Employers May Be Liable For Employees’ On-Line Activities

The Federal Trade Commission recently enacted new guidelines for employers, which opens the door for employer liability for the online comments and/or activities of employees. The FTC’s “Guides Concerning the Use of Endorsements and Testimonials in Advertising” subjects employers to potential liability for employees’ use of social media sites to post comments about company products and services, even if the employer did not authorize and/or direct the employee to post such comments.

What does this mean? Employers could face enforcement proceedings and potential consumer fraud claims for comments posted about company products or services on blogs, LinkedIn, Twitter, MySpace and Facebook  even during non-working hours. For example, your company sells “widgets” and one of your employees submits an online post about the widget’s uses and benefits without revealing he/she is an employee of the company, whereby enticing another individual to purchase the product or service in reliance upon the comment. The company may be liable if another individual can establish he/she was enticed to purchase the product and the product was defective or did not perform as “advertised” by the company’s employee.

Employers are urged to update or create a social networking policy to address these recent guidelines.