IT, Social Media, and the Potential Legal Risks

The King III report of 2009 was considered a milestone in the evolution of corporate governance in South Africa as it recognized that information technology (IT) had created a fundamental shift in the way we conducted business. IT has become an essential strategic asset which can be leveraged to create opportunities and to gain competitive advantage.

However, as well as adding great benefit to the company, IT also presents organizations with significant risks. For example, the utilization of social media creates many IT legal risks, many of which originate from the social medium itself, or from the fact that in the last decade, huge advances in communication technology has rapidly narrowed the gap between our private and professional lives.

King III states that IT legal risks may arise in consequence of the possession, ownership or operational use of technology that might result in the company becoming a party to legal proceedings.

Some social media risks include the following:

1)    Confidentiality Breach

One of the biggest social media risks is the disclosure of company proprietary information, trade secrets or other confidential information.  Even though the Common Law does incorporate an implied term of confidentiality into every contract of employment, it is always prudent for employers to include confidentiality clauses in all employment contracts to prevent and deal with potential social media risks.

2)    Damage to the Employer’s Reputation

If an employee posts an improper or inappropriate tweet on Twitter or status update on Facebook, disciplinary action may be taken against the said employee if it has been shown that the tweet/update has had a negative impact on the employer. This may be done irrespective of the fact that it may have been posted using the employee’s personal equipment, not the employer’s, and at home and not at their place of work.

How can an employer reduce the risks, or diminish potential harm, to him or his business? Firstly, employers should educate employees and make them aware of the potential risks involved in using social media forums, like Facebook, Twitter, and others, and if they are using it on behalf of their employer, they need to be told what is not acceptable usage. Secondly, employers could draft a clear social media policy (or at least have appropriate clauses included in employment contracts) detailing and defining what acceptable usage of these mediums would entail.