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On October 30, 2015, Facebook, Inc. posted an important win in the Ninth Circuit Court of Appeals. In a non-precedential decision, the court upheld the federal district court’s dismissal of a complaint filed by a proposed class of minor Facebook users. The plaintiffs alleged that Facebook’s terms of use—specifically, a provision granting Facebook the right to use the plaintiffs’ names and likenesses—as applied to the proposed class, was void under California law. By ruling for Facebook, the Ninth Circuit’s stance in this case reminds us that courts will treat online terms and conditions as binding agreements between website owners and its users, and resolve disputes falling within such terms’ governance using traditional contract law principles.
Continue Reading Facebook Posts Important Advertising Law Win

With the first quarter of 2015 behind us, many companies are already deeply engaged in social media campaigns.  Many of these campaigns include the engagement of professional bloggers or other persons with social media influence to promote corporate brands through social media.  These individuals are typically classified as independent contractors, but are they really employees? This article describes the risks and rewards of classifying bloggers (and any other workers) as independent contractors instead of employees, and ways to manage that risk.

Background:  What Is an Independent Contractor?

Broadly speaking, a worker may be classified as either an “employee” (an individual to whom statutory wage payment and other legal protections apply) or an independent contractor (to whom such protections generally do not apply).  Although the vast majority of the U.S. workforce falls into the former category, independent contractors serve an important function in the economy and offer businesses many upsides over employees.  To take advantage of these benefits without risking the downsides, including “misclassification” litigation and other pitfalls, it is important for companies to understand the differences between employees and independent contractors from a legal standpoint.

Typically, a company should engage independent contractors for a discrete period of time to perform a task or series of tasks outside the scope of expertise of the regular, employee-workforce.  Unlike employees, contractors should not complete employment applications or W-4 forms, and they should not receive the company’s employee handbook.  In addition, contractors should not be shackled by the same restraints that encumber employees:  companies should ensure that their independent contractors remain free from direct supervision and control, may negotiate their own rates, retain latitude to perform their assigned task(s) in any manner and on any schedule they choose (so long as their work product is delivered by company-required deadlines), and are permitted to perform work for multiple businesses at any given time.  Where applicable, independent contractors also should provide their own tools, transportation, and the like.

Despite these general principles, determining whether a worker is properly classified as a contractor warrants a forum- and fact-specific analysis, as is more fully discussed below.Continue Reading Is Your Social Media Influencer or Blogger an Employee or an Independent Contractor? What Companies Need To Know Before They Engage Bloggers and Other Independent Contractors

Sensitive to the expanding diversity of the online community, the world’s largest social network has taken a step to curb highly contentious postings.

On March 16, Facebook revamped its community guidelines, detailing what is and is not acceptable behavior on the site. With social media playing an ever-increasing role in the news and current events,…

A recent district court case reminds companies and brand owners to establish clear guidelines or contractual rights with respect to brand-related social media pages’ administration and ownership.

Plaintiff Stacey Mattocks independently ran an un-official Facebook fan page which focused on the TV show the “Game”. After Black Entertainment Television network (BET) acquired rights to the TV show, it hired Mattocks to promote and grow the brand on the page and provided exclusive content and IP to Mattocks. During Mattocks’ employment, the number of page “likes” grew from 2 million to 6 million. Mattocks had granted BET full access to the page to update content but later, during a dispute involving Mattocks’ terms of employment, Mattocks demoted BET’s ability to access the page without her approval and claimed ownership of the page. BET approached the social media platform to regain control and Mattocks filed suit for various claims against BET (such as breach of contract and tortious interference with contract).

While social media platforms offer certain protections to companies and some include official or verification procedures, this kind of litigation and expense could have been avoided with more careful planning with respect to allocation of rights and ownership up front.
Continue Reading Brand Owners: Do You Know Your Social Media Ownership Rights?

A recent Facebook Platform Policy change may affect the way many promotions are run on Facebook. The change, effective November 5, 2014, prohibits Facebook Page owners from requiring a user to “like” their Page in order to access content, such as entry into a contest or sweepstakes, via a Facebook application (“App”). Advertisers often use this technique, known as “like-gating,” as a way to increase the amount of likes their Pages receive.

Facebook believes that a prohibition on like-gating will benefit both advertisers and consumers. In announcing the change, Facebook stated in a blog post: “[T]o ensure quality connections and help businesses reach the people who matter to them, we want people to like Pages because they want to connect and hear from the business, not because of artificial incentives.”

A like can be valuable to an advertiser, regardless of whether it is generated organically or artificially. When a user likes a Facebook Page, the like may appear on the user’s Timeline, stories from the Page may show up on the user’s news feeds, and users may also appear in advertisements for that Page.
Continue Reading But I Thought They Really Liked Me! Facebook’s Prohibition on Like-Gating Apps

Last month, Snapchat reached a settlement with the Maryland Attorney General over alleged deceptive trade practices regarding Snapchat’s marketing claims that user “snaps” disappear forever. In addition, the Attorney General alleged that Snapchat had violated the Children’s Online Privacy Protection Act (COPPA). This settlement follows a similar settlement between Snapchat and the Federal Trade Commission, which we reported on previously.

After announcing the settlement, Attorney General Douglas F. Gansler said that “despite Snapchat’s marketing claims to the contrary, no company can fully prevent content you send to someone else from being copied, shared or posted online[.]” Attorney General Gansler went on to state that companies operating online or through mobile devices have a responsibility to safeguard user privacy and to be transparent about the information they collect. According to Attorney General Gansler, Snapchat misrepresented to consumers that pictures and video messages sent using the Snapchat mobile application are only viewable temporarily, when in fact they can be captured by the recipient for future viewing or circulation. As a result of these representations, some Snapchat mobile application users may have sent pictures or video messages they would not have sent were these risks adequately disclosed. The Attorney General further alleged that Snapchat secretly collected information from users’ contact lists without their consent, and that Snapchat failed to comply with COPPA by knowingly collecting the personal information of children under the age of 13 without verifiable parental consent.
Continue Reading Snapchat Settlement with MD AG Marks Latest State-Level Privacy Enforcement Action

While social media has matured over the past decade as a marketing platform, it is still very much a legal work in progress. Join Reed Smith partner and ANA General Counsel, Douglas J. Wood, on Tuesday, July 29 at 1:00 p.m. EDT for a complimentary webinar entitled Social Media’s Murky Legal Waters to hear what legal risks lie ahead for marketers operating in the social media space, and how they can work to build powerful creative while keeping those risks within reason.
Continue Reading ANA Webinar – Managing the Risk of Social Media

The FDA issued two draft guidance documents on social media last week. The first guidance pertains to product claims and risk information on platforms such as Twitter and Google’s sponsored links, while the second guidance covers correcting misinformation that originates from independent third parties on the Internet and social media sites. The FDA has opened up a comment period and will be accepting comments until September 16, 2014.
Continue Reading FDA Writes Prescription for Social Media for Drug and Device Companies

On May 21, 2014, Oklahoma enacted H.B. 2372, following the trend outlined in our earlier article on the growing number of states prohibiting employers from requesting employee or applicant social media account passwords. H.B. 2372 prohibits employers from requesting or requiring the user name and password of employees’ or applicants’ personal social media accounts or demanding employees or applicants to access the accounts in front of the employer. The law also prohibits employers from firing, disciplining, or denying employment to employees or applicants who refuse to provide the requested information.
Continue Reading Oklahoma Joins the Rapidly Growing Number of States with Social Media Password Laws