The people who work for you are both your employees and general consumers. They have opinions about work, about you, and about your clients' products. You probably deal with any improper public criticism by your employees of your clients' products through employee discipline. But how you address an employee's public praise of a client's product is now an equally important question. If not handled properly, it can be a problem.

Case in Point: Reverb Communications

California-based Reverb Communications was busy building the reputation of its iPhone application developer clients when the firm caught the FTC's attention. Reverb's employees had posted reviews of its clients' gaming apps on iTunes, claiming that a reviewed app was "an amazing new game," "one of the best," "a great, family-friendly board game app," and that "one of the best apps just got better."

The reviewers failed to indicate their connection with the game developers, and the FTC filed a complaint against Reverb Communications and executive Tracie Snitker for deceptive advertising practices. In so doing, the FTC made Reverb its first "example" under the recently updated guidelines governing endorsements and testimonials. These guidelines expressly expand the long-standing principle of disclosing "material connections" between advertisers and endorsers – connections that consumers would not naturally expect – to include online activities and word-of-mouth marketing. The FTC explained that iTunes shoppers expect candid reviews of products and do not anticipate that a reviewer works for the product's creator. Reverb's connection to the app developers, the FTC admonished, should have been disclosed in the reviews of the products.

The case is now settling, and, under the proposed settlement agreement, Reverb must (i) remove all endorsements that fail to disclose the company's connection with a product's creator and (ii) disclose all material connections when it endorses its clients' products. Reverb is admitting no wrong-doing and is adamant in conversations with the media that the settlement is merely for convenience, a business decision.

Employees Acting Alone May Still Be "Employees"

Reverb contends that it never has had a policy of planting positive reviews for its clients. Rather, the employees in question were acting in their personal capacities by buying the apps and reviewing them as ordinary consumers. Reverb believes that what their employees do on their own time is their own business. This is not always the case though.

Bottom Line: Give Your Employees Some Guidance

If your employees are publically discussing client products beyond your expectations, there is a need for a conversation with them. Whether they recognize it or not, your employees have a vested interest in seeing your clients succeed. Favorable comments and reviews are capable of creating confusion about the motives of your employees – even the most well-meaning employees.

Give your staff some guidance about how to navigate their dual role as marketer and consumer:

  • Establish a social media policy that sets out expectations for your employees' public communications. This policy should be expansive enough to cover product reviews.
  • Explain to your employees that your social media policy extends to all communications related to their work, including those made from home or a mobile device.
  • Encourage your employees to disclose their connections to work in their communications and give them some sample language to use.

Set out expectations before problems arise. Marketers must be cautious about the messages that employees are distributing regarding clients' products and services to avoid the appearance of impropriety. Wherever appropriate, employees should transparently disclose their relationship with a client to avoid consumer misunderstanding . . . and FTC scrutiny