Social Media in the Workplace
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Presented at the 2021 Boise Employment Seminar by Kelsie A. Kirkham
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Social Media in the Workplace
- 1. Ninth Annual Boise Employment Law Seminar S E P T E M B E R 2 2 , 2 0 2 1 | B O I S E C E N T R E E A S T | B O I S E , I D A H O par s ons behle.c om B O I S E | I D A H O FA L L S | L E H I | R E N O | S A LT L A K E C I T Y Social Media in the Workplace Kelsie A. Kirkham 208.528.5234 | kkirkham@parsonsbehle.com
- 2. 2 Social Media Internet or mobile-based websites, applications, and services that allow end-user interaction. While traditional media provide for one-way communication, social media enable bidirectional and multidirectional communications between and among users. • Sites and applications dedicated to user interactivity, for example, social networking sites. • Social or interactive features of otherwise traditional sites, for example, a blog that invites user comments on an otherwise static website.
- 3. 3 Trends and Evolving Issues • Social media and internet policies • Social media and the National Labor Relations Act • Company use of social media platforms • Employee use of social media platforms
- 4. 4 How Companies Use Social Media • Boosting brand awareness: ◦ Endorsements ◦ Branded pages ◦ Promotions ◦ User-generated content • Enriching investor relations: ◦ Earnings calls ◦ Shareholder meetings • Interactive customer support • Employee engagement • Hiring and recruitment: ◦ Posting job openings ◦ Screening candidates
- 5. 5 Advantages of Social Media • Inexpensive • Informal • Real time • Easily customizable • Personalized interaction with consumers • Larger audience reached
- 6. 6 Risks Associated with Social Media Use • Character limitations and informal language ◦ Misleading advertisements ◦ Material misstatements or omissions ◦ Deceptive advertising • Posting content owned or controlled by someone other than the Company may violate intellectual property rights or a site's terms of use • Collection and use of certain consumer information through interactions on social media could violate privacy laws • Disclosure of confidential or proprietary information
- 7. Company Use of Social Media
- 8. 8 Representing Company on Social Media • Designate authorized social media publishers • Employees authorized to represent the Company on its social media accounts or in a social media environment as part of their job, should be required to nonetheless seek approval from a manager or other designated personnel before posting. • Any and all requests for comment about the Company for publication, including in any social media outlet, should be directed to designated authorized social media publishers and should not respond without approval.
- 9. 9 Add Value & Be Respectful Consider the value of the contribution before posting. Does the post: • Assist others in the community (i.e., customers or colleagues)? • Solve a problem? • Enhance the sense of community surrounding the Company? • Improve the image of the Company and its products/services? Be respectful of all others in the online community. Engaging in arguments and inflammatory debates can tarnish the Company’s credibility: • Do not disparage a competitor beyond stating facts to make your point • Be respectful and factual when disagreeing with online commentators
- 10. 10 Respond to Your Mistakes Quickly Credibility of the publisher, and that of the Company, is judged by accuracy and willingness to recognize and fix mistakes: • If something is posted in error, respond quickly to correct it • If a prior online post requires modification, be upfront about doing so
- 11. 11 Comply with Company Policies Do NOT use social media to: • Disclose Company’s confidential or proprietary information • Harass or discriminate against fellow employees • Defame or disparage the Company or its employees • Create false or misleading endorsements, for example by: ◦ Claiming to be someone other than yourself to create buzz around the Company or its products/services/inventory ◦ Failing to identify as a Company employee
- 12. 12 Protect Customers, Suppliers, Business Associates, and Investors Do not cite or refer to the Company’s customers, vendors, business associates, or investors, or: • Identify them by name • Reveal any confidential information related to them • Discuss or conduct business with a customer, supplier, business associate, or investor in an online forum • For example: ◦ "Thanks, [CLIENT NAME]! So glad the deal closed! ◦ "Glad to have my weekends back! #[CLIENTNAME]
- 13. 13 Do Not Disclose Confidential Information or Trade Secrets • Be thoughtful about what you post • Inadvertently posting confidential information or trade secrets may cause the Company, or its clients to lose valuable trade secret protection • Examples of confidential information include: • Sales information • Customer names lists • Financials • Business or marketing plans • Performance or prospects • Acquisitions and divestitures Do not comment in any way on rumors about these topics. If asked directly, state "no comment."
- 14. 14 All Social Media Accounts Created or Used on Behalf of the Company Belong to the Company • Any social media accounts created or used by employees or contractors on behalf of the Company belong solely to the Company. This includes: ◦ Log-in information ◦ Passwords ◦ Content associated with each account, including followers and contacts • Designated Company personnel should be notified if it is suspected that: ◦ A third party has infringed on the Company’s intellectual property rights. ◦ The Company’s confidential information or trade secrets have been disclosed.
- 15. 15 Speaking For or About Company Employees speaking as representatives of the Company on social media are liable for material misstatements or omissions, even if purporting to speak in their individual capacities. Statements made by the CEO or other high-ranking executives can be viewed as carrying the same weight as official statements of the Company.
- 16. 16 Do Not Disclose Nonpublic Information Never disclose nonpublic information on social media, either on personal accounts or on behalf of the Company, unless there is written approval from an authorized personnel Nonpublic information is information that has not yet been widely disseminated to the public or has but the public has not yet had time to absorb the information.
- 17. 17 Use Full Context in Posts and Tweets • Use full context in social media posts to avoid violations of the Exchange Act antifraud and insider trading rules: o Include a link to forward-looking statements disclaimers, risk-factors, and full earnings releases in relevant tweets and posts o Be balanced and tell the full story. Do not only tweet or post snippets of positive information •Maximize the reach of tweets and posts by reposting on Company’s website; pushing to an RSS feed; or redistributing to financial portals (Bloomberg, Google Finance, and Yahoo! Finance).
- 18. 18 Liking and Retweeting: Unintentional Attribution The Company can be held liable under securities laws for false or misleading third-party content that it links to if the Company gives the appearance of having: • Been involved in the preparation of the information. • Explicitly or implicitly endorsed or approved the information. For example by: ◦ Liking to content on Facebook. ◦ Retweeting a post on Twitter.
- 19. 19 Best Practices • Limit the number of individuals authorized to speak on behalf the Company on social media. • Keep a record of social media disclosures. • Closely monitor social media channels. • Use full context. If social media's space limitations make this difficult, use social media channels to link to the full context the Company's website. • Be wary of "liking" and "retweeting." • Use disclaimers.
- 20. Employee Social Media Use
- 21. 21 Personal Use of Social Media at Work • If your Company authorizes occasional use of social media for personal activities at the office during non-working time, personal social media use on Company computers and networks must not: ◦ Involve obscene, threatening, intimidating, or harassing content. ◦ Violate any other Company policies or employee obligations. ◦ Interfere with your employment responsibilities or productivity. • Company should prohibit circulating or posting the following materials on social media using Company computers or networks during working time: ◦ Commercial, personal, religious, or political solicitations. ◦ Chain letters or spam. ◦ Promotion of outside organizations unrelated to company business.
- 22. 22 No Expectation of Privacy • All contents of Company IT resources and communications systems are the property of Company. Employees should have no expectation of privacy when using the Company’s IT resources or communications systems, including when posting on social media. • Rule of Thumb: Do not use Company’s IT resources and communications systems for any matter that you want to keep private or confidential
- 23. 23 Speaking For or About Company When not speaking on behalf of the Company, use a disclaimer on personal social media accounts. ◦ For example, "I am an employee of [COMPANY]. My statements and opinions on this site are my own and do not necessarily represent those of [COMPANY]." Be aware that even if you are posting on a personal account, you can be held liable for material misstatements and omissions about the Company.
- 24. 24 Social Media and the NLRA • The National Labor Relations Act (NLRA) protects union employees and also protects non-union employees who are simply complaining about working conditions which is often a precursor to unionizing • Concern with prohibiting “concerted activity” • Some examples include: ◦ Two or more employees addressing their employer about improving their working conditions and pay ◦ An employee speaking to his/her employer on behalf of him/herself and one or more co- workers about improving workplace conditions ◦ Two or more employees discussing pay or other work-related issues with each other
- 25. 25 NLRA – Trader Joe’s • Employee posted on his personal Facebook and Instagram pages that customers spent too much time “browsing around” and implored customers to “come in with a sense of purpose, get what you need, and get yourselves home.” • The employee was terminated for violating the employer’s social media guidelines by not making clear that the employee was speaking on his or her own behalf as well as for failure to comply with the company’s employee handbook expectation to “treat all customers with integrity.” --- Were the employee’s social media posts protected by federal labor law?
- 26. 26 NRLA – Trader Joe’s cont’d • No. • Communications are not protected by federal labor law if they are so “disloyal, reckless, or maliciously untrue” that their intent was to disparage the employer’s product or service rather than appeal for support in a labor dispute. • Although the social media posts did not directly disparage the employer, its products, or its services, the “insults toward the employer’s customers—the life blood of a retailer’s business—were likewise disloyal.”
- 27. 27 Disparagement through Social Media Use • In another recent case, ruling that the prohibition of using social media to disparage the company or others was lawful, the NLRB recognized the employer’s “legitimate justification, outweighing the rule's potential to interfere with the exercise of [the employee’s rights], in prohibiting its employees from disparaging it or its products to its customers and the public” and “in being able to depend on the loyalty of [its] employees.” • The employer’s social media policy was detailed, and each rule included explanations and examples. The NLRB interpreted the various provisions “in context” rather than “in isolation.” • The NLRB reasoned that an “objectively reasonable employee” would not read the rules as prohibiting activity protected by federal labor law.
- 28. Advertising and Promotions: Testimonials, Endorsements, & User Generated Content
- 29. 29 Advertising Claims Federal law requires all advertising claims, in any media, to be substantiated prior to making the claim and to include clear and conspicuous disclosure of any information needed to prevent the ad from being false or misleading. • Truthful and non-deceptive • Not likely to cause substantial unavoidable injury • Evidence to substantiate the ad
- 30. 30 Substantiation of Claims An ad can be misleading if it conveys a claim (either express or implied) that the advertiser cannot support. When placing ads on social media sites, consider how consumers are likely to interpret the ad
- 31. 31 Clear and Conspicuous Disclosure If information is needed to prevent an ad from being misleading, it must be disclosed clearly and conspicuously. If disclosure is required, be sure that it is: • Located as close as possible to the claim that it modifies. • In a location where people are likely to see it (the FTC discourages the use of pop-up disclosures and hyperlinks). • Displayed in a color and font size that make it easy to read.
- 32. 32 Clear and Conspicuous Disclosure: Example The disclosures in this ad are not clear and conspicuous because they both use text that contrasts poorly with the background of the page.
- 33. 33 When is an Endorsement Considered Sponsored by Company? When an individual (such as a consumer, blogger, influencer, or celebrity) is incentivized by the Company to promote its brand, products, or services on social media. Relevant factors include: • If the speaker is compensated by the Company • If the speaker received free products from the Company (either previously or in conjunction with the social media post in question) • If an agreement exists between the speaker and the Company • If the speaker received discounts, sweepstakes entries, or other incentives from the Company • If the speaker is an employee of the Company
- 34. 34 Clear and Conspicuous Disclosure: Hashtags • Unambiguous hashtags may be used as disclosures, such as: • #ad • #sponsored • #[COMPANY]partner • #paid • #[COMPANY]employee • Ambiguous hashtags should not be used as disclosures, such as: • #spon • #collab • #ambassador • #thanks[COMPANY]
- 35. 35 Why Does it Matter? • False or misleading advertising is illegal. • The Federal Trade Commission (FTC) considers endorsements and testimonials sponsored by a company to be false advertising if: ◦ The sponsored endorsement fails to disclose a material connection to the company. ◦ A false claim is made in an endorsement or testimonial.
- 36. 36 Why Does it Matter? (cont’d) • An advertiser may be liable even if it did not authorize, approve, or use an endorsement or testimonial made on social media if made by a speaker who has a material connection to the advertiser. • For example, an advertiser asks a blogger to try its new lotion and sends the blogger free samples, but does not make any claims about the lotion's ability to cure skin conditions. However, if the blogger writes that the lotion cures eczema, the advertiser may be liable for the misleading representations made through the blogger's endorsement.
- 37. 37 Endorsements: Example • This space-constrained message requires two disclosures: • That JuliStarz is a paid endorser for Fat-away. • The amount of weight that consumers who use Fat-away can generally expect to lose in the depicted circumstances, which is much less than the 30 pounds Juli says she lost in six weeks.
- 38. 38 Best Practices • The FTC has stated that before prosecuting advertisers for statements made by endorsers, it will exercise its prosecutorial discretion and consider: ◦ Efforts made by advertisers to advise endorsers of their responsibilities. ◦ Actions taken by advertisers to monitor endorsers' online behavior. ◦ Actions taken by advertisers to remedy non-compliance by endorsers.
- 39. 39 Hypothetical 1 A public relations agency hired by video game developers asks employees to pose as ordinary consumers and post game reviews on the iTunes store, without stating that the reviews were made by employees working for the video game developer. ---- Could the public relations agency, the video game developers, or both be charged with deceptive advertising practices?
- 40. 40 Answer to Hypothetical 1 Yes. • The testimonials were made by employees acting on behalf of the video game developers. • The employees should have disclosed their connection to the public relations agency and video game developers. • The FTC could bring an enforcement action against the public relations company and potentially the video game developers as well.
- 41. 41 Contests and Sweepstakes on Social Media • The same laws that apply to contests and sweepstakes in traditional media apply online and on social media as well. • Concerns specific to contests and sweepstakes on social media: ◦ Third-party platform requirements (for example, Pinterest’s or Twitter’s terms of use and promotional rules). ◦ User-generated content that could be defamatory or violate third-party copyright laws. ◦ Disclosing that a post is a sweepstakes or contest entry.
- 42. 42 User-Generated Content • User-generated content (UGC) is content submitted or posted by consumers to a site or mobile app, such as: ◦ Pictures and videos, including those submitted as part of a contest or promotion. ◦ Website comments and reviews. • The Company may be put at risk if consumers post content to sites and social media accounts it operates if the content : ◦ Violates a third party’s copyrights (or other intellectual property rights). ◦ Includes false advertising claims. ◦ Includes defamatory statements. ◦ Violates a third party's publicity or privacy rights. ◦ Is harassing, discriminatory, or obscene.
- 43. 43 User-Generated Content: Best Practices For all contests or promotions on social media that involves UGC, work with the Legal Department to create comprehensive site terms and contest rules that: ◦ Require consumers to submit original content only. ◦ Tell consumers not to make false claims about the Company's products or those of the Company's competitors. ◦ Ensure that consent to use (and re-use) consumers' uploaded content is obtained.
- 44. 44 Hypothetical 2 A sandwich shop chain invites contestants to post videos to its social media accounts that illustrate why its sandwiches are superior to those of its competitor. ---- Could the sandwich shop be sued for content included in videos posted by the consumers?
- 45. 45 Answer to Hypothetical 2 Yes. The shop could be sued by the competitor if the videos: • Contained false or misleading claims about the competitor’s products. • Infringed on the competitor's intellectual property. The shop could be sued by individuals if the videos violated their publicity or privacy rights.
- 46. Crafting and Implementing Social Media Policies
- 47. 47 Policy Considerations • Social Media Policy should NOT: ◦ Be a blanket prohibition on discussing work on social media. ◦ Prohibit employees from posting about or discussing information regarding their pay, benefits, or working conditions. ◦ Restrict employees from being able to connect with (or “friend”) each other on social media platforms. ◦ Require that employees identify themselves by name if they mention the employer or discuss their work on social media. ◦ Be so broad as to prohibit the disclosure of any “employee information” on social media.
- 48. 48 Policy Considerations • Social media policy should provide definitions and specific examples and should not vaguely prohibit “inappropriate conduct” on social media without further explanation and guidelines regarding what constitutes inappropriate conduct. • The policy should be simple enough for a reasonable employee to understand yet detailed enough to withstand legal scrutiny. • Your social media policy should be periodically reviewed and updated, when appropriate.
- 49. 49 Things to Consider • Do you have a social media policy? • Do your current policies cover the risks of social media? • What is your company’s level of tolerance for personal use of social media at work? Do you want to communicate that to employees? • Does your company use social media for marketing and business development? Do your employees know how to do it properly? Are you aware of FTC rules? • How concerned are you about trade secrets/confidential information within the company?
- 50. 50 Thank You • Kelsie A. Kirkham 208.528.5234 kkirkham@parsonsbehle.com
Editor's Notes
- Presenter Notes: This presentation reviews [COMPANY]'s social media policy and discusses: How to represent [COMPANY] on social media. Personal social media use at work. Complying with securities and disclosure laws when representing [COMPANY] on social media. Best practices for using social media in advertising, marketing, and promotions.
- Character limitations and informal language may create: Misleading advertisements Material misstatements or omission Failure to disclose a material connection to an endorser may create deceptive advertising The informality, speed, and ease of social media communications can make compliance with these strict laws and regulations difficult, especially since most of these laws were written decades before the internet became part of everyday business. Therefore, extra caution must be taken when using social media to prevent violations.
- Presenter Notes: This section of the presentation reviews guidelines for representing [COMPANY] on social media as part of [COMPANY]'s: Strategic marketing initiatives. Public relations. Corporate communications. Shareholder relations. Recruiting programs.
- Presenter Notes: All use of social media by employees, whether for business or personal use at work, is subject to [COMPANY]'s social media policies, rules, and contractual obligations, set forth in this presentation [and accompanying guidelines/APPROPRIATE POLICIES AND AGREEMENTS].
- Avoid posting offensive content, such as: Sexual comments, racial slurs, and religious or political issues
- Presenter Notes: If a social media post would violate any of the Company’s policies in another forum, it will also violate them online. Know and Follow Company’s Code of Ethics Social media activities that relate to [COMPANY] are governed by [COMPANY]'s [CODE OF ETHICS/CODE OF BUSINESS CONDUCT]. You should also be familiar with [COMPANY]'s other policies, which work together with these social media guidelines: [Information Protection Policy]. [Sexual Harassment/Discrimination Policy].
- Presenter Notes: Disclosing or commenting on [COMPANY]'s confidential business information is strictly prohibited.
- Presenter Notes: This does not include any social media accounts or profiles that are created or used by [exclusively/primarily] for your own personal use[ or personal social media account information protected under [state/[STATE NAME]] law] (we discuss personal social media use later in this presentation). You should not create, develop, or maintain any company social media accounts without [COMPANY]'s express prior authorization. You could be subject to disciplinary action for violation of these guidelines. Violations of these guidelines – particularly in a way could subject COMPANY to liability – will be subject to discipline, up to and including termination If you are unsure if a social media post or planned action might violate these guidelines, contact [LEGAL DEPARTMENT CONTACT INFORMATION].
- Presenter Notes: For example, an employee speaking about [COMPANY]'s financial prospects or investment merits will likely be assumed to be speaking as a representative of [COMPANY]. In contrast, this might not be assumed if the employee was speaking about a personal topic.
- Presenter Notes: It can be difficult to determine what constitutes nonpublic information. Avoid discussing these topics on social media unless specifically authorized to do so: Business performance and prospects. Company’s earnings. Business plans and strategies. Corporate transactions (mergers and acquisitions, securities offerings, stock buybacks). Potential or existing litigation. Internal or government investigations. [Under the company's [Regulation FD/[TITLE]] policy, use of social media to disclose material nonpublic information or to satisfy the public disclosure requirement of Regulation FD is prohibited.] Please note that disclosure of material nonpublic information on a personal social media site, even the CEO's personal Twitter feed or Facebook account, without advance notice to investors and other important steps that the site may be used for this purpose, is unlikely to satisfy Regulation FD. Regulation FD prohibits companies and persons acting on their behalf from selectively disclosing material information to securities analysts and selected institutional investors before this information is made public through recognized channels of distribution.
- Presenter Notes: Disclosures should be kept balanced by providing full context to avoid material misrepresentations or omissions. Although it is tempting to only tweet highlights, the complete picture must be presented.
- To avoid unintentional attribution for third-party content, when liking or retweeting a post by another person or company: Use a disclaimer. Explicitly state that the content is not the Company's and is in no way endorsed or approved. Carefully review all hyperlinks and the materials they link to. Remember the importance of full context and balance: do not link only to positive content. [Include language explaining why [COMPANY] is providing the link.] [Use pop-up or exit pages to add disclaimers and make clear that the user is leaving [COMPANY]'s social media environment.]
- Presenter Notes: [COMPANY] does not prohibit social media use that is protected or required by law[, as discussed later in this presentation].
- The Company may monitor, intercept, and review employee social media activity conducted using the company's IT resources and communications systems, including social media posts and activities.
- Presenter Notes: Statements made on personal social media accounts by high-ranking executives (for example the CEO or CFO) about [COMPANY] may be attributed to [COMPANY] even if a disclaimer is used.
- From the NLRB website: “The law also protects employees’ rights to act together, with or without a union, to improve working terms and conditions, including wages and benefits. These are known as protected concerted activities.”
- In April 2020—when the economy was still largely shut down due to the COVID-19 pandemic—a Trader Joe’s employee used social media to criticize customer behavior. The employee was terminated for violating the employer’s social media guidelines by not making clear that the employee was speaking on his or her own behalf as well as for failure to comply with the company’s employee handbook expectation to “treat all customers with integrity.” Applying this standard, the Division of Advice reasoned that although the social media posts did not directly disparage the employer, its products, or its services, the “insults toward the employer’s customers—the life blood of a retailer’s business—were likewise disloyal.” In addition to disparaging the employer’s customers, the Division of Advice concluded that the postings had no nexus to a labor dispute, even though the posts related to health and safety at work. The social media posts were therefore not protected by federal labor law.
- Applying this standard, the Division of Advice reasoned that although the social media posts did not directly disparage the employer, its products, or its services, the “insults toward the employer’s customers—the life blood of a retailer’s business—were likewise disloyal.” In addition to disparaging the employer’s customers, the Division of Advice concluded that the postings had no nexus to a labor dispute, even though the posts related to health and safety at work. The social media posts were therefore not protected by federal labor law.
- In another recent case, the NLRB held lawful many provisions of an employer’s lengthy social media policy banning “inappropriate communications, even if made on your own time using your own resources.” The following prohibitions under the employer’s social media policy were found to be lawful: Disclosure of “confidential or proprietary information regarding the company or your coworkers;” Use of “company logos, trademarks, or other symbols in social media,” and use of “the company name to endorse, promote, denigrate or otherwise comment on any product, opinion, cause or person;” Posting of “photos of coworkers without their express consent;” Sharing of employee compensation information on social media; and Use of “blogs, SNS (Social Networking Sites), or personal Web sites to disparage the company, its associates, customers, vendors, business practices, patients, or other employees of the company.”
- Presenter Notes: Under the Federal Trade Commission (FTC) Act: Advertising must be truthful and non-deceptive. An advertisement is deceptive if it contains a statement or omits information that is both: Likely to mislead consumers acting reasonably under the circumstances. Material (that is, likely to affect consumers' conduct or decisions regarding the product at issue). Advertisements cannot be unfair. An advertisement is unfair if: It causes or is likely to cause substantial consumer injury that a consumer could not reasonably avoid. The injury is not outweighed by the benefit to consumers. Advertisers must have evidence to back up their claims. An advertiser must have a reasonable basis for all objective product claims before making those claims. If an advertisement indicates a particular level of support for the product claim (for example, laboratory tests or scientific studies), the advertiser must possess the advertised substantiation. Federal law requires all advertising claims, in any media, to be substantiated prior to making the claim and to include clear and conspicuous disclosure of any information needed to prevent the ad from being false or misleading.
- Presenter Notes: Substantiation for ads placed in social media is no different than substantiation for ads placed in traditional media. What constitutes adequate substantiation generally depends on the following six factors, often referred to as the Pfizer factors: The type of product. The type of claim. The consumer benefit from a truthful claim. The ease of developing substantiation for the claim. The consequences of a false claim. The amount of substantiation that experts in the field believe is reasonable.
- Presenter Notes: The FTC treats statements made by individuals in social media as endorsements requiring disclosure of a material connection if, viewed objectively, it appears that the relationship between the company and the individual is of a type that the individual’s statements can be understood to be sponsored by the company. The FTC encourages advertisers to ask whether speakers are acting independently or on the advertiser's behalf in their statements about a product or service. If the speaker is acting independently, the statement is not a sponsored endorsement and no disclosure is needed. If the speaker is acting on behalf of the advertiser, the statement is a sponsored endorsement and subject to the FTC’s Endorsement Guides. The FTC has stated that the relevant facts in this determination vary and cannot be fully set out, but include: Whether the speaker is compensated by the advertiser or its agent. Whether the product or service in question was provided for free by the advertiser. The terms of any agreement. Other incentives that could make consumers question the credibility of the endorsement. The previous receipt of products or services from the same or similar advertisers, or the likelihood of future receipt of products or services. The value of the items or services received. A personal relationship with the advertiser. Employee endorsements are considered to be sponsored by the employer. Employment is a material connection. So when employees post endorsements about their employer, or their employer's brands, products, or services, whether for business or personal purposes, they must disclose their status as an employee clearly and conspicuously.
- Presenter Notes: The FTC does not prescribe what language constitutes a clear disclosure of a material connection between an individual and a company. It could be a statement or an unambiguous hashtag. The FTC provides examples of hashtags that are unambiguous and successful and those that are ambiguous and unsuccessful. A hashtag that clearly and fully discloses the relationship between the endorser and the company must still be placed prominently, in close proximity to the endorsement, and a place where consumers are likely to look. Disclosure hashtags should not be buried among other hashtags or in other copy.
- Presenter Notes: The interpretation of a material connection may be broader than expected. For example, giving a blogger a free low-value sample may trigger the disclosure requirement, especially if there is an expectation of additional free samples. Even intangible benefits such as a chance to win a prize could require disclosures.
- Presenter Notes: Although the FTC acknowledges that an advertiser may have no control over statements made by a sponsored endorser, the FTC still believes liability may be appropriate on the general basis that, by incentivizing an endorser to promote the company in social media: It is foreseeable that a sponsored endorser may make a false claim. The advertiser has assumed the risk and any potential liability that accompanies this risk.
- Presenter Notes: Even if the link in the message led directly to those disclosures on the Fat-away website, those disclosures would be inadequate if consumers could purchase Fat-away at a brick-and-mortar store or from a third-party online retailer (a retailer that is not affiliated with the advertiser). In either case, they might not click through to the Fat-away website, and therefore would not see these disclosures. Also if a claim is not typical of what consumers will experience, the advertiser needs to disclose the typical results.
- Presenter Notes: The FTC states that although the endorser has primary responsibility for disclosing the connection, advertisers should implement procedures to: Ensure that endorsers make the disclosures. Take appropriate steps if an endorser does not make the disclosure.
- Presenter Notes: Because of the large number of people who use social media daily, it is possible to reach a wider audience at a much lower cost. Additionally, because of the interactive nature of social media, people can be engaged for longer periods of time. It is risky to assume that because promotions in social media tend to be more casual than promotions in other media, they do not require the same legal attention or create the same concerns as other types of promotions. When planning to run a promotion in social media, [COMPANY] must consider: Legal requirements. Despite their more casual appearance, contests, sweepstakes, and other promotions run through social media are subject to the same laws that apply to promotions in other platforms. Third-party platform requirements. If a promotion is run on a third-party platform, the platform may have additional requirements that apply. The most popular platforms used for these promotions, such as Facebook and Twitter, have internal requirements. Consumer involvement. Consumer involvement often presents the most challenging aspect of using social media for promotions, especially when promotions involve user-generated content or consumer involvement in selecting winners. While permitting more consumer input promotes increased engagement, too much consumer engagement can create problems for the company running the promotion.
- Presenter Notes: To avoid or reduce the risk of liability for user-generated content, [COMPANY] must clearly disclose what consumers can and cannot submit. When planning a promotion, time should be taken before launch to think about problems it is likely to encounter and to proactively guard against them. For example, if accepting submissions from entrants, it must be made clear to consumers that they have to submit original content that does not violate any third party's copyrights. If a promotion invites consumers to talk about [[COMPANY]'s products/services], steps should be taken to ensure that entrants do not make false claims about [COMPANY]'s or a competitor's [products/services]. The Digital Millennium Copyright Act and Communications Decency Act provide limited protections against liability for problematic content posted by rogue consumers. However, if [COMPANY] invites these problems, pointing the finger at those consumers is insufficient to avoid liability. When planning a promotion that involves user-generated content, [COMPANY] should: Carefully consider what consumers are being asked to submit. Warn consumers against submitting various types of problematic content. Set up a process to comply with the safe harbor requirements under applicable laws. Most importantly, while it may be able to escape liability for problematic content posted by consumers, [COMPANY] cannot escape liability for any user-generated content that it uses.
- Presenter Notes: Section 230 of the Communications Decency Act of 1996 (CDA) and the Digital Millennium Copyright Act (DMCA) provide immunity for website operators from UGC claims for: Defamation, obscenity, and certain other torts. Copyright infringement. These laws do not provide safe harbors for: Trademark infringement. Violations of publicity or privacy rights. There is also likely no protection for false or misleading advertising claims if the advertiser had a hand in encouraging them. For example, Quiznos invited consumers to make commercials showing why Quiznos sandwiches were better than Subway sandwiches. Subway sued, arguing that many of the commercials included false claims. A court held that Quiznos could be liable if it played a role in developing the problematic content and noted that a jury should decide whether the company was involved (Doctor's Assocs. v. QIP Holder, No. 3:06-cv-1710-VLB, 2010 WL 669870 (D. Conn. Feb. 19, 2010)). The case later settled.
- Though recent NLRB decisions signal a trend towards greater protection of employers’ business interests (see the above examples), employers should still exercise caution when crafting and implementing social media policies. However, prohibiting the disclosure of certain information, such as personal medical information or proprietary information and trade secrets is appropriate. However, the policy should include examples of what constitutes proprietary information or a trade secret.
- Social media and cultural norms about social media are constantly changing and evolving.