Intellectual Property

17 Apr 2009

Social Networking or Social Slander?

Social networking sites such as Facebook, Bebo and Twitter have become day-to-day means of communication. The upside for employers is that these websites encourage "social networking", which can result in positive spin-offs for your business, such as new clients, and enhanced relationships with colleagues. The downside is that these websites also pose a number of potential risks to your business.

Take the case of Heather Armstrong, a UK worker, who was the first person to be fired from her job for writing (satirically) about her co-workers on her blog site (under the pseudonym of "Dooce"). This case has become so famous that the term "Dooced" now has its own dictionary meaning: "to lose one's job due to entries on a blog".

This issue has also arisen in New Zealand. In December 2007, the Warehouse fired an employee who posted comments on Bebo saying "work sux" and working until midnight was "gay like management".

There are other risks too. Excessive personal use of social networking sites during work time poses a large cost to employers. There is also a risk of employees making statements that reflect poorly on your business, or disclosing confidential information.

Social networking sites come in a number of styles. While Bebo appears to be almost entirely social, Linkedin is primarily used for business networking. Many businesses use Facebook and Twitter as business tools for recruitment.

Because the sites are used for business, conduct by employees could be viewed as made in the course of employment on behalf of the employer. If the employee's conduct is unlawful, such as copyright infringement or defamation, consequences for an employer range from embarrassment and damage to reputation through to expensive defence of court proceedings.

Copyright infringements can arise in a number of ways. At one level, an employee could post a copy of a seminar presentation he or she produced, which has included an unauthorised copy of a song or advertisement. At another level, the employee could be using a social network to facilitate large-scale, peer-to-peer trade in music or videos.

Infringements and defamation are likely to breach the social network's terms of use, which can lead to the user being disconnected.

Not surprisingly, trade mark owners are now taking an interest in social networking sites. Users of Facebook and Twitter can choose a user name to help others find them. In some cases, those user names are the same as registered trade marks. Facebook and Twitter both have policies about this.

In order to infringe a trade mark or breach the Fair Trading Act, a use must be in trade. Those who simply use a name for their personal identification, or even to personally criticise the trade marked products, are unlikely to risk infringement, although criticism could be defamatory in some cases.

When, however, the employee's use appears to be on behalf of the employer, the initial hurdle of being in trade may be met and liability can follow.

Employers can take a number of steps to reduce the risk of social slander (and the other risks that we have outlined above), and provide greater clarity to staff on what will (and will not) be tolerated. At a minimum, we recommend that you implement a clear policy on use of social media, which includes:

• Guidelines on what is considered to be acceptable use of social media during working hours.
• Restrictions on statements that could be seen as expressing the views of the company.
• Restrictions on use or disclosure of confidential or commercially sensitive information about the company.
• Restrictions on making any statements that are disparaging about the company or any of its employees, customers or competitors.
• The consequences (including disciplinary action) if the policy is breached, or if the company (or its employees) is, brought into disrepute in any way as a result of the employee's use of social media.

This policy will need to fit with the other employment policies for the business.

Earl Gray is a partner in Simpson Grierson's specialist intellectual property group, and Carl Blake is a senior associate in Simpson Grierson's specialist employment group.

Published: National Business Review August 2009

Authors

Earl Gray

Partner - Intellectual Property

DDI: +64 9 977 5002

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Carl Blake

Senior Associate - Dispute Resolution

DDI: +64 9 977 5163

Mobile: +64 21 477 228

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