Recently issued Federal Trade Commission guidelines could impose liability on employers for false or misleading advertising stemming from employees' online postings. These guidelines would stick even when the employer didn't authorize the employee to make the misleading statements. Because blogging has become such an effective tool for companies to sell their products and services, the FTC thought it was fitting to pass the standard. Consumers are being shown to trust blog testimonials more so than other forms of traditional advertising.
Even though the guidelines are administrative interpretations of the law and not binding, advertisers could face FTC enforcement actions. If consumers are injured, the employer could face class-action lawsuits as well. However, the FTC has said it would be unlikely to taken action against a company for the actions of one employee unless bad faith conduct was involved.
The best way to avoid sanctions for businesses under this new rule would be to impose strong social media policies. More and more companies (and law firms) are becoming aware of the detrimental effects of social networking and creating these work policies. In the end, the Federal Trade Commission is looking for intent and deception. Some employers do use blogs to advertise their product and could potentially exaggerate because it isn't the company website. These guidelines look to remedy that.
For more information, visit: Business Law Today.
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