When Social Media Is Bad for Business: Understanding the Legal Risks


Social media has arguably transformed the way many companies do business, particularly how they interact with the public. However, as the business advantages of this new technology continue to grow, so do the legal risks.

Many of these risks can be traced back to the novelty of the social media phenomenon. While social media issues have started to pop up in courtrooms across the country, there is often little established precedent for courts and businesses to consider. In addition, while some laws have been amended to apply to social media, other aspects of the new technology are largely unregulated. In many ways, social media is still akin to the “wild, wild West.”

The problem is particularly apparent in the field of employment law. Employers are increasingly relying on social media to screen candidates. However, many do not realize that this practice could expose them to liability if their hiring decisions are based on certain “protected” information (age, race, marital status, pregnancy status, etc.) gleaned from Facebook or Twitter. After the practice of asking applicants for their social media passwords caught the attention of lawmakers last month, efforts are now underway to ban the practice.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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