• by Laurie Sullivan  @lauriesullivan, February 4, 2010

Sharing company information on Facebook, Twitter and other social media sites can get employees fired, as American companies step up to tighten efforts that control the chatter.

Free speech still exists in the United States, for the most part outside the workplace. And signing a nondisclosure to protect confidential company information remains old hat. But updates to policies and procedures have begun to pop up to detail the sharing of trade secrets in social media sites. Executives at progressive companies who realize that employees chat on social networks take it one step further. They have begun to develop internal Web sites and blog posts to share information with employees about new product developments and initiatives.

Making the dos and don'ts perfectly clear, these companies also provide strict guidelines on what employees should and shouldn't broadcast on social media networks or tweet on Twitter. "Rather than presume social media is an evil empire that needs to be squashed, some companies empower and guide employees with information," says Joseph Rosenbaum, a Partner at Reed Smith, who chairs the firm's global Advertising Technology & Media Law practice. "It's better than feeling every time you open your mouth they will smack you with a hammer."

Rosenbaum views the most recent developments as a positive movement toward companies recognizing that social media exists, and that employees will continue to communicate this way with friends and acquaintances. And while he likens social media to the days when telephones and photocopy machines were viewed as disruptive tools to share personal information and intellectual property, giving employees the guidelines to share information makes companies feel as if executives can remain more in control of the message.

To some extent, they must control the message because that's what good advertising and marketing does, Rosenbaum explains. The problem remains trying to define "control" in the new world of social media, he says, which 'is totally different" than in the past.

Expect to see more lawsuits based on "wrongful dismissal" based on employees saying, "hey, I was just talking about my job on Twitter and they didn't like what I was saying because I wasn't touting the company's line," Rosenbaum says.

Social media makes it more difficult to hide. Rosenbaum doesn't suggest broadcasting the negativity or intellectual property secrets on Twitter. It's one thing to gripe on Facebook or Twitter, where Google, Yahoo or Microsoft search engines can pull in status updates and tweets into the real-time Web, and completely another to sit at a dinner table with a few friends shooting the breeze.

Ironically, Sun Microsystems Chief Executive Officer Jonathan Schwartz resigned Thursday, haiku style, through a less than 140-character message on Twitter. His tweet: Financial crisis/Stalled too many customers/CEO no more.

The economy accelerated the shift toward social during the past year, as conditions pushed the unemployment level to unprecedented highs and more dollars moved from traditional marketing in television and radio to online. "Companies can't ignore social media any more," Rosenbaum says. "Many companies still struggle about what to do, and I think they and the law will experiment this year on the permissible boundaries."