Monday, June 24, 2013

The Arkansas Social Media Statute (Act 1480): More Questions than Answers?


The use of social media, especially in commercial and advocacy settings, is a key part of the sustainasphere. Employers who use and regulate employee use of social media can anticipate a number of compliance challenges and questions in connection the new Arkansas Social Media Statute (Act 1480). For example:

• How can employers use social media in investigations? The stature allows employer to request access in connection with a “formal investigation or related proceeding,” but does not define the phrase, leaving ambiguous and open to interpretation which investigations and proceedings qualify.

• How can employers use information publically available on social media? Act 1480 allows employers to view information publically available on the internet. But the statute is silent on whether employers can use the information they view as the basis for an employment-related decision, or as the basis for instituting a “formal investigation or related proceeding.” A related open question is whether, without asking for a password or username, an employer can ask an employee to verify “ownership” of a social media account on which the employer views publically available information, or to verify the information publically viewed.

• Who can sue for a violation of the Arkansas Social Media Statute? The Arkansas Legislature presumably intended to give employees and prospective employees the right to sue for violations of the statute. However, Act 1480 does not explicitly give an employee, prospective employee, or other person injured or damaged by the alleged violation the right to sue – i.e., the new statute does not provide for a private right of action.

• Is there a right to a jury trial or punitive damages? Assuming that employees and prospective employees do have the right to sue, do they have a right to a jury trial? To injunctive or other equitable relief? To punitive damages?

• How about attorneys’ to the prevailing party? Similarly, would an employee or prospective employee who prevails in a lawsuit under the new statute have a right to recover their attorneys’ fees incurred in prosecuting the action? The answer to this question is likely no, since Arkansas law is clear that absent a rule or statute explicitly providing for the recovery of attorneys’ fees, the parties to a suit bear their own fees.

• Is a violation of the Arkansas Social Media Statute also a violation of the Arkansas Deceptive Trade Practices Act (“ADTPA”)? The ADTPA contains a “catch-all” provision generally prohibiting unconscionable, false, or deceptive practices in business, commerce, or trade. See Ark. Code Ann. § 4-88-107(a)(10). The Arkansas Supreme Court has defined “unconscionable” to include conduct that violates a statute. See Baptist Health v. Murphy, 365 Ark. 115, 226 S.W.3d 800 (2006). Thus, an employer’s conduct in violation of the new statute might form the basis for a suit against the employer for violating the ADTPA. (Significantly, the ADTPA explicitly provides that any person who is damaged or injured by a violation of the ADTPA “has a cause of action to recover . . . reasonable attorney’s fees.” Ark. Code Ann. § 4-88-113(f)).

• Are employees and prospective employees required to exhaust administrative or internal complaint processes and remedies as a pre-requisite to filing a suit?

• What is a “self-regulatory organization”? The statute provides that it is not intended to prevent an employer from complying with the rules or regulations of “self-regulatory organizations.” This provision appears intended to address concerns raised in other states about conflicts with compliance with the rules and regulations of agencies such as the federal Securities Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). But the phrase “self-regulatory organization” is undefined. For example, would the American Bar Association, American Medical Association, or National Association of Realtors qualify as self-regulatory organizations for purposes of the statute?

These concerns will most likely be addressed and resolved through practice and litigation over time. What is clear is that, as indicated in the previous post, employers with a policy or practice of routinely asking employees to disclose or for access to their social media need to assess that policy or practice against the Arkansas Social Media Statute, probably with the assistance of counsel.

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