The Evolving Legal Landscape of Employee Social Media Policies and FTC Regulatory Compliance

This is a guest post by Richard B. Newman -Internet Law Attorney on the importance of businesses of all sizes having written social media policies.

Employee social media policies are becoming increasingly more prevalent.

As a rule of thumb, company social media policies should always urge employees to utilize common sense and to always refrain from disclosing proprietary information.

The same holds true for large companies and small business, alike.

Every business should have a written policy
and train their employees prior to permitting
them to represent the company online.

Although there are numerous considerations when designing and implementing employee social media policies, there are some critical provisions from a regulatory and legal standpoint. There are various provisions contained in social media policies which seem to be quite common:

1. The use of common sense
2. Restrictions against making misleading representations
3. Absolute restrictions against the disclosure of confidential or proprietary information
4. Restrictions against the disclosure of material non-public information
5. Compliance with applicable laws and regulations
6. Fully identifying oneself and any material affiliation

Countless employee social media policies expressly
advise employees to use common sense and
exercise judgment when using social media,
stating that individuals are responsible for their postings.

Negative communications about the employer / business, competitors, and/or customers should be avoided. Social media policies seem to, as a general rule, to advise employees not to use social media in a false or misleading way. This includes making false or unsubstantiated statements as contemplated by the Federal Trade Commission’s 2009 Guidelines Concerning the Use of Endorsements and Testimonials.

Warn your employees not to use social media
in a deceptive, false or misleading way.

Concerns regarding the use of social media in a false or misleading way also involve “anonymous” imposters. The ease with which a person can establish a social media account and claim to be someone else is staggering, despite the fact that impersonating another through an account at a social media website typically violates the social networks’ own terms of use.

Naturally, both large and small businesses are concerned that the use of social media increases the risk of disclosing confidential or proprietary information, even unintentionally. As a result, many policies contain a provision broadly prohibiting this on behalf of the business and often specifying what confidential or proprietary information is. Some businesses add financial or other sensitive information to confidential or proprietary information.

In addition to proprietary and confidential company information of the company, the prohibition often extends to information regarding a company’s competitors, business partners, customers and employees. Other policies also may be cross-referenced in a policy covering social media and should be implemented, to the extent relevant, when  preparing a social media policy. Does another policy cover aspects of social media and could such policy be amended and updated instead of preparing a stand-alone social media policy?

Employees should never speak negatively about your company,
competitors, or customers or disclose proprietary information.

The answer will depend on the situation of the particular business. For example, many businesses have an electronic communications policy to address appropriate uses of the company’s computer system and to reduce employee expectations of privacy and a company’s risk. Often, an electronic communications policy is amended to address the use of social media.

If a company does not have an electronic communications policy, the following provisions can be included in a social media policy where the company:

• (i) expressly reserves the right to access and monitor the use of the company’s computer network, equipment and communications systems and the contents of files and communications created, stored, sent or received on the systems
• (ii) notes that the computer network, equipment and communications systems are company property and
• (iii) states that there should be no expectation of privacy in anything created, stored, sent or received through the company’s computer network, equipment, communications systems or the internet.

Court cases considering employers’ right to monitor or review material sent or received on a company computer are fact-specific and consider, among other things, the language of the policy at issue and the extent to which it has been used or enforced in the past.

An electronic communications policy also often addresses the extent of personal use of the company’s computer network, equipment, and communications systems. Many policies limit personal use or keep personal use to a minimum. Such a policy should be reasonable and enforceable and enforced consistently.

Do your employees know about an employers’ right
to monitor their online activities and email?

Regardless of which approach is taken, a policy covering social media should be drafted to be consistent and integrated with other company policies (e.g., electronic communications policy, code of ethics, code of conduct, record retention policy, privacy policy, employee handbook, insider trading policy and disclosure policy, etc.).

In addition to company policies, if company agreement provisions could be implicated (e.g., confidentiality provisions), they should be reviewed as well. If there is any inconsistency between the policy covering social media and another company policy or agreement, the one that will govern should be noted. In addition, policies often include a provision about complying with applicable law (e.g., intellectual property law).

Additionally, the FTC Guidelines require full disclosure of a material connection between an advertiser and an endorser that might materially affect the weight or credibility of the endorsement.

Employees of a company who make comments about the company
or its products or services, particularly in a positive manner,
must fully disclose that they are employees of the company.

In fact, the FTC has been enforcing violations of the Testimonial and Endorsement Guidelines with more frequency. For example, the FTC approved a final order settling charges that, among other things:

• (i) prohibits the public relations agency from misrepresenting that the user or endorser is an independent, ordinary consumer, and from making endorsement or user claims about a product or service unless they disclose any relevant connections that they have with the seller or the product or service and
• (ii) requires the public relations agency to remove any previously posted endorsements that misrepresent the authors as independent users or ordinary consumers and that fail to disclose a connection between the public relations agency and the seller of a product or service.

An experienced FTC Defense Attorney and Regulatory Compliance
Counseling Lawyer will confirm that the FTC’s well-settled
truth-in-advertising principles apply to new forms of mobile
marketing, as in the offline world, and that companies must
be able to substantiate claims made about their products.

If you are uncertain of how to interpret the recent federal and state legislation, or recent NLRB enforcement stances, contact your Internet Attorney to obtain guidance, and thoroughly review your social media policies and processes for compliance with new and developing restrictions.

………………………………………………………………………………………………………………………
Richard B. Newman is an Internet Lawyer at Hinch Newman LLP  (New York & California)
………………………………………………………………………………………………………………………

Information conveyed in this article is provided for information purposes only and does not constitute, nor should it be relied upon as legal advice. This information is not intended to substitute for obtaining legal advice from an attorney. No person should act or rely on any information in this article without seeking the advice of an attorney.

The following two tabs change content below.

• Bio
• Latest Posts

RBNInternetAtty

Latest posts by RBNInternetAtty (see all)

• FTC Landmark Privacy Report: Key Takeaways ~ What to Do. - April 27, 2012
• Communications Decency Act Publisher Immunity Not Motive-Based: Yelp Wins Extortion Case - November 3, 2011
• Internet Legislation Proposed to Address Consumer Privacy and Data Security Issues - September 12, 2011