From the December 5-12, 2011 issue of National Underwriter Property & Casualty • Subscribe!

Managing Social-Media Risks— A Critical Task for 2012

LinkedIn, et al. can be a valuable asset in the hiring/firing process—but also add liability

Without question, social media has revolutionized not only the way we connect with friends and family but also how we conduct business, including the hiring, discipline and termination of any business’ most valuable asset—its employees.

This asset can quickly become a liability, however, if social-media risks are not effectively managed. Here are some points to help your clients lessen those risks.

The Hiring Process

Many hiring professionals and employers’ first stop during the hiring process is social-media outlets to screen applicants. They turn to LinkedIn or Facebook to learn more about an applicant’s education, their friends or even their social behavior.

Sometimes, a candidate is rejected based on content found on the applicant’s social-media pages, which could include inappropriate photos or comments, references to alcohol and substance abuse, discriminatory comments, slanderous statements and/or the sharing of confidential information regarding their previous employer, proof of poor communication skills and exaggeration of their qualifications.

While the above reasons are legitimate cause for concern, and employers advantageously have social media at their disposal to prevent negligent hiring, a business can be at risk for discrimination if accessing social-media sites that contain protected class information not privileged in the normal course of the hiring process.

To mitigate this risk, employers should use outside third parties in their hiring process, including background-verification companies and/or recruiters who document content acquired on social-media sites in the candidate-selection process.

Establishing a Social-Media Policy

Employers need to have a solid social-media policy in place. This policy should:

  • Outline what constitutes inappropriate use of social media, from personal use during work hours to the type of content posted, including defamatory language about the company.
  • Address the penalties for disclosure of trade secrets on public pages, in a language and context that can be understood clearly.
  • Address disciplinary action and termination procedures for violation of social-media use in its various forms.

Document, Document, Document

If an employer is considering disciplinary action, including termination based on content found on a social-media site or other inappropriate use of social media, it is imperative to adequately document the content that is the basis for the action.

    Employers, however, need to caution themselves on the content and extent of the policy itself.

One of the issues most commonly raised in claims alleges that an employer has overly broad policies restricting employee use of social media. The policy an employer puts in place must align with the National Labor Relations Act’s rendering of protected and violating behavior.

It would be in the interest of the employer to consult with an attorney who specializes in employment-practices liability when developing social-media guidelines.

Purchase Employment-Practices Liability Insurance

For a price comparatively nominal to the cost of litigation, employers can purchase an employment-practices liability insurance policy (EPLI). An EPLI policy provides protection for the employer from the economic and noneconomic losses resulting from employment-related claims, including but not limited to claims of wrongful termination, discrimination, harassment or retaliation.

  In addition to an employer’s risk-management portfolio for social media, an employer’s overall risk management should include an EPLI policy to protect them from the costly litigation associated with labor and employment.

  A small-business owner with a few employees can purchase an EPLI policy for around $1,000, while the cost of litigation could reach hundreds of thousands of dollars and financially devastate an organization.

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