On December 1, 2009, the FTC issued revised Guides Concerning the Use of Endorsements and Testimonials in Advertising, 16 C.F.R. Part 255, designed to protect consumers from deceptive endorsements and advertisements. The revised Guides make clear that employees who use social media—such as blogs, message boards, or social networking sites—to make comments regarding company products or services without disclosing the employment relationship might create liability for their employers. Under those circumstances, the employment relationship would be a “material connection” between the company and an endorser that might materially affect the weight or credibility of the endorsement and therefore must be fully disclosed.

The revised Guides provide the following example to illustrate this point:

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.

16 C.F.R. § 255.5, Example 8.

The FTC Guides highlight the significance of company policies governing employee conduct in online media forums. In comments on the Guides, the FTC stated that it would be mindful of an employer’s establishment of appropriate procedures governing its employees’ participation in social media when determining whether to take action against a company whose employee failed to comply with established company protocol. The FTC further stated that it was unaware of any instance in which it had brought an enforcement action against a company for the actions of a single “rogue” employee who violated established company policy that adequately covered the conduct in question.

The FTC has declined to spell out the procedures that companies should put in place to monitor compliance with the Guides, and given the variety among workplaces, one size does not fit all employers when it comes to social networking policies. Regulating employees’ social computing activities can raise varied issues for employers, and companies should consult legal counsel before implementing policies governing employee use of social networking platforms.

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