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Friday, July 16, 2010

Social Media Postings Risky for Employers


















Alabama@Work
By: Tommy Eden, Attorney

The U.S. Federal Trade Commission (“FTC”) has adopted revised Guides Concerning the Use of Endorsements and Testimonials in Advertising (the “Guides”). See 16 CFR Part 255 for the complete Guide http://ecfr.gpoaccess.gov/. The Guides seek to protect consumers against deceptive marketing schemes by requiring the disclosure of certain “material connections” between advertisers and endorsers-such as employees. The Guides state that employers may be liable under the FTC Act for their employees’ postings on social media – such as Facebook, LinkedIn, Twitter, and blogs – that comment on the employer’s products or services without properly disclosing the employment relationship, or where such employee postings are otherwise misleading.

An Employee Posting May Constitute an Endorsement. The FTC considers a speaker (e.g., an employee) who disseminates positive statements concerning an advertiser’s (e.g., an employer’s) products or services will be considered to have provided an endorsement under the Guides if he or she is “acting on behalf of the advertiser or its agent.” Consider the following example from the Guides:

An online message board designated for discussions of new music download technology is frequented by MP3 player enthusiasts. They exchange information about new products, utilities, and the functionality of numerous playback devices. Unbeknownst to the message board community, an employee of a leading playback device manufacturer has been posting messages on the discussion board promoting the manufacturer’s product. Knowledge of this poster’s employment likely would affect the weight or credibility of her endorsement. Therefore, the poster should clearly and conspicuously disclose her relationship to the manufacturer to members and readers of the message board.

Employer Liability for Employee Social Media Endorsements. An employer may be subject to liability for their employees’ “false or unsubstantiated statements made through endorsements” or for “failing to disclose material connections between themselves and their endorsers.” Additionally, employers may be liable for such unsubstantiated or deceptive statements posted by independent contractors or other service providers of the employer. The Employers may incur liability even where it had no knowledge of the employee’s postings or blogging.

Protect Yourself by Enacting a Social Media Policy. The FTC has advised that “the establishment of appropriate procedures would warrant consideration in [the FTC’s] decision as to whether law enforcement action would be an appropriate use of agency resources ….” The FTC has already brought disciplinary action against employers that failed to establish or maintain appropriate internal procedures, resulting in consumer injury. Employers may not rely on a rogue employee defense to avoid liability under the Guides, especially where the employer failed to implement an appropriate social media policy.

Common Sense Counsel: Considering the FTC’s Guides, an employer’s social media policy should clearly define the limitations upon employees’ work-related use of social media channels requiring: (1) employees to identify their association with the employer whenever an employee is using social media to comment upon the employer’s products or services; (2) unless an employee’s blogging or online postings are officially sanctioned and reviewed by the employer, the employee should be required to use conspicuous disclaimers that his or her views do not represent the views of the employer; (3) cover issues such as the use of photographs and names of co-employees or customers; and (4) employees should be reminded of the employer’s right to lawfully and respectfully monitor their social media postings and other online activities for compliance with the employer’s policies, the Guides, and applicable law.

Tommy Eden is a Lee County native, an attorney with the local office of Constangy, Brooks & Smith, LLP and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com