Employer Liability for Employee Social Media

Buried within last week’s firestorm ignited by a couple of posts over at AgentGenius was an actually important issue that all social media practitioners and companies thinking about social media need to think about.

When is a company or an organization responsible for the social media actions of its employees?

Now, while I have gone to law school, and am a member of the Bar, I am not a lawyer, and what follows should not be construed as legal advice or any such thing.  Consult your own attorneys for their take on the issue.

From where I stand, I believe the answer will depend largely on three factors: (a) the employee’s “day job” responsibilities, (b) the “social media act” at issue, and (c) employer’s level of knowledge.  But this is a first stab, and I would love thoughts/comments from the readers, especially from those who are practicing attorneys.

Respondeat Superior, in Brief

The law that typically governs employer liability is the common law of respondeat superior.  From Wikipedia, we get this definition:

Respondeat superior” (Latin: “let the master answer”) is a legal doctrine which states that, in many circumstances, an employer is responsible for the actions of employees performed within the course of their employment.

To determine whether the employer should be held liable for an employee’s action, the courts would look at three factors (again, Wikipedia):

  1. Was the act committed within the time and space limits of the agency?
  2. Was the offense incidental to, or of the same general nature as, the responsibilities the agent is authorized to perform?
  3. Was the agent motivated to any degree to benefit the principal by committing the act?

The prevailing literature on employer liability, however, seems to suggest that the key issue is whether the “bad act” was committed when the “person was on the job”.  Incidental vs. general nature still goes to whether the employee was acting within the scope of employment; the question of agent’s intent also goes to the scope of employment issue.

There will be a quiz!

The classic case usually used in hypotheticals goes something like this.

A delivery driver for Company XYZ hits someone while trying to make a delivery — employer is liable, as the driver was clearly acting “within scope of employment”.

A delivery driver for Company XYZ goes out on a date with his girlfriend, ends up drinking, and while driving her home, hits a pedestrian  — employer probably not liable, as the driver was on personal time, not doing anything connected to his job as a delivery guy, and so on.

Then the tricky stuff explores whether Company XYZ is liable if the driver was drunk against company policy (likely yes), or if the driver was on personal time but doing something work-related (likely yes), and so on.

An important exception to employer liability is the doctrine of “frolic and detour” (one of my favorite legal doctrines, as it involves the word frolic) where if the employee, in the course of employment, goes off on a substantial detour and engages in activities that have nothing to do with work, then the employer is not liable.  Turns out, this concept becomes key.

Why Social Media and Respondeat Superior Is Difficult

For the most part, employer liability is relatively straightforward.  The question of whether someone was “on the job” or not is more or less clear for most employees as the doctrine of frolic and detour illustrates.  If your job is to put an engine together at Factory ABC, then the fact that you’re drinking at Random Pub probably means that you’re on “frolic and detour”.  If you were at the Factory, you were on the job; if you were doing something that had to do with putting engines together, you were on the job.

But when your job is doing social media for a company, it isn’t at all clear when your job ends and your personal time begins.

David Armano? Or Edelman?

There is an old conundrum within social media marketing of when a person is working to further her company brand vs. her personal brand.  Mike Arauz of Undercurrent says: “Our company’s online brand is really the sum of the online brands of the individuals who work there.”  Similarly, when David Armano of Edelman is blogging (on his personal blog) and tweeting (on his personal Twitter account), doesn’t Edelman the company benefit from his activities?  In some real way, the brand of Edelman is impacted (mostly positively) by David Armano’s private personal social media actions.

This is even when the person expressly disclaims any connection, as David does on his blog where he says right on the front page: This is my personal blog where I share thoughts + opinions that are solely my own.

I do the same on this blog, and have even when I was working for a company not my own.  But I’d be lying if I said my company, 7DS Associates, is not impacted by my blogging here or my Twitter activities or even my Facebook and Blip.fm activities.

This is not to say that respondeat superior somehow changes to “if the company benefits, even in some remote way, there is liability”.  Scope of employment still matters, of course.  But when your job is to promote the company, its agenda, and its products and services by the use of social media, then it isn’t clear when “scope of employment” ends.

The reason is that social media demands the elimination of the artificial barrier between the Company and the Community.  The driving principle behind Cluetrain, the fountainhead of social media, is to be authentic.  Human beings want to talk to other human beings.  That’s why Gary Vaynerchuk’s obsession with the NY Jets is part and parcel of the Wine Library story.  And why David Armano talking about music is a good thing for his employer.

As a result, social media employees appear to me to be 24 x 7 x 365 employees.  They’re always on the job, except when they’re offline (which likely means they’re asleep).  Frolic and detour — as long as one is online — simply does not apply to social media professionals, because social media itself includes so much that would be considered frolic and detour under traditional job descriptions.

So… Automatic Liability?

Does that mean that the company would always be automatically liable if the bad act was done via social media by an employee?  That seems a stretch.

Take a fictitious employee, John, who is a junior marketer at Major Brokerage XYZ.  One of his duties is to update the company blog.  One night, after a few beers, John goes on Facebook and downloads some pirated MP3’s.  Is Major Brokerage XYZ liable for copyright infringement because John is a “social media employee” and the bad act took place online?

I doubt that very much.  Even though his copyright infringement happened online, and even though John is a “social media employee”, I do think most people (and most courts) would see what he did as being outside the scope of employment.  Of course, much depends on the specific facts: if he used a company computer, or if Major Brokerage XYZ had an internal library of pirated MP3’s contributed by its employees, etc.  But generally, pirating MP3’s on one’s personal laptop at night is probably not going to implicate Major Brokerage XYZ.

Back to the Future

Twitter ipsa loquitur...

Seems to me that when it comes to social media and online, we’ll end up re-plumbing the original understanding of employer responsibility under common law.

First, I believe that the actual responsibilities of the employee should matter.  John, in the example above, is a junior marketer with a fairly limited “social media” responsibility: update the company blog.  If he were, instead, the VP of Marketing or the Director of Social Media, that might alter the result somewhat.

In my mind, the reason is that because social media so erodes the barrier between the personal and the corporate, greater authority in social media should carry greater responsibility.  Presumably the Director of Social Media would have the authority to use the entire range of tools available to the social media practitioner to promote the company, its brand, and its products/services.  She might be empowered to do things that a junior account executive might not be, especially since she may be pushing the envelope to see what works and what does not.

Furthermore, there is something to the notion that responsibility is correlated to benefit: to the extent that the company benefits, so it should also be responsible.  A junior marketer may yield precious little benefit to the corporate brand; the Director of Social Media might deliver enormous benefits.

Second, I think the actual nature of the “bad act” will be relevant — because it sort of goes to the “frolic and detour” doctrine.  Even though social media is infused with all sorts of personal things that would be frolic and detour, some things simply don’t match all that well.  There is a world of difference, in my mind, between defamation and downloading pirated MP3’s for example.  The former is much closer to the benefits gained by the Company by the activities of the Director of Social Media.

Third, I believe the company’s actual knowledge (or the infamous “should have known” standard of knowledge) will matter.  If the company encourages the use of Facebook by all of its customer service employees, and one of them engages in personal defamation on “personal time”, it’s hard to say the company did not know that she was using Facebook.  But if the Director of Social Media turns out to have a secret identity as a black-hat hacker who, as part of a social network of hackers, illegally broke into a bank’s system… boy, it’s awfully hard to hold the company responsible for something it had no knowledge of and had no reason to know.

The Law vs. Ethics

Now, that’s the legal angle to this whole issue.  What about the ethical one?

Suppose that Brokerage XYZ never knew that its Director of Social Media, who is active in all sorts of channels, is an active contributor to a vile racist social network in his own name — which of course, is connected to the Company’s brand through the power of Google.

There’s nothing illegal about that; this is America after all, and one is allowed to have vile racist views.

A client of Brokerage XYZ discovers this vile racist social network, finds that the Director of Social Media is a key organizer of it, and is enormously offended.  He demands an apology from Brokerage XYZ.  Is the Brokerage ethically bound to offer an apology?  Leave aside for the moment the question of whether that is good business practice or not (it is); is Brokerage XYZ somehow responsible (albeit not liable, since no illegality took place) for the bad acts of its Social Media Director?

While we might be tempted to answer, “Of course”… consider carefully what it means for a company to be “responsible” even if not legally liable for the social media actions of its employees.

For example, if a real estate agent, who has been encouraged to use Twitter and Facebook, posts wrong information on her Facebook profile that misled a consumer… what does it mean for the brokerage to be “responsible”?

I don’t have the answers [ED: what's new?] but these questions need to be explored as the technology and the business processes around them mature.  And if the embers of various flamewars can be coaxed into providing light… well, then the heat was worth it.

I look forward to your thoughts.

-rsh

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  • http://twitter.com/jbaumann72 Jennifer Baumann

    Hi Rob – I think this is great, but here is some food for thought! The legal concept of employer liability may be straightforward in some ways, but the actual application or interpretation of the concept can vary greatly based on the underlying claim (whether it be personal injury or defamation or copyright infringement) and the particular facts of the situation. In my mind, the discussion should be focused on whether a party can make a colorable claim that the employer is liable for the conduct of its employee. So, for example, if a company's employee working in sales (and not social media) makes an alleged defamatory statement against a competitor of its employer on a personal twitter account, the competitor may make an argument that the statement was made within the course of the employee's employment. The employer may argue against liability for the statement (e.g., pointing to the employee's job description) — but, it's too late — the employer is already embroiled in the dispute!

  • francesflynnthorsen

    Racist posting by a real estate licensee goes beyond ethical consideration. It invites a VERY legal discussion about Fair Housing.

    Real estate brokerages are held to task regularly for the actions and misadventures of their agents.

    The first line of defense for a brokerage in matters involving their agents is a comprehensive broker policy and procedure manual. Consider the weight of a policy manual relative to the task of acquiring errors and omission insurance. E&O carriers want brokers to certify agents receive, read, and sign off on brokerage policies.

    While most brokerages have a general policy manual in place, most do not have a comprehensive social media policy. (A one- or two-page Netiquette guideline policy does not count.)

    Real estate misbehavin' events are daily and available in many flavors:

    * Agents encourage consumers to break agency contracts.
    * Agents encourage consumers to break purchase contracts and lease agreements.
    * Agents utter “unmentionable” statements raising the dreaded antitrust question.
    * Agents swipe text, photos, and music in stark violation of copyright law.
    * Agents breach client confidentiality.

    I think 2010 will be a banner year for the legal eagles in real estate.

  • francesflynnthorsen

    Racist posting by a real estate licensee goes beyond ethical consideration. It invites a VERY legal discussion about Fair Housing.

    Real estate brokerages are held to task regularly for the actions and misadventures of their agents.

    The first line of defense for a brokerage in matters involving their agents is a comprehensive broker policy and procedure manual. Consider the weight of a policy manual relative to the task of acquiring errors and omission insurance. E&O carriers want brokers to certify agents receive, read, and sign off on brokerage policies.

    While most brokerages have a general policy manual in place, most do not have a comprehensive social media policy. (A one- or two-page Netiquette guideline policy does not count.)

    Real estate misbehavin' events are daily and available in many flavors:

    * Agents encourage consumers to break agency contracts.
    * Agents encourage consumers to break purchase contracts and lease agreements.
    * Agents utter “unmentionable” statements raising the dreaded antitrust question.
    * Agents swipe text, photos, and music in stark violation of copyright law.
    * Agents breach client confidentiality.

    I think 2010 will be a banner year for the legal eagles in real estate.

  • http://www.jobsindubai.com/ Emirates Jobs

    well in order for employees to be familiar in using social media for your business you must provide them a training so that they will knew how to use the social media in promoting your business.