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Employee’s social media rampage imputed to employer

social media

As an employer, you may be wondering whether you can be held accountable for your employees’ personal social media activity. Unfortunately a recent Massachusetts case indicates that under certain circumstances, you can.

The employer in the case was an investment services company and its workers were registered broker-dealer agents. As a result, the company had to comply with certain industry-specific supervision regulations. This included a requirement that companies maintain reasonable policies and procedures to monitor employees’ use of social media.

The company did, in fact, have procedures in place that barred its agents from discussing company business and securities in general.

But without the employer’s knowledge, one of its employees posted 250 hours of YouTube videos detailing investment strategies, made hundreds of securities-related posts on Twitter and posted extensively about securities-related issues on other social media accounts. These included extensive discussion and promotion of GameStop, the video game retailer whose shares, as a so-called “meme stock” that went viral due to internet popularity (attributable at least in part to this employee’s social media activity), experienced a sudden, massive and brief price surge.

The employee’s activity garnered the attention of the Massachusetts Securities Division. Even though the employee did not disclose company information, mention the employer’s name or even post under his real name, the Division imputed his actions to the company because he worked there. As a result, the Division ordered that the company pay a $4 million fine, undergo annual reviews each of the next three years to ensure compliance with industry social media regulations and hire an independent consultant to conduct an extensive internal review and report.

Not every industry is subject to such extensive social media regulations, and there is a risk to being too heavy-handed with respect to employees’ off-hours use of the internet. You could run afoul of labor laws if you’re interfering with protected concerted activity, and you don’t want to invade your workers’ privacy. Because this is such a tricky area, it’s a good idea to have a local employment attorney review your policies to make sure they’re appropriate for your industry.