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What’s the Emoji for Liability? The Dangers of Using Text Messages for Business Communications.


By David E. Hart

Ask any Millennial or Gen Zer who has grown up with a phone in their hand what their primary form of communication is, and they won’t say a voice call, email, or even a face-to-face conversation. They will tell you that text messaging is the primary way they like to keep in touch and be reached by others. In fact, according to a hypothetical question posed by OpenMarket, if given a choice between a texting-only and voice-only phone, 75% of millennials would choose the text-only device. But as these generations enter the workforce and their older colleagues have also made texting ubiquitous in their lives, employees have brought their texting proclivities into their workplaces and business communications.

But what may be an efficient and effective means for making dinner plans, sharing the latest memes, or engaging in other social conversations is not necessarily suited to conducting business. As attractive and ingrained as texting may be, using it for business communications creates a host of legal, financial, and reputational risks for companies and their employees. The very nature of text messaging – informal, ephemeral, and retained nowhere beyond the sender’s and receiver’s devices – can lead to costly misunderstandings, data privacy issues, document retention, and evidentiary problems that won’t leave companies ROFL (“Rolling On the Floor Laughing,” for the text lingo-challenged).

Allowing employees to conduct business through text messaging without proper governance is a significant compliance gap that all companies must address. Here are three reasons why companies need to get a handle on their texting policies and practices. 

Lack of Formality 

Not that business emails or written correspondence always rise to the level of eloquent prose, but even the most informal email is likely more detailed, clear, and complete than a text. The brevity of texts and the copious use of emojis, acronyms, GIFs, and other shorthand in text messages can create ambiguity and confusion. This informality can lead to sloppiness or a mistaken belief that the texts, especially to third parties outside the organization, are something other than “official” communication. The casual, offhand vibe of texts can also lead employees to make statements, commitments, or harmful admissions they perhaps would think twice about before hitting “send” on an email. As discussed below, this laxity can be costly and damaging to their employer if such texts become relevant to a dispute or lawsuit. 

Conversely, courts and regulatory bodies may not view text messages as legally binding or admissible documents, leading to potential disputes over the terms of agreements or commitments made via text. As such, businesses must be cautious about relying solely on text messages to establish contractual relationships or convey crucial information. 

Legal and Evidentiary Challenges

A company’s records usually take center stage in business litigation, as well as government investigations or prosecutions. Ideally, these records – contracts, invoices, purchase orders, correspondence, emails, and yes, texts and instant messages – will support the party’s position or counter the other party’s claims. But they also may contain problematic, damaging, or unflattering content. 

Good, bad, or ugly, all potentially relevant business records will be requested and ultimately obtained by the other party in litigation. And when litigation is anticipated, preserving electronic evidence, including text messages, becomes a legal obligation. Failure to preserve relevant text messages could lead to spoliation claims, where the intentional or negligent destruction of evidence may result in adverse legal consequences.

Additionally, it doesn’t matter if a text message was sent or received on a company-owned device or an employee’s personal device; if it is relevant, it is subject to production. And don’t expect phone carriers to have the texts that your employees or company may have deleted; they might only retain the content of messages until delivery is confirmed, if at all. 

Beyond document preservation obligations related to litigation, many industries are subject to specific regulations governing electronic communications. Using text messaging for business communication may inadvertently lead to non-compliance with these regulations, resulting in legal repercussions. For example, the financial sector is governed by strict regulations such as the Financial Industry Regulatory Authority (FINRA) rules in the United States, which mandate the retention and supervision of electronic communications. Failure to comply with these regulations can result in regulatory fines, legal actions, and reputational damage.

Businesses must implement robust systems for retaining and archiving text messages, ensuring that relevant communications can be retrieved and presented in legal proceedings. This proactive approach helps demonstrate transparency and compliance with legal obligations, strengthening the organization’s position in the face of potential legal challenges.

Data Security and Privacy Concerns

Most text messaging platforms are not highly encrypted and are vulnerable to hackers and data breaches, exposing businesses to significant legal risks related to data security and privacy. The confidential information shared through text messages, such as customer details, financial data, or proprietary business information, could be compromised if adequate security measures are not in place. 

The exposure or misuse of such information due to a security breach can result in severe legal consequences, including regulatory fines, lawsuits, and damage to the organization’s reputation.

What Businesses Should Do

To mitigate these risks, businesses should be cautious when using text messages for important communications. Where precision is crucial, relying on more formal communication channels, such as emails or written agreements, can help reduce the possibility of misinterpretation and provide clearer evidence in case of disputes.

Businesses should establish comprehensive communication and document retention policies for business-related text messages, including identifying the type of information that can be shared and limiting the devices employees can use for business communication via text to company-owned ones. Third-party IT text messaging archive vendors can create a comprehensive, easily searchable record of all text messages sent and received by employees on their devices. Additionally, requiring that employees only use encrypted messaging apps for texting can limit security vulnerabilities and ensure that all texts are sent and received on the same system.

While text messaging offers undeniable advantages in terms of speed and accessibility for business communication, organizations must be cognizant of the legal risks associated with its use. By addressing these challenges head-on, businesses can harness the benefits of text messaging while minimizing the associated legal risks and ensuring a secure and compliant communication environment.

If you have questions or would like to learn more about this issue, please contact David Hart at Maddin Hauser.