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Employee Social Networking Can Lead to Employer Liability

Labor & Employment Law Update Otto W. Immel, Dawn C. Valdivia, Courtney R. Heeren

As social media sites like Facebook and Twitter continue to evolve and multiply in number, employers are faced with the responsibility of establishing policies that cover not only an employee's conduct in the traditional, physical workplace, but also an employee's work-related conduct in electronic forums. Recent revisions to the Federal Trade Commission's ("FTC") guidelines reveal the need for employers to have policies that address employees' use of social media to prevent employees from making misleading or improper statements about the employer's products or services in electronic communications, and minimizing the potential for liability for claims based on those statements.

FTC Amendments Could Lead to Employer Liability for Employee's Online Conduct

At the very end of 2009, the FTC issued revisions to federal guidelines designed to protect consumers from deceptive endorsements and testimonials in advertising. The FTC's newly revised guidelines apply to endorsements made using "new media," such as blogs, Wiki's (e.g., Wikipedia) and other social networking sites such as Facebook, Twitter and LinkedIn. According to the guidelines, which are codified at 16 C.F.R. ยง 255, an endorsement is "any advertising message … that consumers are likely to believe reflects the opinions, beliefs, findings or experiences of a party other than the sponsoring advertiser."

According to the FTC, employers may be subject to liability for false or unsubstantiated statements made through endorsements, or for failing to disclose material connections between themselves and their endorsers. Moreover, if an employee's online statements on his or her blog or other social media site relate to the Company's products or services and do not disclose the employment relationship between the employee and the employer, the employer may be held liable for false or unsubstantiated statements - even if the employee's comments are not authorized or even known by the employer. In its comments to the revised guidelines, however, the FTC stated that although it had brought enforcement actions against companies "whose failure to establish or maintain appropriate internal procedures" had resulted in consumer injury, it was unaware of any action brought when a single "rogue" employee acted contrary to established company policy.

Establishing a Social Media Policy

The FTC's revised guidelines provide an opportunity to establish a Social Media Policy, or revise an existing electronic communications policy, to cover social media-type communications. In order to minimize potential liability, employers should consider including in a new policy, or revising existing policies, to include the following:

  • Notice that employees are expected to conduct themselves according to the standards established in the Company's Code of Conduct or other ethics-related policies when using social media sites.
  • A requirement that, to the extent employees utilize social media sites, they not represent themselves as a spokesperson for or agent of the Company unless expressly authorized to do so.
  • A requirement that if employees express an opinion about the employer's products or services, they are required to state that they are employed by the Company.
  • A further requirement that if employees identify themselves as employees of the Company on the social media platform, they take appropriate steps to ensure that readers will not view them as the de facto spokesperson for the Company, such as by including the following statement: "The views expressed on this Web site/blog/network are mine alone and do not necessarily represent the views of my employer."
  • Notice that an employee's use of social media is also subject to other related policies, such as policies addressing electronic communications, protection of confidential information, etc. as well as the Company's anti-harassment and anti-discrimination policies.
  • Notice that the Company reserves the right to monitor the use of social media sites and other Internet usage on Company-owned equipment, and that employees who violate the foregoing may be subject to disciplinary action, up to and including discharge.
One of the authors of this client update, Pamela M. Ploor, a partner in the Firm's Milwaukee office, has been named a 2010 BTI Client Service All-Star MVP for delivering superior client service. Ploor is one of only 13 labor and employment attorneys nationwide to receive the All-Star honor from BTI Consulting Group, which surveys corporate counsel at Fortune 1000 companies and large organizations to identify attorneys who drive superior client relationships. Recipients are recognized for their efforts to reduce costs, revisit staffing and billing strategies at their firms, analyze litigation portfolios with an eye towards risk and cost reduction, and more. Ploor has received the All-Star MVP award for two straight years.

Questions concerning the FTC's recent guidelines, electronic communication and related policies, or for assistance preparing or revising such policies, please contact: Courtney Heeren at 414-277-3071 / courtney.heeren@quarles.com, Pam Ploor at 414-277-5661 / pamela.ploor@quarles.com, Dawn Valdivia at 602-229-5291 / dawn.valdivia@quarles.com, Otto Immel at 239-659-5041 / otto.immel@quarles.com or your Quarles & Brady attorney.