Corporate Twitter

Legal considerations for businesses using social networking services

Twitter (a service which allows short text-based messages, or “tweets”, to be sent to groups), is the latest social networking site being adopted by businesses as a part of their marketing campaigns, and by employees who use the service for corporate and non-corporate purposes during work hours. “Tweets” are displayed on the user’s profile page and other users are able to subscribe to read these “tweets” (which may comprise real-time updates of a user’s current activities).

Other social networking sites such as Facebook and MySpace, together with interactive websites and “blogs” appeal to businesses by providing inexpensive means to communicate with customers, potential customers, employees, and other people interested in the business.

As is often the case with new technologies, the increasing use of social networking services for commercial purposes raises a number of potential legal issues, many of which are yet to be fully tested or resolved.

Legal Risks

Businesses using Twitter, or other social networking services, should consider the following areas of potential risk - and whether they should adopt new policies and procedures to reduce these risks.

Defamation and Intellectual Property Infringement Businesses may face liability if their employees post content to a corporate blog, Facebook page or Twitter account that defames third parties. Posts that include copyrighted material, trademarks or other third party intellectual property can expose the business to liability for copyright or trade mark infringement. 

• Corporate Records and e-Discovery Unlike material stored on a business’s own website, communications and content created on, and provided via, external social networking sites may not be archived.  For instance if a business uses services such as Facebook or Twitter for corporate communications, historical records of those communications may not be available to resolve any disputes as to what was posted, and at what time, by the business unless that information is separately available from the hosting service (i.e. Facebook etc.).  Access to third party web records may be limited by the third party’s terms of use, and access may be delayed and/or subject to third party fees to reproduce records.                           

• Employment Issues Businesses may take appropriate action in connection with employees who spend excessive work time on the Internet, or who use the employer’s Internet and/or email systems to engage in conduct that is harassing, discriminatory or threatening. 
  
  It is important that businesses implement appropriate policies and procedures for all employees regarding Internet availability during work hours and from work devices. 
  
  Such policies should include statements that all Internet access is at the discretion of the business, and that access to inappropriate websites, excessive time spent on internet usage, downloading of pornographic or other inappropriate material, use of the employer’s internet or email systems to engage in harassment and/or discrimination in the workplace or elsewhere is prohibited.  These policies should also remind employees and contractors with access to corporate systems of their obligations to maintain employer confidential information as well as certain third party information. 
  
  An employer who disciplines an employee for posting content or inappropriate usage of systems might face unfair dismissal or other claims if it cannot be demonstrated that the employee has been made aware of the employer’s policy on usage of its systems.  Each employee (and contractor with access to corporate systems) should be given a hard-copy of the written policy to sign as acknowledging that they have read and accept the policy, or the equivalent of this by way of an intranet page.  Access to the systems should be denied to anyone who does not acknowledge that they have read and accept the policy. ·                         

• Investor Information Misstatements made on a business-sponsored blog, or other Internet site could expose a publicly traded company to liability for various breaches of the Corporations Act and applicable listing rules.  This could include a breach of duties to disclose accurate information to the shareholders and to the market generally.  Extreme care is required if posting information on corporate results, corporate forecasts or planned transactions.  In addition, care should be taken to ensure  no actions contravene insider trading and market manipulation rules.                      

• Trade Practices False or misleading statements made through a blog, Facebook page or Twitter account about the goods or services of a competitor that cause or are likely to cause the competitor harm may be grounds for action under the Trade Practices Act.  In addition, posting corporate information on a company website or  company-endorsed blog that is not accurate, or that contains links to third-party websites or information without appropriate disclaimers, can create liability. ·                         

• Trade Secrets Disclosure of trade secrets through a blog, Facebook page or Twitter account can destroy the "secret" status of such information, rendering it ineligible for trade secret protection. Such disclosure may also contravene obligations to maintain third party confidences.                          

• Privacy Businesses collecting personal information from individuals visiting or posting comments to a business's site may be required to comply with state, federal and relevant overseas privacy regulations.

Practical Guidelines

Appropriate safeguards will enable businesses to successfully adopt new marketing and client communication tools.

To manage risk, of adopting these new communications tools, businesses should consider adopting the following:

• Creating a written policy for employees that sets out clear guidelines for using communication and networking tools to raise awareness about possible pitfalls. Businesses may wish to have separate guidelines for employees' discussion of the business in their personal blogs, Facebook pages and Twitter accounts.                    

• Establishing terms of use and posting appropriate disclaimers that limit your business's liability for third-party statements and other claims, and including the essential elements required by the federal Privacy Act.                    

• Ensuring that any personal information gathered from users via the corporate blog, Facebook page or Twitter account is handled in compliance with applicable privacy laws and the applicable privacy policy.              

• Regularly monitoring the corporate communications (and employee posted content on corporate sites) for content that violates terms of use, employee policies or applicable laws.           

• Archiving all communications content in a well-organised and readily available form.                 

By Dan Brush - Technology and Internet media sections 

Richard Lund - Employment law sections