Social media changed the way the fashion industry builds brands and drives sales in the digital age: Beautiful Instagram feeds, live-streaming video and the use of outside influencers have become favored methods to engage the fashion-conscious consumer. Mobile is increasingly the medium where companies promote new collections, run contests, connect with customers, exhibit the ethos of the brand and its designers, and provide real-time peeks on the runway.
The visual nature of social media platforms makes them a strong medium to showcase products and brand identity, and outside influencers with large followings reaching into the millions can introduce potential new customers to a company or its newest offerings, often in a matter of hours.
Yet, a sophisticated social media presence requires policies that protect a company’s legal position. With employees responsible for updating social media accounts and monitoring outside influencers, it is important to incorporate the right language in employee manuals and handbooks to educate employees on proper procedures and provide legal protection in the event of a dispute over ownership and access to social media accounts and content.
Indeed, to truly minimize risk in this sphere, a separate social media policy is preferred to cover both internal procedures concerning employees and external policies involving influencers and consultants. Established fashion houses and smaller enterprises alike may want to undergo a social media “autopsy” to ensure the right agreements and procedures are in place.
To keep up with the speed of digital advertising, company manuals and the social media policy should be reviewed at least annually to respond to changes to technology. Such policies should delineate clear procedures about social media content and account ownership and reflect changes to the Federal Trade Commission rules for endorsements (and be reactive to lessons learned from FTC enforcement actions), as well as educate employees and protect against liability for copyright and trademark infringement from the unauthorized use of intellectual property owned by these parties.
All company handbooks and policies should state that any social media account created, maintained or used by an employee in connection with his or her employment or role at the company is a business account owned by the company; business accounts and an employee’s personal accounts should not be intermingled. This is especially important in states that have laws that limit employers’ access to employees’ personal social media accounts.
Similarly, all manuals and policies should state that any social media content posted on behalf of the company is part of the scope of employment and therefore owned by the company. The same principles should apply to outside social media consultants, ideally reduced to an agreement which also should contain a written copyright assignment transferring all original posted content and images to the company.
Such policies can prevent social media account disputes, such as when a departing employee attempts to declare ownership over a social media account, or posted content and valuable followers — particularly where the employee was allowed to use the company account for both personal and business purposes. With the law unsettled in this area, it is wise for companies to have a social media policy in place to avoid any misunderstandings about procedure or, at minimum, put the company in the strongest position in the event of litigation.
There have been a number of disputes over the ownership of social media accounts due to gaps in employee handbooks, non-compete agreements or independent contractor agreements — such disputes can become stickier when a departing employee leaving for a competitor is involved.
As part of a written social media policy, it is recommended that the company assign a high-level employee to the position of “social media administrator.” He or she should maintain login credentials for all the company social media accounts and update the passwords twice per year, or when appropriate due to change in personnel or at the end of a social media consultant’s engagement. Accounts should be monitored to ensure that the company retains current access to all accounts to avoid a standoff with an employee who refuses to provide login credentials to a company account.
In fact, before terminating an employee or ending the engagement with a social media consultant with access to the company’s social media accounts, it is sensible to log in to such accounts and change the passwords to avoid any ownership disputes. Moreover, it is important to verify that all company accounts are registered as business accounts and to monitor postings to ensure employees are using company accounts in accordance with your social media policy.
Also, if a particular social media platform requires business accounts to be linked to a personal account, then the linked account should be held by the social media administrator as part of his or her company responsibilities.
A social media policy also should:
• Expressly state who in the company manages the company’s social media presence.
• Outline the procedures social media influencers must follow to comply with the FTC endorsement guidelines and include a copy of the company’s form influencer agreement. The FTC has brought enforcement actions against a number of companies and marketing firms related to influencer campaigns.
• Describe what social media information the company deems confidential and which therefore must be returned to the company before an employee leaves.
• Expressly prohibit “astroturfing,” which may include employees or employees of ad agencies posting anonymous positive online reviews or endorsements of the company’s products to create buzz without first disclosing their connection to the company.
With the right policies and agreements in place governing the social media activity of employees and outside consultants and influencers, a leading fashion brand as well as an emerging designer can protect against losing valuable social media rights while protecting against regulatory scrutiny — and leaving more time and resources for creating new collections and new social media campaigns.
Monica B. Richman is a partner in the New York office at Dentons. She has created a leading practice as intellectual property counsel to clients who include many of the world’s biggest names in entertainment and fashion. Her specialties include licensing, commercial contracts, and intellectual property development, protection and management. Francesca Montalvo Witzburg is an associate with Dentons specializing in the fashion and entertainment industries.
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