Facebook A No-Go Despite Few Discovery Bids

By Ryan Davis

Law360, New York (October 14, 2009) -- It remains rare for U.S. companies to be required to produce electronic information from social networking Web sites, but around half of American businesses block employees from using the sites at the office, according to Fulbright & Jaworski LLP's 2009 Litigation Trends Survey.

Houston-based Fulbright & Jaworski released the survey results Thursday, which found that only 4 percent of U.S. companies reported being required to produce social networking data in the past 12 months.

Corporate law departments in the U.K. were also polled in the survey, and requests for social networking data appear to be considerably more common there: 18 percent of British companies reported getting such a request in 2008.

The survey also found that 46 percent of U.S. companies restrict employees from accessing some mixture of the most popular social networking sites, including Facebook, MySpace, LinkedIn, Twitter and YouTube.

In the U.K., meanwhile, 52 percent of companies did the same, according to the report.

The survey showed that 32 percent of U.S. companies had no restrictions on any of the sites, compared with 37 percent of companies in the U.K.

The bigger the company, the more likely it is to restrict social networking sites, the survey said.

Among companies in the U.S. and the U.K. with annual gross revenues under $100 million, 53 percent reported no restrictions on social networking sites.

In contrast, only 27 percent of companies with revenues over $1 billion reported having no restrictions, and fully half reported blocking Facebook and MySpace.

Private companies were less likely to block social networking sites than their public counterparts, the survey found. Among private companies, 41 percent reported having no restrictions, but only 28 percent of public companies said the same.

Technology companies were the least likely to block access to social networking sites, the survey said, with 56 percent reporting no restrictions.

Engineering and insurance firms, meanwhile, were most likely to block access, according to the report. Only 19 percent and 20 percent, respectively, reported having no restrictions.

Many companies have begun using social networking sites to hype their products, communicate with customers and share information among employees, but conducting discovery on data posted to such sites will present an array of challenges, experts told Law360 earlier in 2009.

There are a number of ways in which information that would be relevant to a lawsuit could end up on a social networking site, lawyers said, including employees posting Twitter updates about their companies' products, chatting with customers on a Facebook group for fans of the company or just discussing business matters among themselves using one of the sites.

Many of the pertinent legal questions involving discovery of such data have yet to be addressed because the technology is still catching on, and there hasn't been a major case involving e-discovery issues with social networking data, they said.

But it's only a matter of time, according to lawyers.

Shannon Capone Kirk, e-discovery counsel at Ropes & Gray LLP, said earlier in 2009 that while she doesn't know of any discovery “horror stories” related to social networking, “I'm sure there will be one soon.”

The 2009 Fulbright & Jaworski Litigation Trends Survey was conducted from May to July by Greenwood Associates, a business research firm in Houston. A total of 408 company lawyers responded to the survey, 53 percent of them from companies with annual revenue of over $1 billion.