DECEMBER 14, 2006
Viewpoint
By Jacqueline Klosek
Corporate Blogs: Handle with Care
A Weblog can be a powerful marketing tool, but it can also expose a business to a legal minefield. Any company considering one should proceed with caution
Editor's note: This is the first of two perspectives to be published by BusinessWeek.com on the risks and rewards of corporate blogging
Blogging has quickly emerged as a powerful tool of the modern enterprise. Through blogs, companies can market products and services, and make important strides toward building goodwill and brand loyalty. Companies can also use blogs as an effective means of communication by putting a human face on the corporation, countering negative publicity, and facilitating communications with current and potential customers. Seeing the value in blogging, a growing number of companies, including Sun Microsystems (SUNW) and Google (GOOG), have established official corporate blogs and/or have implemented formalized policies to encourage employees to set up personal blogs that can be used, in part, to promote the company.
While corporate-sanctioned blogging can benefit companies, it also can result in legal liability. Careless statements posted on a company-sanctioned blog can come back to haunt the company through litigation and other avenues.
The legal issues raised by blogs can be grouped into several categories. First, there are potential intellectual-property issues to consider. New blogs tend to build on the work of existing blogs or other content through linking and copying. This can create legal concerns regarding copyright infringement if not conducted within the confines of the law. Inadvertent disclosure of company information in employee blogs can reveal trade secrets and jeopardize the protected status of that information. The disclosure of a third party's trade secrets also can expose a blogger to liability for misappropriation.
Range of Liability Issues Sponsorship of blogs can also expose a company to defamation claims. U.S. law provides Web site operators with a certain level of immunity for content they publish; however, companies and their employees may be held liable if they are the authors, rather than the publishers, of defamatory statements on blogs. Moreover, false or misleading statements made on a corporate blog about the goods or services of a competitor may be grounds for trade libel action.
Companies that collect personal information from a blog's visitors or posters need to contend with the rapidly evolving legal and regulatory framework regarding privacy and data protection. Such companies may have liability for failure to comply with applicable state, federal, and foreign statutes and regulations. A blogger who discloses personal information about co-workers on a company blog, or on his own blog during company time, may also open the organization and himself to common-law tort actions for invasion of privacy.
Many Implications Blogging also can lead to potential securities concerns. Specifically, blogs can result in securities-fraud claims. Public companies must thus take special care to caution their employees against disclosing any nonpublic financial information in blogs.
Personal (as opposed to company-sanctioned) blogging by employees, whether from home or the office, creates some thorny employment-law issues. For blogs that are company-sponsored or originate in the workplace, employers might be held vicariously liable on a theory that they failed to exercise control or implicitly endorsed the objectionable content by allowing the blogging.
Finally, there are litigation issues to consider. Prior to developing a corporate blog or permitting employees to blog about the company in their personal blogs, companies should carefully consider the implications for discovery. In the event that litigation does arise in connection with blogs, problems can be compounded if a company has not maintained adequate archives of the blog information.
Policy Prescriptions Given the potential risks and liabilities of blogging, companies should develop and implement policies establishing the terms and conditions under which employees will be permitted to blog. While the specific contents of a blogging policy will have to be tailored to the organization's particular goals, culture, and existing policies, there are certain common elements that all organizations should consider, including the following concepts in all blogging policies:
• A prohibition on the disclosure of confidential information of the employer or other third parties, including suppliers, clients, and competitors, in blogs.
• A reminder that blogging in the corporate world is not a place for venting, emotional outbursts, derogatory statements, or personal attacks.
• A direction to always be factual and truthful, even when debating with others about controversial issues, and to correct one's own mistakes, but refrain from altering previous posts without indicating that revisions have been made.
• A reminder that postings made to blogs will remain public for a very long time and, as such, it is best to think carefully before blogging.
• A mandate to comply with all applicable laws, including intellectual-property laws and all company policies.
Blog: Benefit or Threat? Other steps companies should take include providing employees with training on the blogging policy, and appointing a knowledgeable representative who will be adequately prepared to respond to employees' blogging questions.
In addition, a company considering setting up a corporate blog should inform employees of the consequences of violating blogging policies and follow up by actually enforcing the policies. Disciplinary actions for policy breaches should be reviewed with labor and employment counsel because various factors, including laws, contractual obligations, policies, and past practices, may be involved in determining whether such actions are lawful and appropriate.
Finally, the company ought to develop and implement a system for monitoring the company's blogs for content that violates terms of use, employee policies, or applicable laws. And it should ensure that any personal information gathered via company blogs is handled in compliance with applicable privacy laws and company privacy policies.
Blogging is already very widespread and its popularity is only likely to continue to grow. The determination of whether blogging will serve as a powerful tool for a given corporation or a legal minefield that will expose the company to potential liability may very well hinge on the content and enforcement of the organization's blogging policy.
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