Wednesday, 04 April 2018 13:10

Social Media: Business Boom to Bust – What Employers Need to Know

Written by Laurel Cornell

With the evolution of social media as a critical communications tool for business, a new term has emerged: social business. Social business can lead to a deeper relationship with customers, allowing employers to build and maintain high levels of brand loyalty with engaging and positive responses to customers on social media. 


Recent studies demonstrate the growing use and impact of social media in business:


  • Sixty five million local businesses currently use Facebook pages to connect with customers.
  • More than 65% of consumers conduct online product research about the products and services prior to purchasing.
  • Customers spend 20-40% more with companies that engage and respond to customers via social media.
  • An estimated 67% of consumers use social media networks like Twitter and Facebook to seek resolution for customer service issues.

Disadvantages of Social Media and Business


While social media has provided a direct pathway to reach consumers, there are pitfalls, especially when social media usage is allowed at work. Employees spend between one to three hours per day on the Internet on personal business while at work. Negative messages on social media can impact employee relations, hindering work or creating tension between those working together. Breaches in security and damage to a company’s image may occur. Careless employees may cause the inadvertent disclosure of confidential information.


Potential Liability under Discrimination Laws


In 2014, the Equal Employment Opportunity Commission (EEOC) examined the use of social media in the workplace and its impact on the laws enforced by the agency. They identified two key issues that may cause claims under EEO laws: hiring practices and employee conduct on social media. For recruiting, social media provides a plethora of information about applicants. However, looking at applicants online can expose employers to protected factors such as age, religion, disability, genetics, sex, nationality, citizenship; or to lawful off-duty conduct such as using firearms or tobacco, political affiliation, etc. This information exposes employers to allegations that they used protected information to make hiring decisions.


Cases based on discriminatory harassment show that social media will be viewed as equal to email and other forms of communication at a company. Due to the fact that these are extensions of the workplace and the employer bears responsibility, this can include liability for hostile work environment and discrimination claims. If the device used for misconduct is owned by the employer, conduct by employees away from the physical workplace may still be held against the employer.


Potential Liability under National Labor Relations Act (NLRA)


If communications among non-supervisory employees are about workplace issues or conduct as it relates to their terms and conditions of employment, then it is may be protected concerted activity under Section 7 of the NLRA. Additionally, policies affecting conduct on social media are now scrutinized under a standard that protects Section 7 rights when:


  1. Employees would reasonably construe the policy to restrict Section 7 activity.
  2. The policy was in response to union activity.
  3. The rule as applied restricts the use of Section 7 rights.

This impacts policies on confidentiality, social media, prohibiting negative comments about the company, employees or management, use of company information about terms and conditions of work, etc.


The National Labor Relations Board (NLRB) has also held that if a company allows employees to access its email system after hours, employees may use it for Section 7 rights, including union organizing. Also, the NLRB found that emails are messages sent in mixed-use areas and are not subject to restrictions of literature in work areas.


Potential Liability under Various State Laws


Additionally, each state can pass its own social media laws, and many have done just that. Laws protecting employees’ social media account information have been passed in 26 states. These laws bar employers from requiring disclosure of passwords or usernames as a condition of employment and many also permit access for investigative reasons, based on need and showings of interest.




The social media trend in the workplace is not going away. The laws covering its use by employers and employees are constantly evolving to fit the next technological development. It is imperative to know which laws apply to your business and how to apply them best for your company and employees. Consequently, you should work with employment counsel to ensure all policies affecting social media and employee conduct on social media comply with federal laws, rules and regulations by the EEOC and NLRB, and any applicable state laws. Once you have reviewed and properly implemented social media usage policies, schedule intervals of six to nine months ahead to review the latest rules and laws to see if they require further changes to fit the ever-evolving landscape.


The foregoing provides an overview of certain legal issues.  It is not intended, and cannot be construed, as legal advice for any purpose.


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Laurel Cornell is a partner in the Fisher Phillips Louisville, Kentucky office.  Her practice is exclusively devoted to representing employers in matters of labor and employment law.  This article gives an overview of certain legal issues, and cannot be construed as legal advice.  For more information, call (502) 561-3990.

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