ShareBy: Blake Hegeman, CAE
Deputy General Counsel
Virginia Association of REALTORS®
Social media platforms like blogs and Facebook provide engaging ways to interact with target audiences, but users must know their risks. With well-crafted policies, regular training, and consultation with counsel, associations and members can minimize exposure to liability concerning key risk areas. These include defamation, advertising, intellectual property theft, antitrust violations, Code of Ethics issues, and state regulatory and statutory liability.
Defamation and Article 15
For whatever reason, when people communicate using a keyboard, they became braver and make statements they would never make in person, including statements that may be defamatory. Black’s Law Dictionary defines defamation as “A false written or oral statement that damages another’s reputation.” The nature of the Internet increases the risk of defamation liability: Publishing a defamatory statement is as easy as typing a nasty comment and clicking "post." A statement published online is often out there forever and can be easy to find. All a plaintiff's attorney has to do is search for the defamatory statement, hit "print," and head to the courthouse.
Why is this important to associations and REALTORS®? Increasingly, both host social media platforms where association staff, REALTORS® and the public can post comments. This exposes associations and REALTORS® to defamation liability on several fronts: For comments posted by association staff, the REALTOR® (or firm) hosting his site, and for those by third parties.
An association or REALTOR® firm should assume that comments posted by its employees/independent contractors on its website can result in liability. To mitigate this risk, the organization should have a well-crafted social media policy drafted by an attorney. Social media risk management training should also be provided to all staff annually, and perhaps more frequently to association staff that post regularly. This training should be supplemented with risk-management communications throughout the year.
With respect to defamatory third-party postings on association sites, associations enjoy considerable protection under federal law. Section 230 of the Communications Decency Act affords significant immunity for such postings to interactive online service providers, including blogs and other social media platforms provided by associations. Even with this protection, association staff should remove disparaging comments immediately and include a no-tolerance policy for defamatory statements in the association's online terms of use.
Individual REALTORS® and REALTOR® firms operating social media sites technically enjoy Communications Decency Act protection from defamatory third party postings. However, Article 15 imposes a higher duty on REALTORS® using social media. Article 15, Standard of Practice 15-3 states:
The obligation to refrain from making false or misleading statements about other real estate professionals, their businesses, and their business practices includes the duty to publish a clarification about or to remove statements made by others on electronic media the REALTOR® controls once the REALTOR® knows the statement is false or misleading. (Adopted 1/10, Amended 1/12).
This means that REALTORS® and REALTOR® firms have an affirmative obligation to publish clarifications about or remove defamatory comments made by others. Most website hosts do not have this obligation, but REALTORS® have a higher duty.
Please note that recent National Labor Relations Board decisions require social media policies to be narrowly drawn to protect employee speech about the terms and conditions of employment. The NLRB has jurisdiction over all nonsupervisory employees, not just union employees, so it is critical to work with an attorney familiar with this area of the law when drafting a social media policy.
Advertising
Blogs and other social media platforms are increasingly being used as an advertising vehicle for members. It is important to remember that many states require real estate licensees to include specific disclosures on all advertisements – for example, the firm name; licensee name; city and state of main/branch office; and states of licensure must be included on all online advertising in Virginia. Therefore, it is very important for members to determine what constitutes advertising in their states and what disclosures are required.
REALTORS® should also relook at Article 12 and its Standards of Practice before engaging in online advertising using social media. I have seen many cases where REALTORS® did not keep property information current on their sites (see Standard of Practice 12-8). A more blatant example of a potential violation of Article12 involved a listing agent using Photoshop to create a paved driveway in the MLS picture, when in reality the driveway was dirt. When asked about the discrepancy by the buyer agent, the listing agent replied that he had “engaged in virtual outdoor staging.” I’m guessing an ethics panel would look unfavorably on that tactic.
Intellectual Property Infringement
Social media platforms allow users to post comments, pictures, speeches, music, and videos with ease. This functionality obviously has benefits, but it also creates liability risks: It allows members and staff to publicly share information that does not belong to them and potentially infringe on another's intellectual property rights.
Intellectual property can be broadly defined, but it most often refers to copyright, patent, and trademark rights. Examples of intellectual property that can be protected include articles, books, photographs, speeches, software code, and music (copyright); a new machine (patent); and an association logo (trademark). Registration of copyrighted works is not necessary to confer ownership, so the lack of a copyright mark does not mean that material found on the Internet is unprotected and can be used freely.
Associations and members must take steps to prevent intellectual property infringement on their social media sites. Internally, they should have a social media policy that clearly outlines do's and don'ts. Posting material the association or member does not own without permission should be high on the list of don'ts. Associations and members should frequently train employees/independent contractors on social media policies and intellectual property issues generally.
To reduce liability risk for content posted by third parties, associations and members should prominently display their terms of use on their websites, clearly explaining takedown procedures for infringing material, describing consequences for infringement, and providing contact information so that a user may notify the association or member of a possible infringement. Ideally, users should be required to click a box acknowledging that they agree to the terms of use when they log on to an association social media platform. Some courts have required this level of agreement before the terms are binding on users.
A safe-harbor provision in the Digital Millennium Copyright Act, which includes elements discussed above, provides substantial protection for associations and members against copyright infringements by third parties. Associations should consult their attorneys about properly utilizing such protections.
Antitrust Violations
Associations are especially vulnerable to antitrust liability because they constitute a group of competitors that cooperate for some purpose. Typically, this cooperation is meant to advance the industry generally, and most of this activity complies with the law. However, activity that attempts to interfere with competition is a potential violation of antitrust law—including, for example, price fixing, anticompetitive membership restrictions, and improper standard-setting or certification conduct. Violations can carry severe penalties, both civil and criminal.
A violation can be inferred from an actual or informal agreement to restrain trade. For example, imagine a membership meeting in which a member stands up and suggests that all members should charge a certain commission. If members later start setting the same price for their commissions, it is possible that an antitrust violation may have occurred.
Associations must monitor their social media sites for antitrust red flags. For example, a member might post a comment on an association blog suggesting that all members refrain from doing business with a certain company. Even if no one agrees publicly, staff should encourage users of the site to (in antitrust parlance) "loudly dissociate" from the comment, stating their disagreement and saying they want no part of a boycotting conspiracy. The anticompetitive post should also be deleted as soon as possible.
Other protective measures associations should implement:
- The association should have an antitrust policy.
- The policy should be linked or displayed on all association sites.
- Staff and volunteers should be trained on antitrust law, especially those responsible for monitoring social media platforms.
Conclusion
Social media platforms are useful tools for associations and members in their practices, but they can create significant legal problems. Associations and members should work with counsel to establish a social media policy, terms of use, and other policies for staff, volunteers, and members to minimize the liability risk.
Blake Hegeman is deputy general counsel for the Virginia Association of REALTORS®. Email: blake@varealtor.com