When your employees say nice things about your company, its products or services in their blogs, posts and tweets, they may be running afoul of the Federal Trade Commission. How your company reacts when employees say not-so-nice things about the company, their bosses or even the human resources department can get you into hot water with the National Labor Relations Board.

Disciplining Employees Because of Online Comments

In past Newsletter issues (August 2010, April 2010 and November 2009), we highlighted the pros and cons of monitoring social media websites and the importance of well-drafted employment policies. Although a handful of states (including New York and Illinois) have passed laws protecting employees from disciplinary action for engaging in lawful off-duty conduct, most employers felt secure in the belief that they could discipline or even fi re an employee who said bad things about the company online. However, a recent complaint fi led by the National Labor Relations Board (the “NLRB” or “Board”) in October 2010 calls into question the ability of employers to take adverse action based on online postings. (American Medical Response of Connecticut, Inc. and International Brotherhood of Teamsters, Local 443, Case No. 34- CA-12576.)

According to the NLRB, an American Medical Response (AMR) manager asked one of his employees to write a report in response to a customer complaint about that employee’s work. The employee requested but was denied union representation, and later posted critical comments about the manager on her Facebook page. The employee’s statements attracted supportive posts from her coworkers, some of whom echoed her complaints about the manager. AMR discharged the employee approximately three weeks later.

The NLRB issued a complaint alleging that the employee’s Facebook postings constituted protected concerted activity and that AMR violated the National Labor Relations Act (NLRA) by fi ring the employee for her postings. The Board further contends that AMR’s blogging and Internet policy interfered with its employees’ statutory right to engage in concerted activity by prohibiting “employees from making disparaging, discriminatory or defamatory comments when discussing the Company or the employee’s superiors.”

The complaint must be reconciled with the Board’s position taken in a December 2009 memorandum by its General Counsel’s Division of Advice. In that memorandum the Division analyzed whether a social media policy that prohibited employees from disparaging the company’s products, management and employees violated the NLRA. Concluding it did not, the Division focused on the fact that the policy forbade a variety of activities, such as discussing confi dential company information or posting explicit sexual references on social media sites. In light of those additional restrictions and because there was no evidence that the policy was issued in response to union activity or was enforced because of it, the Division of Advice determined that a reasonable employee would understand that the policy did not prohibit activity protected by the NLRA.

Employers should watch the AMR case to see whether it refl ects a shift in the Board’s position. Meanwhile, employers may want to revisit their social media policies and consider whether they should be revised to prohibit a narrower range of communications that are not simply “disparaging” but are discriminatory or harassing; in short, the same type of comments that would be impermissible in the workplace. Before taking disciplinary action for online postings, employers must consider not only whether the employee’s comments are protected under the NLRA but also under EEO and other laws giving employees the right to oppose unlawful employment practices.

Finally, employers should keep in mind that violations of social media policies will be treated no differently than other policy violations. Recently, an arbitrator ordered the reinstatement of a reporter for Radio Free Asia who was terminated for a series of indiscreet tweets regarding the subjects of one of his stories. Washington-Baltimore Newspaper Guild, Local 32035 & Radio Free Asia (Arb. Fishgold). The reporter used Twitter to respond to complaints from the subjects of one of his stories, despite being warned against using the site in that manner by his supervisor. Finding these warnings to be unclear, the arbitrator reinstated the reporter with full back pay. This decision reminds us that while electronic communication policies refl ect employer attempts to keep pace with our rapidly evolving technology, violations of those policies are new to arbitrators, administrative agencies and courts, who may view them as employers overreaching into off-duty activities that are accepted forms of personal expression.

Monitoring Employees Who Make Online Endorsements

Although the NLRB’s October 2010 complaint puts at risk employer attempts to control negative comment in the blogosphere by employees, companies also must keep in mind that employees who say good things about their employer’s products and services on the Internet can inadvertently cause problems unless accompanied by proper disclosures and disclaimers.

The Federal Trade Commission (“FTC”) released guidelines in December 2009 (called “Guidelines Concerning the Use of Endorsements and Testimonials in Advertising”) which state that employers can be held liable for: (1) false or misleading statements an employee or paid endorser makes while posting about the company’s products and services online and (2) the failure of the employee or paid endorser to disclose his or her connection to the company when making these posts. Liability can attach even if the employer is unaware of what the employee is posting.

The FTC Guidelines are intended to protect consumers from deceptive online endorsements and advertising. Endorsements are “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.” 12 C.F.R. § 255.0 (2009). Connections between the endorser and the seller of the advertised product “that might materially affect the weight or credibility of the endorsement” must be disclosed. The Guidelines suggest that employees’ endorsements of their employers’ products or services can fall within the rules. For example, if an employee of Company X, a large diaper manufacturer, posts how much he loves X’s diapers on an online message board designated for discussions about parenthood, that employee needs to disclose that he works for the company. If he doesn’t, both he and the company could be legally liable if a consumer later claims he was misled by the advertisement. The disclosure needs to be clear to the average online reader and can be as simple as, “I work for Company X.” See Federal Trade Commission, The FTC’s Revised Endorsement Guides: What People Are Asking, http://ftc.gov/bcp/edu/pubs/business/adv/bus71.shtm.

The FTC recognizes that employers cannot police every employee’s online communication. However, an employer should make a reasonable effort to educate and train its employees about what they can and should say if they intend to discuss the company’s products or services online. Written policies should either prohibit online posts about the company altogether or require employees to clearly disclose their employment relationship when making these types of comments. Putting forth a good-faith effort to prevent the type of misleading endorsement the FTC Guidelines are designed to address should be a relatively easy task to accomplish.