The Federal Trade Commission (FTC) recently enacted revised guidelines related to endorsements which went into effect on December 1, 2009. While the guidelines primarily relate to media statements made by celebrities, consumers and experts, employers should pay particular attention to the concerns the FTC has expressed regarding employee blogging.

The FTC guidelines specifically require bloggers to disclose any material connections between the blogger and any product or services being described in a posting. An example the FTC provided is that a blog poster discussing an employer’s product “should clearly disclose her relationship to the manufacturer to members and readers of the message board” because knowledge of the “poster’s employment likely would affect the weight or credibility of her endorsement.” Although the FTC has indicated it will not likely enforce against the actions of “rogue employees,” its comments state that it would take into consideration “the establishment of appropriate procedures” when deciding whether to take action against any company in a particular instance. The FTC also made it clear that it “has brought law enforcement actions” against companies whose failure to establish or maintain appropriate internal procedures resulted in consumer injury.

We recommend that all employers review their social networking, blogging or electronic communications policies and related procedures to make sure that they are designed to prevent employees from making improper or misleading comments about the employer’s products or services. With respect to policies, they should, at a minimum, inform the employees:

  • Whether or not the employer permits employees to blog about the employer’s products/services;
  • That if employees are permitted to blog about the employer’s products/services (a practical approach in light of the proliferation of electronic communications), employees must clearly and conspicuously disclose their relationship with the employer; and
  • That employees should disclose that they are not authorized to make statements on behalf of the employer.

Employers should avoid encouraging untrained and unmonitored employees to blog about their company’s products and/or services. Failure to appropriately monitor blogging could have a detrimental effect on goodwill and could result in claims from regulators, competitors or consumers that the employer has engaged in unfair or deceptive trade practices. In addition, the employer may be accused of “astroturfing,” which means encouraging employees to post false, positive things about the employer’s goods or services. The FTC is not the only entity concerned with this type of behavior. In fact, earlier this year the New York Attorney General obtained a $300,000 settlement of its claim that a cosmetic surgery company asked employees to pretend to be satisfied customers in writing online testimonials. Similarly, consumers or competitors could pursue claims for unfair or deceptive trade practices or unfair competition based on improper employee posts.