Love it or leave it: Social media brings production and pitfalls to business.

• Author: Karin McGinnis
• Position: Law Journal 2014

Social media, love it or leave it? Social media has become an indispensable part of business. There is no question that social media is an effective marketing tool. Statistics show that 14% of consumers do not trust advertisements, but 90% trust peer recommendations. So go ahead and love social media, but like any love affair, be wary of some pitfalls along the way.

Unintended loss of trade secrets

Companies who fail to limit use of trade secrets on social media can easily lose a trade-secret claim. Because an essential element of a trade-secret claim is that the information is not readily accessible to others by proper means, an employer who fails to prevent employees from publishing trade secrets on social media may lose the ability to claim that the information is a trade secret. An employer who allows employees to "connect" with customers and clients on Linkedln, without ensuring adequate privacy controls so that others cannot view the information, allows those employees to in effect publish a customer list.

Unintended loss of goodwill

Not only do employers risk losing trade-secret protection, they unwittingly give employees an end run around a customer nonsolicitation agreement. The same customer list on an employee's social-media account can be used by the employee to easily notify customers that she is now working for a new employer. A court in Massachusetts recently held that an employee did not violate a non-solicitation agreement by posting the employee's new position with the employer's competitor on the employee's Linkedin account.

In addition to requiring adequate privacy controls, employers should prohibit employees from conducting company business, including "connecting," on social media accounts not owned by the company. If ownership of the social media account is not clearly defined, companies may wind up battling with a former employee over the account and the goodwill it generated.

Employees endorsing company products

Some enthusiastic employees like to tout their employers' products or services through social media. Although such promotion can help marketing efforts, it also can land the company in hot water with the Federal Trade Commission. The FTC prohibits employees from endorsing company products or services without disclosing their affiliation with the company. The same is true for consultants and independent contractors. Therefore, companies should ensure that persons performing social-media marketing on their...