The Federal Trade Commission (FTC) recently issued new consumer Guides Concerning the Use of Endorsement and Testimonials in Advertising (the revised Guides) which have raised employer concerns about liability for their employees’ electronic communications. The revised Guides advise that the FTC may take action against a company for failing to disclose its material connection or employment relationship with an employee posting messages or blogging when off-duty and, as a result, may hold the company liable along with the employee for making false and unsubstantiated claims about the endorsed product or service. A well-intended and enthusiastic employee who posts an on-line message endorsing his employer’s products or services may unwittingly become an “endorser,” subject to the revised Guides because you can’t always recognize an advertisement when you’re looking at it on Facebook or Twitter.

The revised Guides increase the employer’s risk of liability from the inappropriate employee use of electronic technology. Among others such use can expose employers to liability for sexual harassment discrimination and hostile work environment litigation, as well as costly intellectual property infringement claims. One in five U.S. companies has had employee email subpoenaed in the course of a lawsuit or regulatory investigation and another 13% have fought workplace lawsuits triggered by employee email. Companies struggle to ensure that their databases and electronic systems remain free from attack by harmful viruses and that sensitive or proprietary information remains secure. In the current economic situation, electronic monitoring is an economic necessity.

Your Company Should Review And Update Its Electronic Monitoring Policy Now

If your company does not have an electronic communications and monitoring policy, now is the time to initiate one. If you have one, there is no better time to make sure it is updated and that your management team is trained to enforce it consistently. Electronic communications have become the preferred, if not the primary, mode for communication by individuals and companies throughout this country and around the globe. New and changing forms of electronic communications, or “Social Media” are constantly emerging. Not only do employees have access to email and the Internet at work, they have instant messaging, texting, “tweeting,” blogging and a host of other methods for staying in touch. Electronic information can be accessed and stored on company computers, voice mail, person digital assistants and on mobile telephones. Employees may even be able to videotape and record conversations and take photographs with their mobile telephones. The advent of all of this technology presents employers with an array of legal and technological challenges never before encountered.

According to the 2007 Electronic Monitoring & Surveillance Survey conducted by the American Management Association and the ePolicy Institute:

  • Almost half of companies monitor email;
  • 28% of employers have fired employees for email misuse;
  • Almost one-third of bosses have fired workers for Internet misuse;
  • Two-thirds of employers monitor Internet connections and use software to block connections to inappropriate websites; and
  • More than 80% of employers notify their employees of monitoring.

A well-drafted and consistently enforced electronic communications and monitoring policy will enable companies to: manage liability issues and security risks; ensure compliance with legislation; protect client interests; increase productivity; and better supervise their performance evaluation and feedback mechanism. It should limit the company’s exposure to burdensome and costly litigation in a manner that does not violate Federal or state legislation or the employees’ privacy rights. The FTC agrees and suggests that if an employer has instituted policies and practices concerning “social media participation” by its employees, the company may provide some protection against FTC actions based on an employee’s deceptive acts when that employee fails to comply with those policies and practices.

Most employees receive policies on the use of office business tools and privacy issues on the first day of their employment, and never look at them again. Here are some tips for best practices that employers can and should follow when it comes to formulating and implementing an electronic communication and monitoring policy.

  • Note that the company owns its electronic information and communications systems and that there is no individual right to privacy in connection with the use of those systems.
  • Describe the extent to which employees may use the systems for personal use, if at all.
  • Indicate what types of electronic communications are clearly prohibited by the company.
  • Explain why the company may conduct monitoring, what systems and type of communications will be subject to electronic monitoring.
  • Make sure employees have reviewed and consented to the policy.
  • Emphasize that electronic communications are no different from paper correspondence on the company’s letterhead, and should be treated with the same level of professionalism.
  • Clearly state that the policy will be even-handedly enforced and what actions will be taken against employees who violate the policy.
  • Incorporate the electronic communications and monitoring policy in your employee handbook and conduct annual training of managers as well as rank and file employees. You cannot trust employees on their own to access the company intranet system or retrieve a copy of the employee handbook to educate themselves on this policy.
  • Create additional “Social Media” policies to prevent employees from making improper or misleading comments about the employer’s products or services and to inform employees:
    • Whether the employer permits employees to blog about the employer’s products/services;
    • If employees are permitted to blog about the employer’s products/ services, that the statements must be vetted by management and employees must clearly and conspicuously disclose their relationship with the employer;
    • That employees should further disclose that they are not authorized to make statements on behalf of the employer; and
    • That employees’ use of Social Media will also be appropriately monitored.