© McGloin, Davenport, Severson and Snow, P.C. -

2011

Keep It Legal: The Legal Implications of Social Media

Michael J. Dommermuth, Esq.J. Randolph Earnest, Esq.(303) 863-9800MikeD@mdsslaw.comRandyE@mdsslaw.com

© McGloin, Davenport, Severson and Snow, P.C. -

2011

Chrysler Fires Social Media Agency

New Media employee mistook the official account for a private Twitter account last week and compounded the error with an F-bomb:

Employee Post: "I find it ironic that Detroit is known as the #motorcity and yet no one here knows how to (expletive) drive."

© McGloin, Davenport, Severson and Snow, P.C. -

2011

Business and Personal Use Overlap

On-line personal identity and professional identity may be the sameUnregulated employee contact with public. How do we control?

© McGloin, Davenport, Severson and Snow, P.C. -

2011

Legal Issues

Compliance with Colorado and Federal Law

Advertising

Dealership Liability for Acts of EmployeesDefamation and Bullying Employment Issues

Liability of Employers

© McGloin, Davenport, Severson and Snow, P.C. -

2011

Best Practices

One employee responsible for all social media content produced by dealership Reality: Sales people will have their

own personal pages

Personal comments may reflect on dealership

© McGloin, Davenport, Severson and Snow, P.C. -

2011

Compliance with FTC Guidelines

FTC guidelines prohibit: “Untrue, unfair or deceptive acts or practices.” Covers advertising claims, marketing and promotional activities and sales practices in generalFTC penalties

© McGloin, Davenport, Severson and Snow, P.C. -

2011

Compliance with Auto Industry Division Regulations

What is advertising under dealer regulations? http://www.coloradodealers.org/reg_state.php

Broadly Defined: Any “commercial message…on a computer display…” Includes:

Dealership website Social media posts by Dealer Social media posts by Salesperson Craigslist Ebay

© McGloin, Davenport, Severson and Snow, P.C. -

2011

Compliance with Auto Industry Division Regulations (continued)

What is required to be part of advertisement under Dealer regulations? Name of Dealer

Or word “dealer” Must not be misleading or inaccurate or

misrepresent the vehicle 16 additional AID regulations

Regulation § 12-6-118(3)(k) Federal Rules

Price and payment terms Lease

© McGloin, Davenport, Severson and Snow, P.C. -

2011

Social Media and Dealership Liability - Agency

Can Dealership be sued for Employee actions? Posting of inappropriate or offensive

content Employees’ postings may cause binding

obligations for Dealer Defamation, harassment, discrimination Interference with a business

relationship Trademark and Copyright infringement

© McGloin, Davenport, Severson and Snow, P.C. -

2011

Social Media and Dealership Liability - Unauthorized Use

Cannot use customer’s name, photo or likeness for commercial purposes w/o

consent

No statutory prohibitions in Colorado, but common law claims permitted

28 states prohibit unauthorized use by statute

© McGloin, Davenport, Severson and Snow, P.C. -

2011

Social Media and Dealership Liability - Unauthorized Use (continued)

Potential “common law” lawsuits in Colorado Prohibits use of name, image or likeness for

commercial gain Right to privacy

Appropriation of name or likeness Damages: Mental anguish/hurt feelings

Right of publicity Property interest in a persons “name, voice,

signature, photo, image, likeness, appearance, etc. Copyright, trademark and intellectual property

rights

© McGloin, Davenport, Severson and Snow, P.C. -

2011

Social Media and Dealership Liability - Unauthorized Use (continued)

Customer Consent and/or License Best Practice: Obtain customer consent Consideration or payment for a consent (probably) required. Consider oil changes, coupons, etc., as payment Underlying benefit to service department

SOCIAL MEDIA: Legal Issues http://www.cadaopenroad.org/enewsletter/2011/links/reg_legal_link_022211.html

© McGloin, Davenport, Severson and Snow, P.C. -

2011

Use of Social Media in Lawsuits

Social media postings treated similarly to e-mails or written letters

Discoverable and admissible

Examples of Social Media based lawsuits: Discrimination in hiring employees Using Social Media to discriminate or harass Unauthorized use of image/likeness Privacy invasion

Employees’ expectations of privacy Interference with a business relationship Sexual harassment

Back up electronic communications

© McGloin, Davenport, Severson and Snow, P.C. -

2011

Employee Issues

Employers may regulate use: No reasonable expectation of

privacy Postings on company assets,

computers/mobile phones? Where are the messages

stored? What network are the

messages traveling through? Are the messages being

generated on company time?

© McGloin, Davenport, Severson and Snow, P.C. -

2011

Employee Issues (continued)

Employers may examine employees’ on-line activity Does employer

have a duty?

Create employer policies governing use of social media

© McGloin, Davenport, Severson and Snow, P.C. -

2011

Employee Issues (continued)

Counsel employees on: What is appropriate How to use better judgment Provide Employer Policy

Alternatively, designate a gatekeeper to be responsible for all on-line posts

Discuss implications, such as employment termination, suspension, other discipline

© McGloin, Davenport, Severson and Snow, P.C. -

2011

Employer Policy on Use of Social Media

What is appropriate, good judgment, etc.Obtain authorization to use someone’s name, image or likeness Personal use by employees may effect dealership Maintain professional on-line identity May meet clients/potential clients through Social

Media

Keep confidential information confidentialComply with dealership policies, dealer regulations and employee handbook

© McGloin, Davenport, Severson and Snow, P.C. -

2011

Employer Policy on Use of Social Media (continued)

Do not violate “advertising” guidelinesBe accurate, honest, non-misleading, polite, professional, respectableIdentify yourself as an individual when giving opinions, specifically state that employee is not representing the dealershipDo not make any posts which could be considered discrimination, defamation or harassmentHonor all copyright, trademark and service mark requirementsContests rules and regulations

© McGloin, Davenport, Severson and Snow, P.C. -

2011

Hiring and Termination Practices

Employers may: Check employee profiles to

verify information supplied by an applicant or an employee

Check social media sites to view postings that may be:

Harassing If an employee who has

called in sick is really out for other reasons

© McGloin, Davenport, Severson and Snow, P.C. -

2011

Hiring and Termination Practices (continued)

Employers may not: use information found on social media to

discriminate against employees or candidates due to race, religion, sexual orientation or other protected classes

First Amendment Issues

© McGloin, Davenport, Severson and Snow, P.C. -

2011

Reacting to Customer Comments

Customers have the ability to post commentsCustomers are anonymous

Leads to inflammatory comments

DO NOT BITE! Polite and direct rebuttal of

customer complaints is more effective than rants, angry posts, etc.

Turn it around; take advantage of the opportunity to improve

Social Media Providers are not liable for content of posts

© McGloin, Davenport, Severson and Snow, P.C. -

2011

Contact Information

Michael J. DommermuthJ. Randolph EarnestMcGloin, Davenport, Severson and Snow, PC1600 Stout Street, Suite 1600 Denver, Colorado 80202Tel: (303) 863-9800Fax: (303) 571-1600E-Mail: MikeD@mdsslaw.comRandyE@mdsslaw.com