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Employee’s social media rampage imputed to employer

As an employer, you may be wondering whether you can be held accountable for your employees’ personal social media activity. Based on a recent Massachusetts court decision, under certain circumstances, you can.

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

The company in the case had procedures in place that barred its agents from discussing company business and securities in general. However, 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.

The posts included extensive discussion and promotion of GameStop, the video game retailer whose shares had a sudden, massive and brief price surge, 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.

The employee’s activity garnered the attention of the Massachusetts Securities Division. Even though the employee did not disclose company information, didn’t mention the employer’s name and didn’t post under his own 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 in 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 if you try to be too controlling of employees’ off-hours use of the internet. You could run afoul of labor laws if you’re interfering with protected concerted activity.

It’s also important to ensure that you don’t invade your workers’ privacy.

It’s beneficial to review your company policies with an attorney to ensure they meet the standards in your industry.