Magazine article Risk Management

Legal Liability for Published Content

Magazine article Risk Management

Legal Liability for Published Content

Article excerpt

Companies that publish content on the internet should view themselves as just that--publishers. Just as a newspaper is responsible for its reporters, employers may be liable for content published by their employees. They are subject to the same liability risks as newspapers, magazines and broadcasters while enjoying fewer privileges and immunities. The First Amendment protections for "newsworthy" speech, such as news and political opinion, are diminished for commercial speech, including advertising and marketing.

Under agency law, even unauthorized posts can be attributed to the employer through legal doctrines such as respondeat superior (Latin for "let the master answer"). Generally, courts and juries look to whether the employee was acting in the scope of his employment with actual or merely apparent authority. Yet these doctrines can also include unauthorized conduct if it benefits the employer. And liability can arise from posts by employees on social media sites, forums or blogs, particularly when they claim company affiliation or discuss company business.

Here are the areas where liability is most likely to arise.

Third Party Statements

Employees may put their companies at risk if they solicit third parties to comment on a company site. Although the federal Communications Decency Act provides internet service providers (ISP) with immunity for content posted to the ISP's site by third parties, this immunity is limited. While the company likely will qualify as an ISP for its own site, the immunity does not extend to content posted by the company and its employees. Immunity also does not extend to intellectual property violations, such as copyright and trademark infringement.

Recent cases also suggest that website operators may forfeit immunity if they (or their agents) solicit or induce objectionable content. For instance, an employee who solicits "horror stories" regarding experiences with a competitor should not expect immunity for defamatory comments.

Defamation and False Light

The most common publishing risk entails publishing false facts that injure the reputation of another person or a corporate entity. The various forms of trade libel, whether under common law or statute, apply to false statements disparaging another's goods and services.

Under either scenario, there may be a fine line between protected statements of opinion and an actionable statement of fact. Well-intentioned employees seeking to convey damaging news about a competitor or to promote the superiority of their employer's products and services may inadvertently cross that line. "Truth" is generally a defense to defamation, but even a technically true statement may give rise to "false light" liability if it is misleading. Unfair juxtapositions of photos and text or missing explanatory facts may allow information to be taken out of context.

False Advertising and Online Disclosures

The Federal Trade Communication Act and various state laws that prohibit false and deceptive advertising--including improper uses of celebrity and expert endorsements and customer testimonials--also apply to online advertising. These statutes, which often overlap with trade libel theories, typically include fee shifting to permit the prevailing party to recover attorney's fees.

In addition, the Federal Trade Commission (FTC) recently issued specific guidelines regarding advertising via online media. The guidelines require that bloggers and other online writers disclose any "material connections" between themselves and the companies whose products or services they discuss. Employees enjoy an obvious "material connection," but this guideline can include third parties who received monetary or product compensation. If a video game company provides a gaming blogger with a copy of a game to review, for example, the failure to disclose this fact in the review may subject the blogger and the company to fines. …

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