Bloomberg BNA recently released Corporate Practice Series Portfolio No. 91, Social Media Law, co-authored by David A. Bell, a partner at Haynes & Boone LLP.

Bell recently discussed several aspects of social media use and how to mitigate the legal risks it presents in, among other areas, employment, marketing and M&A due diligence. The following is a shortened version of Bell's interview, which is available in full to BBNA subscribers.

BBNA: Could you give us an overview of what government agencies have oversight of social media issues?

David Bell: Several government agencies are tasked with regulating content on social media. These agencies review, as well as issue opinions and render judgments on, companies' social media activity. Notable examples include:

• the National Labor Relations Board, which is responsible for preventing and remedying unfair labor practices by employers or unions and has opined on dozens of companies' social media policies;
• the Federal Trade Commission, which has released guides concerning endorsements and testimonials, enforces children's privacy rights and has provided mobile app guidance; and
• the Securities and Exchange Commission, which, among other things, investigates social media postings to determine whether public companies have violated selective disclosure rules.

BBNA: What are some things that companies need to be aware of when using social media for advertising and marketing campaigns?

Bell:

• Clearly and conspicuously disclose when a social media post was essentially a paid ad. If your campaign includes a writer who receives compensation or a commission, has been given a free product to review or obtains free services in exchange for the promotion, the blogger must disclose that fact. FTC guidelines released a few months ago explained that disclosures made solely at the bottom of posts, in small print, in "legal guidelines," or far away from the claim would not be sufficient. The disclosures must be at least the same size as and proximately located to the advertising claim, among several other requirements outlined by the FTC. For tweets, place a hashtag (like #ad) at the beginning of the tweet. Further, if your campaign will enlist employees, make clear that they are employees.  
• Copyright laws apply! Do not assume that copyright laws are somehow more lax on social media. As a general matter, others' photos, videos, songs and other works should not be placed in social media campaigns without first obtaining permission.
• Not everyone wants to be famous-at least, through your ad or without compensation. In other words, right of publicity laws should be respected. Obtain permission, preferably in writing such as in a consent agreement, from any employee or non-employee who is photographed or discussed, especially prominently or recognizably, in your company's campaign ads or posts.

BBNA: Several recent lawsuits have been filed by companies against former employees regarding the "ownership" of a social media account and its followers. Could you talk about where the courts have come down on this issue?

Bell: Few cases have gone to trial, but the courts thus far have indicated that either the company or the former employee may "own" the account and its followers. We can glean a few takeaways from the current case law:

• The cases thus far lean in favor of the companies. Most cases settle or are summarily dismissed, but the early dismissals and some dicta tend to be in the companies' favor. Most pointedly, the former employees have a difficult time proving that they own trade secrets in the accounts' content, and that they are not taking company proprietary information with them when they leave.
• The company may own user and account names. The user names and account names, if they correlate to company brands (and they almost always do) almost always would be held to be owned by the company. Thus, a former employee might be allowed to keep an account but at least would likely be expected to remove references to the company from the account's user and account names.
• Contracts govern. If a contract already is in place between the employer and former employee that addresses the issues, that often will govern who will be deemed the account owner. We typically recommend addressing such social media issues in any employment and consulting agreement.

Copyright 2013, The Bureau of National Affairs, Inc.