Questions on New NAR Code of Ethics Policy

[UPDATE: The text of Standard of Practice 15-2 has been released. Please see below the fold.]

According to Ben Martin of the Virginia Association of REALTORS over at VARBuzz.com, NAR has released a new Code of Ethics:

Standard of Practice 15-2 was amended and a new Standard of Practice was approved to strengthen members’ obligations to refrain from making false or misleading statements about competitors, including in use of social media tools.

The new amendment includes the duty to publish a clarification about, or to remove statements made by, others on electronic media the REALTOR® controls once the REALTOR® knows the statement is false or misleading. For example, if you’re publishing a blog and someone posts a false or misleading comment about a fellow REALTOR® on it, it’s your duty to remove the post or publish a clarification when you become aware of it.

That was Ben quoting from a newsletter sent out by NAR to association executives, as the actual language of Standard of Practice 15-2 was not available.

Ben goes on to note a real concern:

As I understand it from this article on the Section 230 from the Electronic Freedom Foundation, the more Internet publishers take an active role in editing or publishing content posted by third parties, the more likely they are to open themselves up to legal liability.

Well, you should consult an actual lawyer for a real opinion if you’re concerned about this, but I have further questions from both a legal perspective and a social media perspective.

Legal Questions

Legally speaking, depending on how 15-2 is drafted, I can see several real questions that will almost assuredly require litigation to resolve.  Even if NAR — as a private member organization — is empowered to make its own rulings on some of these things, a member who has been disciplined under 15-2 can always bring suit against NAR itself.

First question is, what is meant by “false and misleading”?  SoP 15-2 currently reads:

The obligation to refrain from making false or misleading statements about competitors’ businesses and competitors’ business practices includes the duty to not knowingly or recklessly repeat, retransmit, or republish false or misleading statements made by others. This duty applies whether false or misleading statements are repeated in person, in writing, by technological means (e.g., the Internet), or by any other means. (Adopted 1/07)

I did a cursory look through the Code itself, and haven’t researched this, but…

Is the NAR definition of “false and misleading” the same as would be applied in a defamation case?

Who bears the burden of proof in a Code of Ethics proceeding?  In legal defamation cases, the burden of proof is actually on the defendant.  If I’m bringing a defamation action against you, I just have to show that the statement tends to be defamatory (i.e., bad for my reputation).  Then you have to show that the statement is true — that is, “truth is a defense” rather than “falsehood is an element of the complaint”.  The way the Code of Ethics is written, it almost suggests that the complainant would need to at least allege the statement was “false and misleading”.  But anything beyond just alleging it?

Does the offended party have to show any actual damages from these “false and misleading statements” or is it enough to be offended?

Social Media Questions

What Ben suggests is that SoP 15-2 — which already covers “by technological means (e.g., the Internet), or by any other means” — has been extended to specifically cover “Social Media”.  Now, whatever does that mean?

Blogs are certainly included.  Let’s also assume that Facebook and LinkedIn are also covered.

Is Twitter covered?  Direct messages in Twitter?  What about instant messaging?  Del.icio.us tags?  Google Reader sharing?

Re-tweeting someone else’s tweet is certainly “repeat, retransmit, or republish” under 15-2.  So the REALTOR now has an affirmative duty, once somehow notified that the original tweet was “false and misleading”, to delete the re-tweet or issue a clarification.  Imagine the burden that imposes.

If I share my del.icio.us tags with friends, and one of the blogposts I’ve tagged contains a “false and misleading” statement, do I now have an affirmative duty under the Code of Ethics to delete that tag or issue a clarification?

If I am a REALTOR, and have a online radio show, and a consumer calls up and says, “XYZ brokerage in my area did this bad thing”, and XYZ brokerage complains, do I have to delete the recordings of that show?  Do I have to publish a clarification?  Do I need to investigate whether the consumer’s claim was true or false?

Defining what “social media” means is a tricky proposition for those of us working in social media day in and day out.  Will  NAR be the first national organization of any note to be able to define what “social media” means, when folks like Ari Herzog cannot?

World, Meet Can O’ Worms

Time will tell what the answers to these questions are.  But my immediate sense right now is that this opens up far more questions and far more problems for REALTORS than may immediately be apparent.  The implications of this rule has the potential to make the whole “Google indexible IDX” issue seem a minor spring breeze in a teacup.

It is entirely possible that a strict application of a new 15-2 could dissuade every single REALTOR in the country to refrain from doing anything on social media at all except post listings and talk about their dog.  Certainly nothing that would even suggest competitive differentiation — “I’m the best REALTOR in the county” implies the others are not the best, and that tends to be defamatory, if you really want to get down to it.  Perhaps that tweet is “false and misleading” as well.

This is one issue I would love to hear the reasoning of  NAR Board of Directors on.

***UPDATE***: The language for 15-2 has been released, and posted on VARbuzz.com.  I am reproducing it here for sake of analysis:

15-2 The obligation to refrain from making false or misleading statements about competitors, competitors’ businesses and competitors’ business practices includes the duty to not knowingly or recklessly publish, repeat, retransmit, or republish false or misleading statements made by others. This duty applies whether false or misleading statements are repeated in person, in writing, by technological means (e.g., the Internet), or by any other means.

(Presumably 15-3) The obligation to refrain from making false or misleading statements about competitors, competitors’ businesses and competitors’ business practices includes the duty to publish a clarification about or to remove statements made by others on electronic media the REALTOR® controls once the REALTOR® knows the statement is false or misleading

Based on this language, some of my questions have been answered at least in part.

It appears, unless one is obtuse in applying the language, that anyone bringing a complaint against another REALTOR under 15-2 has to show two things:

1.  That the statement is false or misleading; and

2.  The REALTOR being complained about knows the statement is false or misleading.

Of course, this raises the rather tricky question of when it is that someone “knows” something.  Presumably, some sort of “reasonable person should/would know” standard would be imported into deliberations of the enforcement authority (whoever that is).

And there is no clarity (as yet) on what sort of standard of evidence is required for a statement to be “false or misleading”.  Is the word of the offended REALTOR enough?  Notarized letter?  Sworn statements?  Third party witnesses?  Meh — now I’m getting into Matlock territory.  (And I just lost all you Gen-Yers just now, didn’t I?)

I still find it somewhat amazing that 15-2 imposes an affirmative duty to delete or clarify, however.  Furthermore, it appears to me that the obligations under 15-3(?) do not replace or take the place of the obligation in 15-2 because of that word “includes”.  In other words, the actual obligation is 15-2:

…the duty to not knowingly or recklessly publish, repeat, retransmit, or republish false or misleading statements made by others. This duty applies whether false or misleading statements are repeated in person, in writing, by technological means (e.g., the Internet), or by any other means.

Which then raises questions about what constitutes “recklessness” in this context.  If a commenter on my blog (let’s assume I’m a REALTOR) says, “Agent XYZ was sleeping on the job during the Open House I went to”, do I have to call Agent XYZ to confirm or deny?  If I don’t, am I reckless, or merely negligent?

And the language still leaves me wondering how broadly the “repeat, retransmit or republish” will be interpreted by decisionmakers.  If the above statement wasn’t made on my blog, but on the commenter’s own non-REALTOR blog, which is fed to my FaceBook page via RSS… is that retransmission or republication?  Note that the “control” element is entirely missing from 15-2.

So some questions answered; other questions remain.

-rsh