Effective December 1, 2009, the FTC implemented new guidelines concerning endorsements and testimonials in advertising. Although at fi rst glance, the regulations appear to relate to statements made by consumers, experts, organizations and celebrities, employers must be mindful of the section addressing employee blogging. In a nutshell, if an employee makes a statement on a social media website such as Facebook or a blog concerning his or her employer’s products or services, the employer may ultimately be held liable for damages a consumer suffers if the consumer claims to have detrimentally relied upon that employee’s statement in purchasing the company’s products or services.  

  • An “endorsement” is defi ned as “any advertising message . . . that consumers are likely to believe refl ects the opinions, beliefs, fi ndings, or experiences of a party other than the sponsoring advertiser, even if the views expressed by that party are identical to those of the sponsoring advertiser.”
  • “Endorsers” and companies must fully disclose any connection between them “that might materially affect the weight or credibility of the endorsement.”  
  • If a blogger posts a statement about his or her employer’s product or service, the FTC has taken the position that a person “should clearly disclose her relationship to the manufacturer to members and readers of the message board,” on the theory that a consumer’s understanding of the “poster’s employment likely would affect the credibility of her endorsement.”  
  • In the absence of the disclosure of such a “material connection,” an employer could fi nd itself liable for damages suffered by a consumer who relied upon an inaccurate, inappropriate statement by one of its employees.

 Potentially, the aggrieved consumer might turn the claim into a class action. The FTC guidelines state, however, that employers who have established appropriate procedures governing employees’ endorsements on blogs and the like would be less likely to be prosecuted by the FTC in an enforcement action. The FTC has also stated that it would not likely prosecute employers for the actions of “rogue employees.” But there is no guarantee that employers would be completely insulated from liability as a result of the actions of “rogue employees” either from FTC enforcement or from consumer litigants.  

Social Media Policy Needed

Employers should consider implementing and enforcing a social media policy (and provide training to their employees with respect to the policy) that either prohibits employees from making comments on-line concerning the employer’s goods and services, or requires employees to disclose their employment relationship when publishing any such on-line commentary.