When Nokia implemented a mobile marketing campaign to customers in Australia, they did not take into account their users’ privacy from a legal or brand standpoint. The company’s tips for getting the most out of a phone qualified as spam-texting, and instead of boosting business, Nokia was fined $58,000 fine earlier this year and has suffered reduced sales in the region.

“There are laws going into place now more and more around what you can do in mobile marketing,” says J. Robert Kamal, president, CEO and founder of Kohorts IT, a mobile marketing services company headquartered in Brighton, Mich. “ And the biggest common pitfall we’ve seen is companies trying to do this on their own without any experience at all.”

Businesses are increasingly looking to mobile marketing campaigns as mobile usage continues to rise. In fact, mobile Internet access will surpass traditional PC access by 2013, according to Gartner Research.

But in order to take advantage of this new era of marketing, it is increasingly important for businesses to focus on compliance with privacy standards – those set by governments and by customer expectations.

Account for privacy laws

One of the most common mistakes companies make is to create national or even global mobile marketing campaigns based on the assumptions of their local laws, Kamal says. Identify the privacy laws for all regions your campaign will penetrate.

Privacy laws, including the proposed US Mobile Privacy Act, commonly focus on: what data you will be collecting via mobile devices, who will have access to it and what it will be used for.

“Additionally, the user must agree to the privacy policy before data’s gathered, with the opportunity to opt out,” Kamal says. “And you must clearly identify yourself as the marketer. If those things aren’t in place, than you could be putting yourself exposed to legal risk on future litigation.”

Do not share information with a party not listed in your privacy policy – a common pitfall in business.

“If you collect data on a marketing campaign that you did legitimately for one purpose with a customer, and then you took the data from that customer and sold it to another company, that’s a problem,” Kamal says.

In addition to maintaining users’ privacy, you need to respect it in your marketing techniques.

“Engaging in spamming on mobile devices, thinking that because they’re your current customer, it’s not really spamming, is not necessarily the case,” Kamal says. “Those laws differ from country to country.”

Know your brand

In addition to legal issues, spamming can damage your brand image. Think about how you want to portray your business to customers.

“Is your brand a high-quality, sort of expensive brand? If it is, a spam marketing campaign or a campaign that does not respect privacy might actually damage that brand image that you spent so much time building.” Kamal says. “Look at spammers as a sign of a lowbrow marketing campaign.”

Take time to “purpose build” your campaign, as opposed to developing and implementing a mobile marketing program as quickly as possible. Consider a mobile services company to help you do so if you’re new to the process.

“Put a little thought into who your target audience is, what would be effective to actually run the campaign and (what your) intended results are,” Kamal says. “That reduces the risks and a lot of heartache with the client.”

Target your approach

Considering those factors allows you to target your approach in order to market to people with a high redemption rate. Using demand-draw or opt-in methods attract a relevant audience, as opposed to forcing marketing on random prospects.

“You can probably find a list somewhere that might have some relevance to what you’re marketing, but in the end, you’re going to have a high failure rate with just sort of a spam marketing program,” Kamal says.

Users who find the information irrelevant can easily block future messages from your company, as well as all automated messages.

“It’s hard for users to disseminate the difference between a fraud message and a legitimate marketing message unless you are taking into account the user’s privacy,” Kamal says. “Marketing that shows up on someone’s mobile device that they weren’t expecting doesn’t have a high return.”

Utilize social media

Mobile marketing and social media are inherently tied, as mobile devices are now driving most social media, Kamal says. By combining social media and mobile techniques in your marketing campaign, you can more successfully foster demand-draw.

“Set up a contest on social media that maybe draws demand and gets your message across,” Kamal says. “Then people actually ask for your offering. … Those campaigns tend to have a much, much higher redemption rate than campaigns where you just spam users.”

Social media also gives you access to a wealth of information on people’s wants and needs, which you can use to identify prospects.

“You can send back a response to their (post about selling a car) on social media saying, ‘Hey, we have this offer. We’ll buy your car at Blue Book price … as part of a promotion,’” Kamal says. “Then you can embed in the message back – let’s say it’s Twitter – ‘Just text this message to get your coupon code and show up at the dealer and you’ll get your reward.’

“Customers look at … those kind of marketing campaigns as actually useful. Because at the end of the day, if you were gong to buy a car anyway or trade in a car anyway, if you could get $500 off just for going to one dealer versus the next, you wouldn’t see that as an inconvenience. Nor is it an invasion of your privacy.”

How to reach: KoHorts IT, 810-355-1400 or http://kohorts-it.com

Published in Detroit
Saturday, 31 March 2012 21:02

What boards should know about social media

By now, most business leaders have recognized the opportunities social media offers in the areas of marketing, customer service, recruiting and relationship building. But not as many have weighed the rewards of social media use with the potential risks, including reputational, legal, employment and information security-related risk.

“Social networking is here to stay, and board members cannot simply ignore it,” says Jim Stempak, a principal at Crowe Horwath LLP. “For directors to perform their governance role effectively, they need to understand both the risks and the opportunities social media offers their organizations — and see that both are managed effectively.”

Smart Business spoke to Stempak about how to incorporate social media use into the governance framework to best protect and promote your business.

What are some of the risks businesses face when engaging in social media platforms?

The damage from a disgruntled current or former employee’s comments on Facebook, customer complaints on Twitter, or criticism of management on LinkedIn can be substantial and long-lasting.

An organization that uses social media for customer support (a channel in which they allow customers to post comments requesting assistance) opens itself up to new marketing and business opportunities, but needs to monitor these channels closely and timely. Customers can post criticism or derogatory comments about the business and its services and share negative comments with one another.

Businesses must also keep an eye on the social media activity of employees. Their voices can be as prominent as those of official company representatives. If employees post offensive or confusing content, customers might consider taking their business elsewhere.

What other ways can an employee’s use of social media harm operations?

While the acceptance of social media in the workplace can encourage talented candidates to seek out organizations that embrace this type of access, employees still need to understand that certain practices are exposing them and the company to risk. The explosion of social media in everyday life has generated public disclosure of a great amount of personal data. Malicious users can take advantage of information employees share and use it for social engineering attacks.

In addition, the human resources function needs to be made aware of the restrictions surrounding the use of social media channels to research and recruit new talent. Misuse of information found on social media sites to make hiring decisions could result in a claim of discrimination. Even though potential candidates post personal information on a public site, an expectation of privacy still exists in the hiring process regarding certain protected statuses, including disabilities, age, religion, etc.

Finally, employees must take extra care to understand the implication of the information they share with customers through these channels. While employee communication with the public and customers provides the means to build relationships and good will, if that communication includes confidential or sensitive information, a company could end up with a damaged reputation or even a violation of privacy laws and regulations.

How can leaders take advantage of the rewards and minimize the risks?

Having a robust corporate governance framework helps to clarify the role board members should play relative to social media, as well as address the complexity, interrelationships and variables that an organization must manage in order to strengthen governance over this area.

  • Board of directors and committees. In addition to being responsible for effective corporate governance, the board establishes the direction and values of an organization, oversees performance and protects shareholder interests. As part of overseeing performance, board members should understand the opportunities, as well as the risks, of social media use by the constituents of the organization.
  • Legal and regulatory. Labor practices are changing as a result of social media use in the workplace, and board members need to keep up with those changes to avoid exposure.
  • Business practices and ethics. The board needs to confirm that the social media policy the organization adopts is based on best practices and is enforced consistently. So that no stakeholders in the organization are neglected, a social media policy is best determined by a multidisciplinary team of senior representatives from human resources, legal, IT, marketing, public relations, risk management, compliance and other relevant functions. The resulting written policy needs to address the appropriate use of social media by employees at all levels and in all functions.
  • Disclosure and transparency. Shareholders need to be made aware of the risks associated with social networking and how the organization is managing them. Some public companies are now including social media as a risk factor in their annual reports.
  • Enterprise risk management. Before developing and implementing its social media policy, an organization should undertake an initial risk assessment that takes into account not only the likelihood of and potential damage from incidents resulting from social media use, but also the cost of opportunities lost as a result of social media not being used. Once the policy is in place, social media risk mitigation should be integrated into the organization’s everyday risk management processes.
  • Monitoring. After an organization implements its policy, it needs to monitor employee compliance. This requires periodic social media risk assessments, Internet and site monitoring, and control testing, all of which will show if internal controls need to be enhanced.
  • Communication. Communication holds together the various components of the governance framework and keeps the process improving over time. The board should ensure that the social media policy is communicated appropriately and relevant business practices and codes of conduct are addressed.

Jim Stempak is a principal in and leader of the Risk Consulting practice for the Crowe Horwath LLP Dallas office. Reach him at (214) 777-5203 or jim.stempak@crowehorwath.com.

Insights Accounting is brought to you by Crowe Horwath LLP

Published in Dallas

Everyone is talking about social media. As a result, I’ve read dozens of articles on the topic to better understand what it means for business. I even have a team that manages it and sends me reports on a regular basis.

However, it wasn’t until I joined Twitter, Foursquare and Facebook myself that I began to truly understand it. When I started using these platforms for my own personal and social purposes, I began to get what the fuss was all about.

Not a spectator sport

Just like anything else, real-world experience adds more value than research alone. If you lead an organization, joining social networks gives you the opportunity to listen and respond to your employees, customers and fellow industry leaders, as well as spot trends and issues.

Don’t feel pressure to jump on Twitter, for example, and just start tweeting away. Ease into it. Follow people of interest and listen to the conversation. Watch how people use hashtags, @replies and retweets. Be yourself. And remember, it’s not supposed to be work, it’s supposed to be fun.

I would encourage you to begin as an average consumer and try not to think about it from a business perspective. Once you’re a comfortable user of a platform, the business aspect will come naturally.

Resist the ad urge

We can’t help ourselves. We read all about social media and how it can drive sales, and we feel inclined to join Facebook and blast ad copy. Resist. Try to think of social media as a public relations function rather than an advertising function.

Social media is about two-way communication and building relationships. So what’s important in a relationship? Honesty, transparency, sense of humor, listening and making people feel special. The same rules apply in social media.

As a business leader, social media provides you with the opportunity to connect one on one with your customers. Share what you have in common. Help them understand how your business fits into their lives. Let them participate in building your brand. Make a difference in their communities. Acknowledge and reward your biggest fans, and win back fans that had a bad experience.

While contests, promotions, deals and giveaways can be a lot of fun, remember there is value in building trust and loyalty through simply listening and responding on social platforms. Of course, this is just my opinion, but I say build relationships first, sell your product second.

Lead, follow and like

Whether you decide to join social media networks or not, your customers will be there talking about your brand. You can help lead the conversation, correct false information and attract new customers or you can leave that to someone else to do on your behalf. Taking a leadership position when it comes to social media will send a strong message, and your team will surely follow.

The way the world communicates is changing. Get on the bus and help lead the change.

Paul Damico is president of Atlanta-based Moe’s Southwest Grill, a fast-casual restaurant franchise with more than 430 locations nationwide. Damico has been a leader in the foodservice industry for more than 20 years with companies such as SSP America, FoodBrand LLC and Host Marriott. He can be reached at pdamico@moes.com.

Published in Atlanta

A growing number of business executives are taking to blogging, and with good reason. The benefits of well-executed CEO blogs are significant and vast. But blogging from the C-suite has plenty of pitfalls, too, particularly legal ones. So it’s essential to plan strategically to make sure your digital journal exploits the power of the form while avoiding the legal traps associated with executive-penned blogs.

“There are obviously terrific benefits to be gained from executive blogging,” says Tim Van Dyck, a partner in the Boston-based law firm Edwards Wildman Palmer LLP. “More and more CEOs are part of the Google generation and, therefore, feel more comfortable about blogging than, certainly, people in my generation do.

“The executive blog is a wonderful egalitarian method of communication,” adds Van Dyck, who chairs Edwards Wildman’s labor and employment group. “It can be a very powerful marketing tool. It can be a very effective means to recruit employees and to communicate and organize knowledge. It’s a great way to share information with clients and vendors. And it’s also a wonderful opportunity to put a human face on a company and to offer an exclusive look at the inner workings and culture of a company that traditional media can’t parallel.”

Nancy Flynn, executive director of the ePolicy Institute and author of several books on corporate blogging and social media, concurs, noting that blogs “can be a great way for C-level executives to communicate with customers, prospects, potential employees, decision-makers, the general public and the media.”

Watch for potholes

Those are a few of the benefits CEOs can realize for their companies by blogging. But those potential benefits are surrounded by serious hazards, says Flynn, whose books include “Blog Rules” and “The Social Media Handbook.”

“CEO blogging opens the organization up to a broad range of potentially costly risks, including workplace lawsuits, regulatory fines, lost productivity, public relations nightmares, security breaches and mismanaged business records,” she says. “Any time any employee or executive, right up through the CEO ranks, blogs on behalf of the organization, you really have to take a strategic approach to that blog, and you have to adhere to your organization’s blog policy, your content rules, your ‘netiquette’ guidelines and all of your other employment policies, including harassment and discrimination, code of conduct, and on and on.

“Long story short, you have to be mindful of the fact that content creates risk, so the easiest way to control electronic risk is to control your content,” Flynn says.

So what’s the best way to control that content? According to Van Dyck, having a corporate blogging policy is a must — and not merely having such a policy in place but steadfastly enforcing it.

“The company’s blogging policy needs to be clear and unambiguous in terms of explaining what kinds of blogging are appropriate and what kinds of blogging are inappropriate,” Van Dyck says. “And that policy needs to be enforced uniformly so that all employees, including executives, are subject to it. Particularly with respect to executives, who come into daily contact with proprietary insider information. The company should identify a gatekeeper, such as an in-house counsel, who reviews any executive blogging material before it’s posted. In other words, there needs to be a filter before it goes out.

“Obviously, both the executive and the company need to make clear that the blog is being monitored by the company,” Van Dyck says. “The executive, I think, needs to make sure that whatever is being blogged about is not subject to misinterpretation. Even something as innocuous as an executive saying, ‘Something big’s going to happen with the company,’ is a potential minefield. That could be construed as the company going public or the company being bought or entering into a new product line. And all of those things really need to be kept confidential.”

The corporate blogging policy should extend beyond the executive who is writing the blog. Comments appended to blogs by readers have to be monitored, as well, Flynn says.

“If CEO bloggers are going to allow third parties to comment on their blog, then you want to post a policy on your blog — your community blogging guidelines — to let those third parties know that, ‘Yes, you’re welcome to post your comments on our blog in response to our CEO’s posts, but here are the rules — here’s what’s allowed, here’s what’s not allowed.’ And you want to, either through technology or through a human set of eyes, monitor those comments,” Flynn says. “You definitely want to review those comments before they go online. Because you don’t want something posted that is unlawful or uncivil or a poor reflection on your company.”

Vet, vet, vet

Another must for executive bloggers, in order to avoid falling into one of the many legal traps associated with the form, is to have all blog posts reviewed by a legal expert before they’re launched into cyberspace.

“I know that the blogosphere doesn’t like to hear this, but I think having blog posts vetted before they’re published is a great idea,” Flynn says. “It’s something that I recommend to all of my clients. Here’s why: You wouldn’t publish your organization’s annual report without having it reviewed by your marketing department and your legal department. You need to think in terms of your blog posts as reflections on your company. And that content in those blog posts is as fraught with potential risks as any other kind of literature your company puts out.

“Just because blogging is electronic doesn’t mean that you can play fast and loose with the language,” Flynn says. “It is a more casual way of communicating, but in spite of its casual nature, it’s still fraught with real potential problems. So I do think it’s a good idea to have legal take a look at blog posts, particularly if it’s the CEO, because the CEO is the last person who you want to be making a gaffe and creating potential problems for your company.”

Van Dyck agrees about the importance of having executives’ blog entries vetted before they’re posted.

“I think that’s a very good idea,” he says. “At least with respect to posts that are authored by high-ranking executives. It gives the executives more protection, and it gives the company greater protection. There’s no downside to having those posts vetted by, if not in-house legal counsel, at least somebody who is aware of and knows what to look for in terms of the risks.”

The trend toward mobile blogging makes preliminary legal review of blog posts even more crucial.

“Technorati recently reported that 25 percent of bloggers are now engaged in mobile blogging,” Flynn says. “So if your CEO uses a smartphone or a tablet to post to your corporate blog, chances are, in that kind of circumstance, the writer might be inclined to take some shortcuts. You might be working a little faster and abbreviating language and maybe not taking as much time to reflect on whether this is really what you want to say or how you want to say it or whether this is something that’s really appropriate to put in the blog or whether this could get us into any trouble. So that’s another reason why I think it’s a good idea to have legal vet those blog posts.”

Keep secrets secret

What’s the most horrible thing an executive blogger can do when he or she writes a blog? What are the worst kinds of messes to avoid stepping in? According to Van Dyck, one of the most egregious errors a CEO can make is to slip up and reveal a trade secret or a similar type of proprietary company information.

“I think the greatest risk is the inadvertent disclosure of confidential and trade secret information,” Van Dyck says. “As we all know, high-ranking executives come into daily contact with company trade secrets and proprietary information. And the advent of executive blogging has dramatically affected who can communicate with whom, when, how, why, and where. Blogging’s availability means that executives can now transform their previously informal personal communications into a published, public document. And that’s a capability that is very much at odds with trade secret laws’ reliance on limited communication.

“In my view, executive blogging has significantly enhanced the likelihood of catastrophic disclosures of trade secrets and other proprietary information, so I think that’s probably the most significant risk associated with executive blogging.”

Van Dyck notes that he’s had firsthand experience with this type of circumstance.

“I had a situation where we represented a company who wound up using information that had been posted on a competitor’s blog,” he says. “The other side came back and explained that it was confidential. And we had a wonderful defense to that, because the information had been disseminated to the public by way of a blog.”

Flynn agrees that it’s critical for executives not bring up anything remotely related to proprietary company information in a blog.

“You have to keep your company secrets close to your vest,” Flynn says. “You want to be real careful that you don’t disclose confidential company information. You don’t want to reveal your secret recipe or expose your trade secrets or talk about your business partners’ trade secrets. Because once the secret’s out there, it’s no longer a secret.”

Flynn points out that it’s also crucial to make sure CEOs’ blog posts don’t violate any regulatory rules.

“Let’s say you do business in the financial services world,” she says. “Let’s say you’re publicly traded. You definitely don’t want to jump the gun and publish any posts related to sales or revenue in advance of the SEC’s specific guidelines on when that information should be released and how it should be released.

“Similarly, if you’re in the health care arena, if you were to post any content that violated HIPAA — if you revealed confidential protected health information related to a patient — you could be in trouble,” Flynn says. “At the end of the day, you really have to look at your blog the same way you should be looking at your e-mail, and make sure you’re adhering to the law and to regulatory rules and to your own organizational guidelines.”

Ultimately, when executives write blogs, they become the online face of their companies, so they had better keep their game face on.

“What C-level and executives and all executives need to bear in mind is that a business blog is different from a personal blog in that it is a reflection of your individual professionalism, it is a reflection of your organization’s corporate credibility, and it does present the organization with a lot of potential risk,” Flynn says.

If the CEO blogger commits a serious misstep, Flynn says, “It’s not the CEO who’s going to be sued, it’s the whole organization.”

HOW TO REACH: Edwards Wildman Palmer LLP, www.edwardswildman.com; ePolicy Institute, www.epolicyinstitute.com

Published in National
Wednesday, 07 March 2012 17:15

Special Report Legal: Karen Lefton

Two points that CEO bloggers should keep foremost in mind are, first, never underestimate how many different groups of people may read what you write, and second, despite the blog form’s outwardly ephemeral nature, everything you post is almost certain to be permanently accessible online, whether you want it to be or not.

Below are three tips for executive bloggers compiled by Karen Lefton, a partner with Brouse McDowell LPA.

Write for your customers, but know that competitors are reading.

Be particularly careful not to disclose confidential information, trade secrets, business plans — sensitive information not known to the public. There is a tendency to blog from the comfort of your home after a long day at work. Don’t. This is not the time for a fireside chat. A blog must be written with the same thought and care as a speech to your Chamber of Commerce. More people may see it.

Write for your supporters, but know that detractors are reading.

Be careful with your facts. For every fact that can be checked, there is a former (disgruntled?) employee who will check it. When things are not black or white, he will take issue with your shade of gray. Avoid references to age, race, gender, ethnicity. What difference does it make that your new marketing manager is “young”? His creativity and enthusiasm matter. His youth does not (except, of course, to the over-40 manager that he replaced.)

Write for today, but know that your words will live forever.

A blog can be like a bad penny. It will keep on turning up. Be prepared for anything you’ve ever written or taped — a blog, annual report, speech, interview, legal brief — to be accessible on the Internet. As search engines continue to improve, it will be easier to connect your name and title with postings by you or about you. Maximize the benefit by controlling your message. Minimize the detriment by treating all your communication as though it will last forever. It will. And if you’re ever involved in litigation, it will be printed out in large type on a big screen for the world to see — again.

Karen C. Lefton is a partner with Brouse McDowell’s labor and employment practice group, mainly representing businesses. She has a special interest in media law, particularly defamation, invasion of privacy and Internet issues.

Published in Akron/Canton

Many companies are expanding their marketing presence in social media outlets. However, not all companies are taking appropriate steps to ensure that they “own” their social media accounts when the employees who create them leave, says Richard Douglass, a partner with Novack and Macey LLP.

“It is important for companies that use Twitter or other social media as part of their marketing campaign to clearly define what rights, if any, the employees who tweet on their behalf have to the social media accounts and content,” says Douglass.

Smart Business spoke with Douglass about who owns a social media account and how to protect your business when social media employees depart.

What ownership rights are there in a social media account?

A social media account has two parts. First is the account itself. This includes login information and the people who have signed up to receive messages posted to the account. It is this aspect of an account that typically provides most of the value to the owner. For example, a Twitter account with 10,000 followers should be worth more than an account with 1,000 followers because 10 times as many people are reading the messages.

Second is content, messages posted to the account by an employee to share with the public. Rights to the content are generally governed by the same copyright principles that govern other written material produced by an employee. A question surfacing now regarding corporate Twitter accounts is not who owns the content but who has the right to control the account.

Have the courts decided who owns that right?

Not yet. The issue of who controls user rights to a Twitter account has not been widely litigated, but two decisions rendered last fall provide guidance.

A U.S. District Court in New York issued a preliminary injunction requiring a former employee to turn over to her employer all passwords and other login information for the company’s social media accounts that she used during her employment. The court relied on a fairly generic copyright work product agreement to support its decision. And, probably because of the agreement, the employee did not dispute that the employer owned the accounts.

Because ownership was not disputed, the court did not have to engage in an in-depth analysis of whether the user rights to the accounts and the subscribers were covered by the work product agreement. This decision signaled that courts will likely be willing to enforce agreements requiring former employees to turn over the keys to social media accounts when they leave.

On the other hand, a U.S. District Court in California was faced with a dispute over the ownership of a Twitter account, but it appears the employer and employee did not have any agreements concerning ownership of the account or the content. As such, the employer was forced to rely on other legal theories to assert control rights.

While employed by the plaintiff, the employee used the account to promote the plaintiff’s website to increase traffic and increase advertising revenue. When he left, the Twitter account was alleged to have 17,000 followers. The employer claims it asked the employee to turn over the account after he left, but he refused. Instead, he changed the name on the account to remove reference to his former employer and now uses the account to post messages on behalf of his new employer. As of February, the account had more than 24,000 followers.

Without a written agreement as to ownership and control over the account, the employer is asserting claims based on other legal theories. First, it claims the list of account followers is a trade secret. This argument seems doomed to fail given that follower lists are available on Twitter’s website. The employer also claims the account password is a trade secret. That, too, seems to be misguided, as the employer does not gain value from the password itself and it could be changed at any time by the ex-employee.

Second, the employer claims the ex-employee is interfering with its business relationships by not turning over the account. This claim, however, does not seem to answer the relevant question — who owns the user rights to post messages on the account. These claims start from the assumption that user rights belong to the employer and assert that the ex-employee wrongfully refused to turn them over. Yet, if the ex-employee owns those rights, then he did nothing wrong. The employer’s claims have survived motions to dismiss, but the litigation is likely far from over.

How can companies protect their rights to social media accounts after an employee leaves?

Express agreements defining who owns company social media accounts. The New York case shows that courts likely will enforce agreements over the rights to access, just as they enforce agreements governing ownership of the intellectual property rights to the content.

In essence, the collection of people subscribed to the account is a direct byproduct of the content, so one could argue that an agreement regarding content also covers the account. Nevertheless, the account itself is a sufficiently unique asset that it should be separately addressed.

The easiest solution is to require employees using social media on behalf of their employer to sign an agreement granting all user rights to the accounts to the employer, specifying that it will retain such rights after the employee leaves. The agreement should identify the accounts for which the employee is responsible and state that, when employees leave, they will turn over account passwords and relinquish all rights to access subscribers.

Taking this precaution at the start of an employment relationship should avoid disputes later. And, if disputes do arise, they put the employer in a strong position in any litigation.

Richard Douglass is a partner with Novack and Macey LLP. Reach him at (312) 419-6900 or rdouglass@novackmacey.com.

Published in Chicago

Over the last year, the National Labor Relations Board (NLRB) has issued a number of rulings pertaining to employee use of social media. These rulings impact how employers can word and enforce their social media policies.

“The NLRB has ruled that online employee comments and conversations — regardless of whether the employees are union or nonunion — are ‘protected concerted activity,’ similar to coworkers chatting around a water cooler, so long as they are more than ‘personal attacks’ against a specific person,” says Brendan Feheley, a labor attorney at Kegler, Brown, Hill & Ritter.

Feheley adds that while an employer can’t control every move its employees make online, employers do need to monitor content and be conscious about what employees are saying in order to protect their brands. At the same time, the employer needs to be careful not to violate employee rights or take actions that could be found to be discriminatory in nature.

Smart Business asked Feheley how companies should evaluate their existing social media policies.

What are some of the key areas where a company needs to protect itself?

The protection of trade secrets is very important. You have to be very careful about the types of recommendations employees give; they can’t endorse products without disclosing themselves as employees, and certain statements can constitute SEC violations. There is also a huge brand protection issue. Social media is the way Gen Xers and Millennials get their information, buy things and make decisions. You want to be sure your company is seen in a favorable light. Companies also need to be careful about how they approach their employees’ personal use of Facebook. You may want to mention in your social media policy that you may periodically monitor employees’ Facebook activity. If they are aware of this, perhaps they will take steps to protect their profile, which basically is a protection for both the employee and your company. Companies should be careful about running Facebook searches on job applicants. Wait until the initial round of in-person interviews has taken place to help protect your company against claims of discrimination based on a Facebook profile.

How can a company determine if its existing social media policy is strong enough?

Pay attention to what is going on in your specific workplace. Do you have problems? Are you seeing negative Facebook posts? Do you see instant messages going through Facebook? If so, is that causing a major problem with productivity? If you’re experiencing problems, change the policy to address them.

How can a company avoid infringing on employee rights?

Be in touch with how the courts are interpreting social media cases. Your policy cannot be overly broad. Put language in the policy that states that nothing is intended to violate state, federal, or NLRB laws. Be cautious any time you discipline an employee for something he or she does online. Discipline can mean many things — a written warning, a schedule change. It’s fine to talk with the employee; make sure they’re aware of what you want them to do. But be careful about disciplining them.

Does a company need a separate policy for every social media outlet out there?

Probably not. An alternative is to list each outlet and provide general guidelines for each. It’s also prudent to explain what types of information you monitor, save and may possibly read (e.g., instant messages and e-mails). Another thing to be aware of is the high risk that today’s camera phones pose. These devices make it very simple for employees to take pictures or videos of client lists and other confidential documents. You may want to consider adding wording to your policy that tells employees that if they use a smart phone at work — regardless of whether they own it or you own it — that you reserve the right to monitor the data and pictures stored in the device (similar to the way you might reserve the right to search an employee’s purse or bag).

How can a company best implement its policy?

Train your managers the best you can. There is a very fine line between Big Brother and the reasons behind the policy. Make sure your managers know you are monitoring the messages they give to employees about what employees can and cannot do. Managers shouldn’t be using the policy to threaten employees — but rather they should be promoting the policy as a tool that will protect everyone at the company. The policy should not be a sword, but a shield.

Who should be responsible for the social media policy and how often should they revisit it?

A committee should be responsible; it should be composed of a mix of employees including representatives from IT, HR and marketing. The policy will only be as good as its enforcement. Due to the rapidly changing nature of social media, the committee should meet once every two to six weeks — or at least once per quarter — to discuss developments. The IT folks might address how much time employees are spending online, the HR staff might bring specific online postings to the committee’s attention, etc. This is not the committee members’ regular job, so be sure the meetings are on the schedule so the discussions can take place.

BRENDAN FEHELEY, associate at Kegler, Brown, Hill & Ritter, specializes in labor and employee relations. Reach him at (614) 462-5482 or bfeheley@keglerbrown.com.

Published in Columbus
Tuesday, 31 January 2012 19:01

How "social" do you need to be?

If you have heard any of the buzz on the street lately, you are aware that social media is here to stay, and the businesses that leverage this channel and participate strategically can reap rewards. “While it is true of social media marketing today that, ‘if you’re not in, you’re out’,” says Kevin Hourigan, President and CEO of Web design, Web development and online marketing agency, Bayshore Solutions, “A very valid question is; how ’in’ do I need to be?”

Smart Business spoke with Hourigan about how to get the most out of social media, and what the right social moves are to achieve it.

What business results should I expect from social media?

The key to realizing a specific business’s ‘reward’ from social media, is defining and understanding your realistic expectations, finding your strategic fit, implementing the tactics that align, and taking a disciplined approach to daily social media activity.

Businesses need to understand that only in specific situations will social media tactics deliver straight-line results of leads and sales.  It is possible, but the circumstances required are not a viable reality for many businesses.  Indirect influence on leads and sales is where social media can be a key contributor to business growth.

Business results that social media is best poised to deliver include:

  • Brand reputation management – you can listen and act to guard your businesses.
  • Target market intelligence – trends in needs, uses and attitudes about your brand and can be learned by simply listening.  Participating in response can earn you customers.
  • SEO performance improvements for your website – Search engine algorithms now include social media engagement.  Linking, keyword and search results benefits are also outcomes of properly optimized social media.
  • Brand and expertise positioning – through many avenues to present your brand and offer expertise that feeds top of mind awareness and brand preference.
  • Influencer marketing – social media allows you to identify and align with key people online whose word of mouth (or word of keyboard) can exponentially motivate your target customers.
  • Crisis Management – An opportunity to quickly and broadly distribute messaging.
  • Public Relations – Social Media can be considered the Public Relations of the 21st Century.
  • Encouraging visits to your website – and eventual conversions.

The right social media strategy will be unique to every business. Developing this strategy involves the Marketing 101 exercise of knowing your target customers, discovering where they are online as well as who and what motivates them.  Once you have defined this, the right expectations, tactics, metrics, measurement tools, and workflows triggered from those metrics can be determined and selected for your social media strategic plan.

What are the must-do tactics in Social Media?

A 2011 Marketing Sherpa study cited the top three ‘most effective’ social media tactics as:

  • Optimizing social media sites to improve search engine rankings
  • Building one to one relationships with bloggers, and other social influencers
  • Moderating company branded social networks

Content marketing through social media (distribution, sharing, and commenting) were the other most effective tactics cited.  The lowest ranking ‘most effective’ tactic was outright advertising on social networks.

The best place to start is by establishing business profiles in the social networks relevant to your audience and strategy. These will most often include, Facebook, Twitter, Linked In, and content distribution and bookmarking sites like YouTube, StumbleUpon, SlideShare and Google Plus.

This is just the start.  You must commit to keeping these profiles updated, fresh and relevant.  The right timing of updates varies among businesses and social media, but not updating guarantees failure.  Relevant participation includes offering advice, insights, tips, expertise, response to comments and questions, special promotions, and exclusive values related to your business and your target customer.  Relevant, successful participation is rarely a continual barrage of outright or veiled sales pitches.

How much do I really need to put in to social media?

Just a few years ago, a big selling point for social media was, 'It’s essentially free!' This is a dangerous and false statement.  Social media is a marketing channel with unique but real 'costs' of participation.  You may not be paying for your profile or message space, but to be effective, social media requires resources of time and talent in developing, delivering, tracking, monitoring, responding appropriately and adjusting campaigns.

eMarketer’s 2011 study of forecasted investment in social media in the next three years showed: 87 percent of businesses plan to spend more than 5 percent of their digital marketing budget on social tactics, 55 percent of businesses plan to spend over 10 percent of their budget, and 28 percent will spend over 20 percent of their budget on social media tactics.  This reflects the investments in resources that are a reality of effective involvement in today’s social media arena.

Because the nature of social media is an open two way communication, just ‘broadcasting’ messages cannot be your entire strategy.  The ability to offer competent, prompt response and engagement is critical to social media success.  It can also affect the bottom-line success of a business, so you can’t entrust this to an intern.

A recent statistic by Conversocial illustrates this point by revealing that 88 percent of social media users interpreted a business’s action or inaction in responding to social media comments and inquiries as a reflection of their ‘true colors’ in customer service.  They further said that inaction would make them ‘somewhat less’ or ‘far less‘ likely to do business with that company.

Effective social media marketing requires strategy, expertise and dedication. Enlisting expert assistance to help develop and even implement your social media marketing strategy (either in-house or partnering for this expertise) can streamline the process and place you competently into the right social circles to help grow your business.

<< For a snapshot of Bayshore Solutions Web marketing methodology, visit: http://www.bayshoresolutions.com/about-bayshore-solutions/methodology.aspx

Kevin Hourigan is the president and CEO of Bayshore Solutions. Reach him at (877) 535-4578 or www.BayshoreSolutions.com.

Published in Florida

If employees treat social media as a sort of online water cooler where comments are posted about colleagues, managers and customers, what rights do employers have to control the conversation?

Social media networks like Facebook and Twitter open up a floodgate of human resources issues that companies must address with a formal policy and open communication with employees — before a litigious situation arises. Can a business owner fire an employee for bad-mouthing the company? Is it permissible for a worker to complain about company decisions and managers on Facebook? How “private” are these social media postings, really?

“Recent court cases shed light on the responsibility employers have to create a solid social media policy and to talk with employees about how social media is used in and out of the workplace,” says Christopher Carney, chair of the Labor and Employment Practice Group at Brouse McDowell in Cleveland.

Smart Business spoke with Carney about social media regulation and what employers can do to be proactive in this fast-changing area of business and the law.

What are some common mistakes businesses make when using social media?

It is no secret employers use social media to screen applicants. However, they can get into trouble when they use social media to screen out applicants. It is illegal to discriminate against someone in the hiring process on the basis of race, gender, religion, disability or sexual orientation. It is also illegal to use an applicant’s Facebook page or Twitter account to eliminate candidates. The bottom line is that if you possess this information and it goes into your decision-making process, that is against the law.

The best way to avoid problems in this area is to have a third party do the screening. That way, the ultimate decision-maker does not see any legally protected information discovered using social media. If you cannot use a third party, then your company’s HR department should do the screening and not provide you with any legally protected information.

Another common mistake employers make is to ‘friend’ employees with a fake profile or seek information about an employee through a third party that is ‘friends’ with the employee. Even with the Internet, there is an expectation of privacy with Facebook because the profiler invariably limits access to his or her Facebook page.

How has the government attempted to regulate the use of social media by employers?

Here is some background: Section 7 of the National Labor Relations Act (NLRA) protects employees who engage in ‘concerted activities for the purpose of collective bargaining or other mutual aid or protection.’ The NLRA’s protections are not limited to union organizing activities or employee conduct in a unionized environment. ‘Mutual aid or protection’ includes any group of unrepresented employees talking about wages, hours and working conditions.   In 2010, the National Labor Relations Board (NLRB) made national headlines by issuing a complaint accusing an employer of unlawfully discharging an employee for posting critical remarks on her Facebook page questioning her supervisor’s mental health. Since then, the NLRB has continued its focus on social media, aggressively prosecuting cases where employees are discharged or disciplined for social media use. Two recent NLRB administrative law judge decisions illustrate how the NLRB is shaping the law in this area.

In September 2011 the NLRB found that an auto dealer did not violate the NLRA when it fired a car salesman who had posted on Facebook photographs of and made sarcastic comments about an accident that occurred at one of the employer’s dealerships. The judge concluded that the posting was not protected because it was posted ‘without any discussion with any other employee . . . and had no connection to any of the employees’ terms and conditions of employment.’ In another decision that came out at the same time, a judge held that a nonprofit, social service organization did violate the act by firing five employees who posted on Facebook negative comments about their workloads and staffing issues. The judge determined that the terminated employees’ discussions were protected, concerted activity because it involved conversations among co-workers about the terms and conditions of their employment, including job performance and staffing levels.

Notably, both cases dealt with non-union employers.

What should business owners take away from these cases?

The natural inclination for a business owner is to take action against an employee for making critical statements about the business or its owners, particularly in such a public forum as the Internet. However, employers should proceed with caution. General griping is one thing, but if the criticism is tied to a term or condition of employment and is between or among co-workers, then it is likely protected. Any adverse employment action could potentially violate the law.

Should employers have a social media policy?

Yes. And any such policy should be narrowly tailored to avoid ambiguity. It should inform employees that the policy does not prohibit employees from discussing or disclosing the terms and conditions of their employment. Also, any social media policy should clearly state that employees are prohibited from disclosing confidential or proprietary information on social media. It also should prohibit employees from making disparaging comments about the company, its employees or its customers. Finally, the policy should place employees on notice that the employer may monitor employee postings in order to minimize any expectation of privacy the employees may think they have.

It’s a good idea to consult with a legal professional when crafting a social media policy to be sure that the house rules you set comply with the law and cover any worst-case scenarios that could occur.

Christopher Carney is chair of the Labor and Employment Practice Group at Brouse McDowell in Cleveland. Contact him at (216) 830-6830 or CCarney@brouse.com.

Published in Akron/Canton

While providing intriguing new business opportunities, social media channels also expose organizations to new risks. Social media channels represent far more than an intriguing business opportunity; they have become part of the fabric of social interactions for an increasing segment of the population. Rather than trying to put the social media genie back in the bottle, organizations should implement guidelines that are based on their risk assessment and promote the responsible use of social media.

“A set of guidelines stands not only to reduce the negative impact to the organization but also to reap the benefits of social media,” says Paul Feather, a manager in the Crowe Horwath LLP Dallas office. “By implementing guidelines based on a risk assessment, organizations can promote the responsible use of these powerful tools and reap their benefits.”

Smart Business learned more from Feather and Jim Stempak, principal at Crowe Horwath LLP, about how to properly monitor, manage and execute a social networking strategy.

What risks do businesses face in regard to their brand?

An organization’s employees, customers, and vendors can either be its greatest ambassadors or seriously undermine its brand and image. Organizations can’t control or change feedback on social networking sites — but they can be at greater risk if they fail to monitor it and respond in a timely manner when a response is appropriate.

An example of a company aware of this risk is Gap. In October 2010, the company changed its logo and promptly received negative feedback on social networking sites. Because Gap monitors such feedback, it was able to act quickly and change the logo back to the famous original.

Employees, with their insider knowledge and perspective, have the potential to cause even greater brand damage. In April 2009, Domino’s Pizza experienced the broad reach of social media after two employees posted a video on YouTube that showed them violating various health-code standards. By the time Domino’s realized it had a PR problem, millions of people had already seen the video and joined in discussions on Twitter.

Based on its presence on social media sites, an organization might also face reputational risks associated with managing its own message. An attempt to restrict negative commentary on an interactive site can draw more unwanted attention to an issue and create a public relations disaster.

How can social media present employee-related risks?

When hiring, HR might check candidates’ profiles on social media sites. But, even a site that is publicly available can expose information about a restricted class such as religion, race, age or sexual orientation, or information that is not accurate — a doctored photo, for example — and could lead an organization to make incorrect assumptions. Employers must also use care when terminating an employee due to something he or she posted on a social networking site, as there are laws that protect certain online activity under the National Labor Relations Act.

The social networking environment can often lead to a blurring of the line between personal and professional. When coworkers interact on sites like Twitter or Facebook, there is the potential that a coworker’s actions or personal opinions could be deemed offensive or inappropriate. Or, a boss’s personal views posted on a site could make the work environment uncomfortable for subordinates.

Perhaps the most harmful consequences to a business could come from information security risks. Employees can intentionally or inadvertently post confidential information about the company or a customer; individuals can post information such as passwords or user IDs that can leave them vulnerable to cyber attacks and theft; and viruses and other malware can make their way into company networks through social media sites.

How can businesses address these risks?

Engage a multidisciplinary team to document intended social media use, including HR’s use of social media for employee screening and cause for termination as well as employees’ activity, such as accessing sites on company devices, and the impact on productivity. Find out whether employees and supervisors are connected to one another and to customers on networking sites.

Assess the risk of social networking on company technology. Have you seen an impact on network connectivity due to social networking volume? Have you been affected by viruses originating from social media sites? What technology is available to monitor and manage social media use on the company network and mobile devices?

Once the risks to the company brand, technology and employment practices have been established, it’s vital to expand current policies and implement safeguards in regard to appropriate employee use. Define what type of social media use is acceptable during business hours and document standards about using social media relative to providing opinions about the organization; also define the consequences of noncompliance.

Expand anti-malware software to encompass attacks over social media channels, define how use of social media will be restricted and define the safeguards the organization will implement to detect social media-based malware and attacks.

Outline how marketing campaigns using social networks will be developed, approved and deployed to create a consistent messaging strategy. Also implement vendor management policies, including nondisclosure agreements and vendor contract standards; define how third-party organization with access to the organization’s data and assets will manage their employees on social networks.

Finally, provide social media policy training for all employees and create a system for monitoring social media channels. A new breed of software products and vendor services called social customer relationship management (CRM) tools helps organizations listen on public channels for social media chatter that affects their organization.

Paul Feather is a manager in the Crowe Horwath LLP Dallas office. Reach him at (214) 777-5230 or paul.feather@crowehorwath.com. Jim Stempak is a principal in the Crowe Horwath LLP Dallas office. Reach him at (214) 777-5203 or jim.stempak@crowehorwath.com.

Published in Dallas