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Lame, but smart

March 29, 2006

In posting my corporate blogging rules, I suggested that companies get some legal advice before setting employees loose in the blogosphere. As the comments to the post show, that idea rubbed some people the wrong way. I guess that, in the blogging world, it's what passes for politically incorrect. For instance, Shel Israel, the coauthor with Robert Scoble of the blogging book Naked Conversations, writes, "For [the] record, your advice on calling in the lawyers is lame and a sure-fire to make the blogs as lame as your idea."

That seems to me a dangerous view - an example of a desire for ideological purity getting in the way of good business sense. Last year, the San Francisco law firm Howard Rice provided a useful overview of the legal risks inherent in employee blogging:

While corporate blogs offer novel opportunities, they also present significant legal risks. Companies that anticipate these issues and plan accordingly can reap the benefits of corporate blogging while reducing the risk of litigation. Among the legal issues raised by corporate blogging are:

Defamation and Privacy Torts. Companies may be held liable if their employees post content to the corporate blog that defames or invades the privacy of third parties.

Intellectual Property Infringement. Posts that include a third party’s intellectual property, such as copyrighted material or trademarks, may expose the company to liability for infringement.

Trade Libel. False or misleading statements made on a corporate blog about the goods or services of a competitor that cause or are likely to cause the competitor harm may be grounds for a trade libel action.

Trade Secrets. Inadvertent disclosure of company trade secrets on a company blog can destroy the “secret” status of such information, rendering it ineligible for trade secret protection, and disclosure of a third party’s trade secrets could expose the company to liability for trade secret misappropriation.

Securities Fraud. Material misstatements made on a company blog could expose a publicly traded company to liability for securities fraud under Rule 10b-5.

Gun-Jumping. While a company is in registration, statements made on a company blog “hyping” the company could be deemed a prohibited offer of the company’s securities, in violation of federal securities laws.

Selective Disclosure. Disclosure of material nonpublic information on a publicly traded company’s blog could be deemed a prohibited selective disclosure under federal securities laws.

Forward-Looking Statements. Failure to include appropriate cautionary language accompanying a forward-looking statement on a reporting company’s blog could cause the statement to fall outside the statutory safe harbor for such statements.

Employment Issues. Companies that terminate employees for posting inappropriate content to corporate blogs may be sued for wrongful termination, with plaintiffs claiming that the employer authorized the posting is discriminating against them for exercising their right to organize, or is violating their free speech rights. (Similar issues arise when an employee is terminated based on the content of the employee’s personal blog, or the content of instant messages or email sent by the employee.)

User Privacy. Companies that collect personal information from individuals who visit or post comments to the blog may be required to comply with state, federal and foreign privacy regulations.

Discovery. Companies can be sanctioned in the course of discovery for failure to produce archived blog content.

Now, granted, it's in a law firm's interest to make companies nervous, and that's what this list is trying to do. So take it with a grain of salt. But it seems to provide a fair overview of the various ways that corporate bloggers can get their companies into hot water - even without meaning to. Corporate blogs are corporate speech; there's no way around that. You certainly don't want lawyers calling the shots, but you do want to make sure you're informed about possible risks and can establish reasonable guidelines. That's just common sense.

Is it a shame we live in such a litigious society? Sure it is. Is it also the reality of the situation? Yes. To be perceived as "lame" is not the worst fate that can befall a company.

Comments

shame on us bloggers - we have not found ways to make money from blogging whereas lawyers are, as have conference organizers like this seminar coming up on Blog Law and Blogging for Lawyers

http://lawseminars.com/section_details/06BLOGCA.htm

Posted by: vinnie mirchandani at March 29, 2006 03:17 AM

Doesn't seem to bother the x'000 public bloggers at MSFT/SUN/IBM - most are at pains to point out the views expressed are not necessarily those of their employers. Any evidence of companies being sued as a direct result of employee blogging? Not seen it (yet).

Posted by: Dennis Howlett at March 29, 2006 05:21 AM

"Any evidence of companies being sued as a direct result of employee blogging? Not seen it (yet)."

Neither have I. Let's hope that continues. (I wouldn't be too optimistic, though.)

If you're interested in this subject, by the way, here's another article that peovides some useful information on intellectual-property and other legal issues with blogs.

Posted by: Nick at March 29, 2006 06:26 AM

Anyone that doesn't think there could be legal ramifications for items posted on a corporate blog is not looking at reality in my opinion. Say a company blogger is big on a new product that is coming out and is hyping it in the blog, even to the point of either saying or implying the stock price could shoot up through the roof. Yup, good time for the lawyers to give that a once over before posting it.

Posted by: Wayne at March 29, 2006 08:56 AM

No risk - No fun.

How "lame" is lame enough? How would Cardinal Richelieu have handled bloggers centuries ago?

Posted by: Jürgen Ahting at March 29, 2006 10:30 AM

Nick, Surely you're aware that not only are bloggers immune from any corporate liability, they are also unaffected by time/space continuum. Wishing that the internet has freed us from all social responsibility seems to be the new risk posed by the net. Of course even saying that brands me as someone stuck in the old ways.

Perhaps someone should just ask Dooce (yet again) about the risks of corporate blogging.

Posted by: Tim Swan at March 29, 2006 10:39 AM

Tim, The great thing about the Internet is that when you act like a dickhead you get praised for "exhibiting authenticity."

Posted by: Nick at March 29, 2006 10:56 AM

Nick, that's only true if one is authentically a dickhead. :-)

Posted by: Christopher Carfi at March 29, 2006 04:25 PM

Interestingly enough, I read this just before going to a presentation this morning by Scoble and Israel, and brought it up during the conversation that ensued. My perception is that neither they nor Nick are really talking about this mechanism (blogging) in terms of what it is (just another mechanism for communications--public relations in this specific context). Bob and Shel are very rah-rah about it without necessarily recognizing some of the limitations, and Nick is very down on it without apparently appreciating the strengths.

I mentioned that I would like to see the three of them in a room together some time and didn't get a very positive response. :)

Shel is right that running the process past a lawyer would do much to destroy it's intrinsic value to a company. Obviously you need to not have someone stupid blogging for your company, but running it through legal defeats the purpose of direct, "authentic" communication with the customer, which is the only major advantage of this mechanism that I can see (besides secondary SEO effects).

Nick is also right that someone is eventually going to get sued over it.

But so what? Companies get sued for PR they put out all the time--Powerade just got sued (and lost) over a television commercial. Why should blogging be any different, Nick? It's a risk that comes with the territory.

And on the other hand, "authentic" conversation is no replacement for having corporate PR strategy, decent products, and intelligent handling of legal risks.

Ya'll, on both sides, are making way more out of blogging than it actually is, and it's warping views of both the benefits and the risks.

Posted by: Scott Wilson at March 29, 2006 06:22 PM

Scott,

Thanks for the thoughtful post, which I largely agree with (and doesn't seem all that different from the point of view I laid out in my earlier "seven rules" post). As to:

Nick is also right that someone is eventually going to get sued over it. But so what? Companies get sued for PR they put out all the time - Powerade just got sued (and lost) over a television commercial. Why should blogging be any different, Nick? It's a risk that comes with the territory.

I don't think blogging is any different in this regard. Companies routinely do legally risky things because they've decided that the benefits outweigh the risks. That's fine. Managers should do the managing, and lawyers should do the lawyering. My point is simply that you should be fully aware of the risks that blogging may entail. Then you can make informed decisions and establish reasonable policies. I'm having trouble seeing why that should strike some people as a controversial idea.

By the way, the fact that you have to put "authentic" in quotes speaks eloquently to the inauthenticity of what passes for "authenticity" in this whole discussion. People can be authentic (as long as they're not trying to be), but I have trouble believing that the idea of "authenticity" applies to big companies (except in quotes).

Posted by: Nick at March 29, 2006 10:17 PM

Nick,

Whether an employee of a company blogs or not they're not supposed to share insider information or infringe on third party IP or hype an IPO in the quiet period. What’s new here?

Three questions:

1) What in that list above is a concern specifically because someone is blogging?

2) What is a lawyer going to do to fix it? Is there some document they should write, someone they should sue, some policy they should create? What is the practical next step?

3) What is the definition of a corporate blog? Are all blogs written by employees of corporations de facto corporate blogs? If not, where’s the line?

Posted by: Charles Zedlewski at March 30, 2006 01:03 AM

Charles,

1. The difference lies in the medium, I'd say. Blogs make it much easier to broadcast to the world than has previously been possible.

2. I'm not sure anyone can fix "it" (whatever "it" is). Corporate counsel would do what corporate counsel does: Provide counsel on potential legal issues so the company and its employees aren't taken by surprise. The counsel would, I'd think, be taken into account in establishing policies. (There's nothing unusual here; this is why companies retain legal counsel.)

3. I don't know (and from what I've read it's ambiguous). That's one of the tricky things. (The article I linked to in an earlier comment on this thread discusses this issue.)

Posted by: Nick at March 30, 2006 06:34 AM

Scott,

You actually thought you'd get a warm reception from Scoble/Israel about having a sit down with Nick ? Have you been reading Nick's blogs for long ?

Sure, maybe sometimes Nick's blogs have sounded a little "downer" with respect to blogging. That's because everyone's grown so conditioned to think "Why shouldn't I speak my mind ?". Of course you should speak your mind, but not on a companies nickel or dime ( Is it starting to cost that much to post ? ), or unless they've provided you with the avenues and means ( and boundaries within which ) to do so. The problem is that most company haven't done that last bit ( you know, the part within the parentheses ).

Most who've "opened up the valve" have done so with the thought of "It'll be great PR !". Not to speak for Nick, but my take on what he was saying is that companies need to stop and think for a minute. Think about what boundaries corporate blogs ( for the individual company ) need to adhere to, and then set the bloggers loose.

I don't think that's stifling or inhibiting of any company that's thought out it's public presence soundly enough.

Somewhere in the middle of Rah-Rah, and Bah-Humbug ( not saying that's you Nick, just couldn't think of a better phrase as I was typing ), is the real space for corporate blogs. I don't think anyone's particularly found it yet. I think everyone's just been hanging their laundry out on the wire. Sometime, some of it's going to come loose and cause trouble. It's all dependent on how the winds of blogging favor blow.

Posted by: Marcelo Lopez at March 30, 2006 10:22 AM

I think "what's new" here is that there's a community of evangelist bloggers who, in their enthusiasm for the medium, sometimes writes things that are fine for a pesonal blog, but are questionable when they're writing about a corporation that has shareholders, risks, etc. The real problem here is the dogmatic approach that some have about blogging, as though the technology somehow made the content more "authentic" (they're those damned quotes again.) Maybe corporate blogging is just an oxymoron and we should call it "PR flackery using blogging tools".

Posted by: Tim Swan at March 30, 2006 11:57 AM

Legal actions cause confiscating of desktops/laptops and freezing of email accounts anyway. Blogs would just be one more entity to the mix. The point though would be that the damage done would be much higher in case of blogs than ever possible through emails. This mainly because of the much wider audience.... Would corporates care about that! Well maybe.... but then like you seemed to agree, the advantages far outway the loss.
Hey, If we held back because of legal actions, we would never have had even emails in the corporate environment.

Posted by: Arun Poondi at March 30, 2006 02:15 PM

It may take a long time to sort out and the first cases will set the precedents. Andrew Hamilton argued in defense of John Peter Zenger in New York in 1735, marking the move for freedom of the press. Not until 1805 did New York State's legislature uphold the principle of freedom of the press...

Cautious and wise thinking is prudent and necessary.

Posted by: H.A. Page at March 30, 2006 02:16 PM

I've talked with many lawyers at length about this stuff. This is part of "blogging smart."

We have 810 lawyers here at Microsoft.

Here's a good video where I cover some of this stuff with one of ours: http://channel9.msdn.com/Showpost.aspx?postid=172673 (he has a blog, by the way, so he's not too worried).

Posted by: Robert Scoble at March 30, 2006 05:19 PM

First time here...great discussion.

This may be a bit of a rehash of Scott Wilson’s insightful post, to which I add “ditto”, and the following-

When it comes right down to it, how many of us want to read "Corporate Safe" pabulum? And now, a show of hands for how many of us running corporations (even small ones) want to see the equivalent of Penthouse Forum on our corporate bloggs?

I see clearly where Shel is coming from (though, I do not think your advice is lame). Blogger’s really can spot BS from a mile away, and if you know that Blogging is going to be your primary path for public relations, you have to be “authentic”, so the path has got to be going at least in the same direction of what the consumer/blog reader wants.

Call it the Three Bear’s path. Not too hot, not too cold, just right. No pictures of Bill Gates as the Antichrist, no Stepford wives’ screed on why the company is so great.

Posted by: W.R. Printz at March 30, 2006 10:18 PM

Scott,

You actually thought you'd get a warm reception from Scoble/Israel about having a sit down with Nick ? Have you been reading Nick's blogs for long ?

Well, maybe not warm, exactly, but they've both placed such tremendous value on open communication and public debate in their blogs that I expected a bit more interest in the idea.

Instead, I got much the same impression that Werner over at Amazon got, which is that they aren't much prepared to address dissenting views in a traditional debate format. They don't seem to have considered the opposing viewpoints very carefully and that makes it difficult for them to address them directly--you just get the initial points restated rather than a real dialogue, which is disappointing to me personally, because I think it's an interesting subject and that they have some great points and would like to hear their considered response to some of Nick and Werner's points.

Posted by: Scott Wilson at March 31, 2006 10:06 AM

Scott,

I concur. What I(!) would pay for at a conference ( un-conference ? ) is to hear this subject spoken thoroughly ( yeah, that's going to happen anytime soon. ) just as you say. With minds open, not just philosophies or banners blazing.

Robert,

Whether on a blog, or as an online FORUM post, espousing or conveying corporate information should have a sanity check system. One that makes it both open and expressive for those who can provide value to current and potential customers, and keep internal that which should be.

I don't much think that per se, we're referring to YOUR blog, so much as in general. Although I gotta tell ya, better you work for BillG than SteveJ. Because I don't think the Apple Rumor mill could get wound up any more than it is nowadays. Imagine, Scoblizer on Apple's payroll, let the PR skullduggery begin !

Posted by: Marcelo Lopez at March 31, 2006 11:48 AM

In my prior life as a Howard Rice lawyer, I helped write the overview Nick quoted. Interestingly, he didn't include our recommendations, which-- boiled down-- amounted to:

1. Educate your employees about areas of risk, whether through written guidelines, training sessions or whatever works best for your company, and make sure legal has an open-door policy for answering questions that come up.

2. Keep an eye on what gets posted, and if you really think you need to pull something, do it.

We didn't recommend having blog posts reviewed by legal in advance; lots of companies will be tempted to do it, but my personal view is that it sucks the life out of the blog and doesn't do much more, from a risk-management perspective, than you'd accomplish by having legal read the posts after they're live and make adjustments as needed.

Scoble says: "I've talked with many lawyers at length about this stuff. This is part of 'blogging smart.'" Amen. If a company can get this to be about increasing awareness of legal issues rather than ham-handedly controlling the communication, I think it's on the right path.

Posted by: Sue Krenek at March 31, 2006 07:23 PM

Sue, That seems like sound advice. Thanks. Nick

Posted by: Nick at March 31, 2006 10:08 PM

Last week some of the heavyweights of the blogsphere (Carr, Israel, Scobe, Vogels and so on) debated the merits of the corporate blog, and whether lawyers should be involved or not.

I'd like to take issue with Israel's comments:  "For [the] record, your advice on calling in the lawyers is lame and a sure-fire to make the blogs as lame as your idea." 

I think he is talking to the wrong lawyers.

The blogsphere is now home to a thriving community of lawyers and people interested in law that make use of blogs  for the same reasons that non-lawyers do. There is a term to describe these law blogs. (Blawg) there is even a tee-shirt, presumably not for wear in court.

Innovative lawyers use podcasts and blogs to communicate with their clients and prospects. Some examples, and there are many more. See Human Law for podcast use Nakedlaw provides commentary on new cases and trends.  IPKat is an excellent source for patent, copyright and other IP issues and commentary. Law professor commentary is not currently precedent, but useful reading nevertheless. Blogs are really helping to inform about the law, especially information technology related law.  Susskind's talk here on the future of law is well worth a listen.

Contrary to common wisdom, some lawyers are very humourous. Geeklawyer is one of the funniest blogs I've come across. I'll try and call him if I ever get into trouble for my blog. Geeklawyer is the Rumpole of the web.

Despite the dangers of "corporate" blogging, it seems that savvy lawyers themselves see these risks as acceptable. The blog is changing the way law is marketed, and the way legal information is spread.  Working with a lawyer that understands the risks of  the blog, while grasping its business benefits is surely the sensible way forward.

Lawyer bashing is an easy sport. Like it or not, the law permeates much of what we do, corporate or otherwise.

Employees are going to blog anyway, so understanding what they are upto and why is basic risk management and common sense.  As Lydon Johnson commented about Edgar Hoover,

"It's probably better to have him inside the tent pissing out, than outside the tent pissing in."

Imagine his blog.

Posted by: Thomas Otter at April 2, 2006 08:56 AM

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