • 18. Anatomy of a Social Media Policy Social Media Policies and Training • Copyright • Respect copyright, fair use, and financial disclosure laws. • Never use more than an excerpt and use a hyperlink to that person’s work whenever possible • Respectfulness • Add value and avoid unconstructive arguments • Make sure what you share is factually correct • Be the first to respond to your own mistakes • Everything is permanent • Serving customers and community • Share expertise where appropriate • Don’t forget your day job! • Refer back to Code of Conduct / Ethics policy
  • 19. Anatomy of a Social Media Policy Social Media Policy Templates • IBM • Dell • Intel • Coca Cola
  • 20. Social Media Training Program Philosophy - Educate & Empower • Find an employee getting social media right • Using appropriate content/tone • Good use of transparency/disclaimers • Active, but not so much it interferes with work • Uses clear bio and photos • Well respected participant in the industry dialogue
  • 21. Social Media Training Program Educate & Empower • Establish messaging (marketing) • Incorporate sample social updates into internal outreach • Select good accounts to follow/share • Review policies (Legal/HR) • Make part of employee handbook process • Do refresher courses periodically • Educate on content, tools, best practices • Social Media 101 • Social Media Best Practices
  • 22. Social Media Training Program • Certification programs • Formal training • In-house • Part of formal review process • Divide based on role (SM for sales, SM for recruiting, etc.) • Reverse Mentoring • Archive trainings
  • 23. Copyright and Other IP Headaches
  • 24. • Employee use of social media must conform with copyright laws and fair use restrictions. • Same rules of “vicarious liability” for employers (discussed above) apply to copyright and trademark infringement. • Examples: Where employees use social media as part of their jobs, including posting content to company Facebook pages, twitter accounts, Pinterest pages etc. • Financial services cos are targets for claims from artists, photographers, bloggers and other publications for copyright infringement. Copyright and Other IP Headaches
  • 25. Examples (copyright) • Fair Use: Sharing Newsletters: Lowry’s Reports, Inc. v. Legg Mason, Inc. (D. Md 2003). • $20 million judgment against Legg Mason • Legg Mason had 1 subscription to Lowry’s market newsletter, but distributed company-wide via e-mail. • Fair Use: Commercial vs. non-commercial: Sony Betamax case (Sony Corporation of America v. Universal City Studios, Inc. (1984)) • Supreme Court: Commercial uses give rise to presumption of unfair use. • BUT: Commercial use can still = fair use. Copyright and Other IP Headaches
  • 26. Examples (trademark) • “Superman” (Part 1): Magazine story features a photograph of a woman wearing a t-shirt with a picture of a famous comic books superhero character, a trademarked character. The story is about the woman and her battle with a serious illness. • “Superman” (Part 2): A cash-for-gold jewelry dealer in Toronto promotes his business through television commercials featuring character “Cashman” dressed in a red cape and pair of blue tights and dollar signs on his chest. Copyright and Other IP Headaches
  • 27. Social Media and Employment
  • 28. Employer Access to Employee Social Media • Question: How are employers supposed to “supervise” employee online conduct – for which employers may be held vicariously liable (see above discussion) – if employers are not allowed to access employee passwords? Social Media and Employment
  • 29. Password-Access Restriction Laws • What these laws do? • What these laws do not do? Generally apply only to applicants (not to hired employees) • Employees subject to employment contracts and personnel policies of employers. • Passwords can still be accessed for these purposes: • For purposes of employment investigations and other workplace investigations. • If permitted under employment policies and employment contracts. Social Media and Employment
  • 30. Password-Access Restriction Laws • Employees get no protection in use of employer computers, mobile devices and so forth: employer devices belong to the employers, period. • Financial services employers are also challenging these laws as inconsistent with obligations under state and federal securities laws to monitor employee communications for purposes of preventing abuses of securities laws. Social Media and Employment
  • 31. Other Workplace Issues • Workplace harassment, discrimination and bullying: Cases from Facebook wall posts and Twitter tweets. • Anonymous posters and employee actions via employer’s system or under employer’s name. Employers could face same legal pressure to disclose identities for reasons discussed above: • Doesn’t necessarily = liability, but may still require disclosure. Social Media and Employment
  • 32. Social Media and Political Dialogue / Issue Advocacy
  • 33. • Non-solicitation policy during work • Lawful, off-duty conduct is okay • EEOC guideline: Could this be perceived as representing the the employer’s beliefs/views? • Be sensitive to potential discrimination Social Media and Political Dialogue / Issue Advocacy
  • 34. Andrew T. Mirsky Mirsky & Company, PLLC andy@mirskylegal.com (202) 339-0303 www.mirskylegal.com @mirskylegal Shana Glickfield Beekeeper Group, LLC ShanaG@beekeepergroup.com (202) 540-8787 www.beekeepergroup.com @beekeepergroup

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