The document discusses the legal issues surrounding the use of social media by businesses and employees, providing examples of cases where businesses and employees have faced legal issues for their social media use, such as misleading conduct, defamation, and discrimination. It also recommends that businesses implement social media policies to regulate employee social media use and avoid potential legal liability.

1. Social
Media, Your
Business and
the Law

2. Presentation
Social Media as a
communication tool for
the business!
Social Media as a
communication tool
for staff!

3. What Constitutes Social Media
 Social Networking Sites
 Video and photo sharing
 Corporate and personal
blogs and blogs hosted by
media outlets
 Micro-blogging
 Wikis and online
collaborations
 Online forums, discussion
boards and groups

4. Some simple facts about social
media and the law
 Social media is not necessarily the
hotbed of dangers that some
commentators make it out to be.
 Social media is no different than any
other communication channel.
 Social media is simply another way to
get the message out there about the
business and the law applies just as it
would for anything else.

5. Some simple facts about social
media in the eyes of the law
 It‟s public – extremely public
 It‟s use is amplified (one to few, few to many, many to potentially
millions)
 It‟s a continuous live conversation driven by the user and their
contacts, friends and so on
 It‟s permanent – e.g. Twitter is now archived in the U.S. Library
of Congress
 It tends to lack much of the contextual information of traditional
media
 What businesses and employees say on social media can be relied
upon by consumers

6. Some not so simple facts for businesses
about social media in the eyes of the law
 Misleading and deceptive conduct provisions in section 18 of Schedule
2 of the Competition and Consumer Act 2010 (Cth) applies (Seafolly
Case).
 Racial Discrimination Act 1975 (Cth) applies (Eatock Case).
 Defamation laws will apply (Dow Jones Case).
 Advertising Standards Code applies to user-generated content on the
Facebook pages of advertisers (Diageo Case).
 Work Health and Safety Act 2011 (Eatock Case).
 Vicarious liability for actions of employees (Dow Jones Case).

7. Protecting the Club in its use of
Social Media

8. Protecting the Club in its use of
Social Media
 Risk Management Considerations
 Privacy issues
 Loss of and/or disclosure of confidential information
 Discrimination
 Defamation
 Monitoring and Review
 Brand, reputation and IP protection
 “Ownership” of social media accounts
 Database “theft”

9. Seafolly Case
 Seafolly Pty Ltd v Madden [2012] FCA 1346.
 The comments Ms Madden posted included:
 "Seriously, almost an entire line-line ripoff of my Shipwrecked collection."
 "I know, the buyer from 'sunburn' (who, as it turns out, works for Seafolly) Came to
my suite at RAFW and photographed every one of these styles."
 "Ripping off is always going to happen, but sending in a dummy 'buyer' to get photos
is super sneaky!"
 Seafolly contested the allegations, and commenced proceedings in the
Federal Court alleging, among other things, that Ms Madden had
engaged in misleading and deceptive conduct. The court found in
favour of Seafolly on this point and awarded the company $25,000 in
damages, plus costs.

10. Eatock Case
 Eatock v Bolt [2011] FCA 1103 (28 September 2011).
 Eatock brought proceedings on her own behalf and on behalf of people
like her who have fairer, rather than darker skin, and who are
recognised as Aboriginal.
 Eatock complained that two articles written by Bolt and published in
the Herald Sun and Weekly Times (an online site) and subsequent blogs
conveyed the message that fair-skinned Aboriginal people were not
genuinely Aboriginal and were pretending to be Aboriginal so they
could obtain benefits.
 Found: content offended, insulted, humiliated and intimidated fair
skinned Aboriginal people in breach of s18D of Racial Discrimination
Act.

11. Dow Jones Case
 Dow Jones & Co. Inc v Gutnick (2002) 210 CLR 575.
 Dow Jones was publisher of US based Wall Street Journal (weekly
finance newspaper published online).
 Article written entitled “Unholy Gains” in which several references were
made to Gutnick.
 Gutnick claimed that part of the article defamed him.
 However, Gutnick lived in Victoria, Australiua and the article was
published in US.
 High Court found Gutnick was able to sue in Australia because the
online edition was able to be read in Australia.

12. Diageo
 Diageo controlled the Smirnoff Facebook page.
 Complaint was made to the Alcohol Advertising Review Board that
comments about the product and photographs on the Smirnoff
Facebook page appeared to show underage drinkers - in breach of
Advertiser Code of Ethics.
 While the Board considered Diageo‟s Facebook site and content to
constitute advertising, Diageo was found not to have breached the Code
as its site did not include material contrary to prevailing community
standards.
 However, found that Advertising Standards Code applies to user-
generated content on the Facebook pages of advertisers.

13. VB Case
 In Advertising Standards Bureau 2012, Case Report 0271/12
Advertiser: Fosters Australia, Asia & Pacific (VB case), the
Alcohol Advertising Review Board considered questions posted of the
VB Facebook page by the advertiser and comments from members of
the community that included coarse language and sexual references.
 The Board determined that the comments posted were
obscene, discriminatory toward women, derogatory, insulting and
degrading to homosexual members of the community, and Fosters
Australia was held to have breached the Advertising Standards Code.
 The Board held that Facebook and Twitter pages fell within the
definition of advertising or marketing communication and, as such, the
Code applies to material or comments posted by users or friends, in
addition to content generated by the page creator.

14. Allergy Pathways Case
 In ACCC v Allergy (No.2) (2011) 192 FCR 34, Allergy Pathways
made representations that it could test for allergies (without skin prick
testing); cure or eliminate allergies; and treatment is safe and/or low
risk.
 Allergy had testimonials posted on its Facebook page by users of the
companies products.
 Because directors of Allergy knew the testimonials were untrue
(because they knew their product was untrue) the company was held
liable for misleading and deceptive conduct when it knew of the
publications and decided not to remove them.
 Allergy was found to be the publisher of testimonials on its Facebook
and Twitter pages from the time it became aware of their existence.

15. Regulating Club employees’ use
of Social Media

16. Why regulate staff use of Social
Media
 Online conversations between employees can expose the employer to
liability even if it occurs outside the place of work.
 If a comment has the potential to harm the interests of the business, the
adverse impact will likely be far greater if the comment is made online
rather than face to face.
 Even limiting privacy settings may not exclude co-workers and clients
of the employer.
 Employer can be held vicariously liable for the acts of employees on
social media.

17. Vicarious liability
 Vicarious liability for actions of employees:
 Breach of copyright, trademark or other intellectual property
rights, if person acting on behalf of an organisation “shares” a
digital file overt the internet or publishes an image without the
owner of that file or image‟s consent;
 Sexual harassment, vilification and victimisation if actions taken in
connection with employment;
 Bullying including humiliation, threats, undermining or victimising
fellow workers on social media;
 Defamation where person publishes defamatory content on a social
media site maintained by the employer organisation, employer
liable for publication;
 Misleading and deceptive comments posted on site.

18. Virgin Atlantic Case
 In 2008, 13 Virgin Atlantic staff on
Facebook:
 criticised the cleanliness of
Virgin Atlantic‟s fleet.
 criticised the cleanliness of its
passengers – one post described
passengers as “smelly and
annoying” - another post
described the planes as being
“full of cockroaches”.
 All 13 staff were dismissed from
employment for bringing the
company into disrepute.

19. How to regulate Employee use
of Social Media
 Foundation of employment relationship is the Contract of
Employment.
 Employee has an implied contractual obligation to obey his/her
employer‟s directions, provided the directions have sufficient
relationship with the Contract of Employment (see Adami v Maison De
Luxe (1924) 35 CLR 143).
 Implement a Workplace Social Media Policy.
 Ensure that the terms of the Contract of Employment includes the
Social Media Policy.

20. The Advantages of a Workplace
Social Media Policy
 Provide guidelines for using social media
– employer can define what is considered
appropriate.
 If employee breaches Workplace Social
Media Policy they are likely to be
breaching an express or implied term of
the Contract of Employment.
 If you don‟t have a policy in place you may
find it hard to discipline staff for what you
consider to be inappropriate use of social
media.

21. Monitoring is Crucial
 How do you know what is being said about
you, your business, your competitors or your
employee‟s online?
 Under the Workplace Surveillance Act 2005
(NSW) you must notify employees in the
appropriate form if you plan to monitor them.
 You cannot monitor employees when they are „not
at work‟.
 You cannot block internet access to particular
websites unless you are acting in accordance with
a policy already in place.

22. Guidelines
 Think about language and etiquette –
nothing beats good manners
 Understand that every post is public;
Social Media is not a relationship
between you and your computer!
 Consider information being posted; is
it confidential or private in any way?
 Think about consequences in terms of
being “quoted out of context”.
 Have systems in place for dealing with
negative events.

23. What’s Private & What’s Public?
 Anything posted on social media should be considered public – ie front
page of the newspaper.
 Know your privacy settings, especially on Facebook (although this may
be academic).
 Be careful of “linking” private social media accounts to company
accounts.
 Share freely that which is public (and appropriate).
 Think about location based social media networking (for example: do
you want your customers to know when you‟re overseas?)

24. Recent Unfair Dismissal Cases
linked to Social Media
 O’Keefe v Williams Muir’s Pty Ltd [2011] FWA 5311
 O‟Keefe dismissed for serious misconduct relating to comments on
Facebook page:
 „Damien O‟Keefe wonders how the f--k work can be so f--king useless and mess up
my pay again. C—ts are going down tomorrow.‟
 „F—king work still haven‟t managed to f—king pay me correctly. C—ts are going
down tomorrow‟
 Facebook page was set to maximum privacy setting but colleagues had
access to comments.
 FWA found doesn‟t matter if comments made at home or at work, if
they can still be read by work colleagues, enough to satisfy FWA that
summary dismissal was warranted.

25. Recent Unfair Dismissal Cases
linked to Social Media
 Fitzgerald v Smith [2010] FWA 7358
 Fitzgerald was an employed hairdresser.
 After receiving a warning for unrelated alleged misconduct Fitzgerald
posted a comment on her Facebook page that read:
 “Xmas „bonus‟ along side a job warning, followed by no holiday pay!!! Whoooooo!
The Hairdressing Industry rocks man!!! AWSOME!!!”
 FWA found that comments were a “foolish outburst” but were not
detrimental to the employer‟s business.
 Relevant that comments did not name employer and that information
was not readily available on the Facebook page.
 May have been different if Social Media Policy in place.

26. Recent Unfair Dismissal Cases
linked to Social Media
 Dover-Ray v Real Insurance Pty Ltd [2010] FWA 8544
 Employee made disparaging comments about her employer on her
MySpace page.
 Employer asked her to remove the post but employee refused.
 Employee dismissed for making disparaging comments about the
employer on her MySpace page (a lengthy blog titled „Corruption‟).
 MySpace friends included other employees of the company.
 FWA concluded that writing the material and failing to remove it when
asked constituted a valid reason for dismissal.

27. Implementing Effective Social
Media Policies
 A social media policy should address the following
elements:
 Content
o The policy identifies appropriate internet and email usage
and is explicit about what is and is not permitted.
o The policy explains how the club intends to monitor and
audit staff compliance with its policy.
o The policy explains what information about workplace e-
mail and web browsing is logged and who has rights of
access to the logged information within the club‟s
operations.

28. Implementing Effective Social
Media Policies cont.
 Content
o The policy sets out circumstances for disclosure of logged
information about workplace e-mail and web browsing.
o The policy explains the consequences of social media use.
o The policy identifies the legislation that justified the
regulation of social media use by employees (e.g. anti-
discrimination statutes, workplace health and safety
laws, Advertising Standards Code, Australian Consumer
Law).

29. Implementing Effective Social
Media Policies cont.
 Adoption
o Staff and management know about and understand the
policy.
o The club reviews the policy on a regular basis to ensure it
keeps up with technological developments and will re-issue
the policy whenever changes occur.
o The employer enforces the policy fairly, reasonably and
consistently.

30. Tony Johnston
Partner
Ground Floor, Suite 3, 131 Clarence Street
SYDNEY NSW 2000
T: 02 8243 1700
F: 02 9290 1777
E: tony.johnston@eclawyers.com.au
W: www.eclawyers.com.au