Technology: The ugly side of social media

A recent case concerning the famous Coyote Ugly Saloon highlights the need for policy implementation

Social media has become a tangled web of personal and business communications. Social media sites such as Facebook and Twitter originally contained personal matters, but now they have become a must-use vehicle for company public relations. Sixty-six percent of Fortune 500 companies have Facebook pages, and more than 70 percent have a Twitter account. Woe to the company that lacks a presence on Facebook, Twitter, LinkedIn or the like, lest the masses be left alone to shape the company’s message or public image.

Companies also actively encourage their employees to engage in social media, treating that engagement as a pro-business opportunity. The logic is simple: The more positive interactions people have with a company’s name in social media, the more likely they are to have a positive view of that company in the business world. Through employees, businesses can communicate directly with customers in a way never before possible, introducing advertising messages, new products and services, and other critical information in a highly effective and personal way.

With the increased exposure brought by employee involvement, however, comes an additional liability risk. Just as with offline conduct, employee postings on social media can implicate potential claims of defamation, disparagement, violation of privacy rights or rights of publicity, misrepresentation, infringement of intellectual property rights, false advertising or unfair competition, amongst others. If the employee posting was done “within the course of employment,” a company can be held legally responsible for the employee’s actions.

Fighting words

A recent case involving the Coyote Ugly Saloon is illustrative. A former employee of Coyote Ugly—the bar made famous in the 2000 movie of the same name—filed a class action suit against the bar for alleged violations of the Fair Labor Standards Act (FLSA). While the case was pending, Coyote Ugly’s founder, president and director, Liliana Lovell, posted comments on her blog, “Lil Spill,” about the lawsuit, stating:

“By the way Lil, you should be getting served with a lawsuit. No worries just sign for it.” This particular case will end up pissing me off cause it is coming from someone we terminated for theft. I have to believe in my heart that somewhere down the road, bad people end up facing bad circumstances!

I have been reading the basics of Buddhism and am going to a class on Monday. The Buddhist way would be to find beauty in the situation and release anger knowing that peace will come. Obviously, I am still a very new Buddhist cause my thoughts are “f**k that b***h”. Let me do my breathing exercises and see if any of my thoughts change. Lol

Nearly a year later, Coyote Ugly’s director of operations, Daniel Huckaby, posted a comment on his Facebook page about the lawsuit, stating “Dear God, please don’t let me kill the girl that is suing me…….that is all…..”

The plaintiffs moved to add retaliation claims to the lawsuit based on these two comments (and some other actions). Plaintiffs asserted that Lovell’s comments were inaccurate, offensive and intended to humiliate and embarrass one employee, and that Huckaby’s Facebook comment acted as a constructive termination on another. 

Coyote Ugly moved for summary judgment on both claims, asserting in each case that the lack of an identifying name in the posts made it impossible for the plaintiffs to demonstrate an “adverse action” under the FLSA. On Feb. 6, the court denied Coyote Ugly’s motion, finding that the posted content created at least a genuine issue of fact of whether there was adverse action against the two plaintiffs. The court held a bench trial in April with findings of fact and conclusions of law still pending.

Creating guidelines

As demonstrated by the Coyote Ugly case, an employer can be subjected to direct liability   based on emotional, offhand and even nonspecific postings—a situation that can occur all too frequently on social media sites where access is readily and instantaneously available.

Although there is potential liability associated with social media usage, the benefits make it imperative to find a way to allow employee engagement with minimum risk. The best method of balancing these two interests is through a clear, written and detailed social media policy. 

A social media policy should outline the company’s expectations for responsible social media usage and educate employees as to the boundaries and liabilities associated with that use. The policy should be combined with a periodic audit to confirm compliance as well as to identify any other possible issues that may need to be addressed in the policy as well. By outlining the policy details and ensuring compliance, an employer can identify issues early and avoid potential pitfalls from unacceptable or unauthorized social media use.

Contributing Author

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Jake Koering

Jake Koering is a partner in the Litigation and Intellectual Property practice groups at Freeborn & Peters. A long-time technology addict, both professionally and personally,...

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