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The Risks of Social Media: How Insurance Companies Are Benefitting Despite the Potential Perils

It’s been quite awhile since we last added to our Risks of Social Media series. There has of course been many developments and discussions of the risks involved over the past year, but more so than the downsides, companies should now be focusing on the upside. Twitter, Facebook, YouTube and now, perhaps, Google+ all present vast marketing, reputation, customer service and sales benefits so it would be foolish to continue ignoring the social media revolution just due to the downsides.

For a recap of the perils, however, let’s look at the below slide from the Insurance Industry Charitable Foundation’s presentation “Social Media 2.0 for Insurance Professionals.”

These issues are real concerns. They must be dealt with. And anyone in your company who is tasked with managing any aspect of the firm’s social media platform must undergo training that highlights the risks just as much as the opportunities.

But just look at how even these — theoretically — risk-averse companies are leveraging social media for their own gains. Insurers are generally not going to jump into something if the threat outweighs the upside. So if they’re doing it, chances are you should be, too. (all slides courtesy of Dewey & LeBoeuf’s presentation for IICF)

State Farm

 

Farmers

 

Progressive

 

Allstate

 

The Risks of Social Media: Planning to Fire Someone for a Facebook Post? You Better Think Twice

The more Facebook has risen in popularity — culminating in it reaching 500 million followers last June and its Hollywood creation tale The Social Network becoming the number-one movie in America in October — the more legal issues have surfaced. The most high-profile have been the near-constant privacy complaints against the company, which has a history of introducing new, unpopular features that people must opt-out of if they don’t want to submit to rather than opt-in to access.

For outside companies, however, perhaps no legal issue has been more contentious than the issue of firing an employee for something they posted on Facebook. It might be due to a salacious photo or an off-color remark about the business — and it might even have been done on the employee’s personal time — but time and time again, companies have fired workers for “inappropriate” behavior online.

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Well, based on a National Labor Relations Board (NLRB) ruling last week, we might be seeing a lot fewer of these incidents in the future.

In what labor officials and lawyers view as a ground-breaking case involving workers and social media, the National Labor Relations Board has accused a company of illegally firing an employee after she criticized her supervisor on her Facebook page.

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This is the first case in which the labor board has stepped in to argue that workers’ criticisms of their bosses or companies on a social networking site are generally a protected activity and that employers would be violating the law by punishing workers for such statements.

In what labor officials and lawyers view as a ground-breaking case involving workers and social media, the National Labor Relations Board has accused a company of illegally firing an employee after she criticized her supervisor on her Facebook page.

This is the first case in which the labor board has stepped in to argue that workers’ criticisms of their bosses or companies on a social networking site are generally a protected activity and that employers would be violating the law by punishing workers for such statements.

This specific case deals with a Connecticut ambulance company that fired an EMT, who belonged to a union, for criticizing a supervisor. The company termed the violation as “negative personal attacks against a co-worker posted publicly on Facebook” — something that went well beyond the company’s ban on depicting the company “in any way” on social networks.

Ultimately, however, the legal issue comes down to whether or not what the EMT posted was a protected worker right. Given the fact that a union is involved, those rights are already more clearly defined than they might be otherwise.

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And in the opinion of the NLRB, this was a clearly protected right.

Lafe Solomon, the board’s acting general counsel, said, “This is a fairly straightforward case under the National Labor Relations Act — whether it takes place on Facebook or at the water cooler, it was employees talking jointly about working conditions, in this case about their supervisor, and they have a right to do that.”

That act gives workers a federally protected right to form unions, and it prohibits employers from punishing workers — whether union or nonunion — for discussing working conditions or unionization

The ambulance company, naturally, disagrees with this assessment.

Regardless of the details of this case, however, there are obviously still many things that an employee could do on Facebook that would merit termination.

(Off the top of my head, some behaviors would likely include libel, harassment and violent threats, among others). And those without union protection are likely going to have a harder time at receiving re-instatement or fair compensation for unwarranted termination.

But this case, which will go in front of a judge on January 25, will help demarcate the standards that companies must adhere to in cases where the egregiousness of the comments is more murky than blatant libel or harassment. And the likely outcome is that many companies will have to re-evaluate their social media policies to determine if their bans on discussing the company in any way on social networks are overly broad.

For a look back at some of the most high-profile firings over Facebook, check out The Huffington Post’s “Fired Over Facebook: 13 Posts That Got People CANNED.”

The Risks of Social Media: Unfair Trials by Jury

Being fresh off an 8-day stint as a juror in a civil case, I found the article released today on Law.com very interesting. It focuses on the the right to a fair trial in the age of Facebook, Twitter and the internet in general. As we see in the instances below, in the age of instant information sharing, cases large and small are being disrupted and the somewhat-antiquated court system is trying to figure out how to address the problem of socially networked jurors.

  • Last month, one Michigan juror was disciplined for posting a comment about the case. Before the case was over, this juror posted on Facebook how it was “gonna be fun to tell the defendant they’re GUILTY.” Alert defense counsel saw the posting, and the trial judge dismissed the juror, fined her $250 and ordered her to write a five-page essay about the constitutional right to a fair trial.
  • During a February 2010 criminal trial, a New York juror sent a key witness a Facebook friend request. The judge found that the juror’s communication was “unquestionably a serious breach of her obligations as a juror and a clear violation of the court’s instructions.”
  • In March 2009, after eight weeks of trial in a drug case, a Florida juror admitted to the judge that he had conducted Internet research. When the judge questioned other jurors, he found that eight others had been doing the same thing. The judge declared a mistrial.
  • In February 2009, an Arkansas juror used his mobile device to post eight messages on Twitter during court proceedings. Among the messages: “I just gave away TWELVE MILLION DOLLARS of somebody else’s money.” The judge denied defense counsel’s motion for a new trial.
  • In 2008, a juror posted online a photograph he took of the murder weapon, a 15-inch, double-edged, saw-tooth knife. The judge held the juror in contempt of court, but denied motion for mistrial.
  • In 2006, the New Hampshire Supreme Court rejected a motion to overturn a murder conviction based on pre-trial comments a juror made on his blog. The juror’s posts included: “now I get to listen to the local riff-raff try and convince me of their innocence.”

If your company ever finds itself involved in a trial by jury, it may not be a completely fair one. Law.com suggests that lawyers should ask jurors during jury selection about the frequency of their Facebook and Twitter use, ask the judge to remind the jurors that they may come forward to report a fellow juror’s misconduct, monitor juror social media activity during trial and remind jurors before and after every jury break about the court’s ban on communicating with others about the case during trial.

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The Risks of Social Media — Now Available in Risk Management Magazine

Our campaign to provide in-depth coverage of the risks of social media started almost exactly one year ago.

I wrote a long, sweeping cover story on the issue, trying to highlight as many of the perils as possible. And while that provided a pretty good introduction to the topic for an audience that is, let’s just be nice and say, a little less familiar with social media than your average teenager, it was somewhat of a shallow exploration of a very serious threat.

Thus, we have used this here blog to continue the coverage ever since with our Risks of Social Media post series. This has allowed us to take different aspects of social media and break it down clearly with some real-world examples from the news.

Those more devoted readers among you, however, may have noticed that there has not been a lot of new posts in the series of late. Our apologies. But the good news is that this slow down has run parallel with an effort to cover the topic again, in a much more in-depth way, in our magazine, Risk Management.

So here, I present to you, our October cover story, “More Media, More Opportunity, More Risk”

It is a six-part examination of the legal liability, reputation damage, employee monitoring/pre-employment screening fallout and other risks associated with social media. You can also read about how IBM excels at handling social mediathe top 5 ways that insurance companies can use social media and 15 tips to help anyone manage social media risks.

I’m clearly biased, but I thought the whole thing turned out rather good — almost as good as the issue cover below that our designer Karen Arbasetti crafted. (If you liked this, feel free to subscribe to the print edition.)

Please let us know what you think in the comments below. And stay tuned to the blog for even more coverage in the future.

Lastly, in other social media news, you can follow me on Twitter“like” us on Facebook and join our LinkedIn group.

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