Legal Issues Arising from Nonprofit Organizations' Use of Social Media -- Part Two

Date: October 6, 2011

Last month, we examined some of the intellectual property, insurance, and solicitation issues surrounding a nonprofit entity’s use of social media [full article here].  This month, we turn to terms of use and employee policies.

Social Media Terms of Use
Nonprofit organizations and associations should have a policy in place governing the use of their social media by third parties, such as non-employees, members, donors, and the general public, as well as a system in place to monitor such use.  Specifically, nonprofit organizations and associations should be diligent in removing third party postings which could constitute defamation, misrepresentation, tortious interference with business relations, or other torts.  Third party users should also be expressly prohibited from disclosing proprietary, confidential, or legally privileged information, and from posting comments that violate the antitrust laws.  To address these and other similar issues with respect to monitoring, we have developed a set of sample guidelines for third party users of nonprofit organization and association social networking tools.  More information on defamation and antitrust issues follows.   

Defamation is a “false written or oral statement that damages another’s reputation.”  (The term libel is used to refer to a defamatory written statement, and the term slander is used to refer to a defamatory oral statement.)  While the law on defamation is virtually the same in both traditional and online media, the liability risk is potentially higher in the electronic and social media context because users often post information instantaneously without thinking through the consequences of their postings; the internet offers a myriad of opportunities to comment on a person or business; and the postings can be read and accessed by people all over the world.

The consequences can be severe: there have been numerous lawsuits alleging defamation based on online content.  To avoid being the target of such a lawsuit, users of social media should be reminded that libel and slander can cause irreparable damage to the reputation of a person or business, and that postings about a business or person made as statements of fact, if proven to be false, could form the basis of a defamation suit.  Users should also be aware that posts ostensibly made on an anonymous basis still may not protect the identity of the poster because users can be traced using IP addresses.           

In addition, nonprofits and particularly membership associations should be on the lookout for comments that may run afoul of the antitrust laws, such as postings on salaries, pricing, allocation of territorial divisions, boycotts (i.e., concerted refusals to deal or do business with others) and bid rigging.  Such discussions pose a real danger, since associations by definition bring competitors together.  The comments need not rise to an express agreement to restrict competition; the antitrust laws can be violated simply through informal communications that involve an implied understanding among the parties to hinder competition.  Therefore, if, in the course of monitoring social media, discussions that may potentially violate the antitrust laws are detected, action should be taken immediately to halt such discussions and remind users of the organization’s policy on the use of its social media by third parties.

Social Media in the Workplace

Social media has both advantages and disadvantages in the nonprofit organization workplace.  A principal advantage of employee use of social media is that it can be an effective marketing and public relations tool for the nonprofit organization.  Moreover, social media can effectively be used as a recruiting tool; many employers find social media helpful in gleaning valuable information on candidates, such as integrity and personality.  Conversely, a potential drawback is that the use of social media by employees may facilitate the disclosure of confidential or proprietary information concerning the nonprofit, such as business plans or financial and membership data. 

Generally, it is acceptable to investigate potential employees through their use of social media, so long as the nonprofit has legitimate access to the site and job applicants are warned that their social media pages may be searched.  But nonprofit organizations should ensure that the review of potential employees’ social media use does not lead to claims by applicants that they were discriminated against based on legally protected characteristics, such as race/color, disability, national origin, religion, age, pregnancy, and, in some states, sexual orientation.  That is, the nonprofit employer should be able to prove that such protected characteristics were not a factor in the hiring/employment decision.  

In addition, a comprehensive social media policy that provides specific guidance to employees on what conduct is and is not permissible should be developed, implemented, and monitored.  The policy should be tailored to the nonprofit organization’s specific needs (as opposed to adopting a generic template) and may include provisions that:

  • restrict the use of social media unrelated to work during business hours or while using the organization’s resources
  • prohibit the disclosure of confidential and proprietary information about the nonprofit organization on social media sites
  • outline protocols for social media use when evaluating job applicants, and
  • prohibit harassment and discrimination of coworkers, employers, and members on social media sites. 

It is recommended that the policy state that the employer may monitor all uses of workplace electronic equipment, including use of social media.  The policy should be distributed to all employees and all employees should be required to acknowledge and agree to comply with the policy.  Reminders about the policy should be provided to employees on a regular basis.   Managers should be trained on the content of the policy, and nonprofit organizations should strive to enforce the policy consistently.  Finally, it may be appropriate for the board of the nonprofit organization or association to periodically review and update the policy in light of the rapidly developing nature of social media (for example, once per year).

In summary, social media can be a great communications tool for nonprofit organizations and associations.  There are some potential legal risks, but they can be managed and should not ultimately dissuade nonprofits from using social media to help fulfill their missions.