New Legal Wrinkle Developing With Social Media

As if employers don’t have enough to worry about, businesses are now being cautioned that employees who make exaggerated claims about their company could put the company at risk for violating the FTC’s guidelines for endorsements and testimonials in advertising.

In the past, businesses have scrambled to address customers who ranted against them, chronicling bad service and poor quality products. Defensive posturing has also been necessary when employees have tarnished the company brand (remember the Dominoes fiasco?). Businesses have also had to deal with productivity issues associated with employees who spend their working hours on social media sites. But the latest caution will catch many businesses by surprise  it’s a bad thing for employees to say good things about the company?

Well, yes, sometimes. The Federal Trade Commission (FTC) has issued updated guidelines to protect consumers from deceptive endorsements and advertising. And those guidelines clarify that employees who make remarks about their company’s products or services via social media (blogs, Facebook, Twitter) can set their employer up for legal trouble, even if the company hasn’t authorized the comments.

If you’re concerned about whether your company may be at risk, contact a human resources professional or attorney to establish a social media policy for your company.


About Smart Companies Thinking Bigger®

Kelly Scanlon is the owner and publisher of Thinking Bigger Business Media. She recently finished a term on the national board of directors of the National Association of Women Business Owners, and was the national chair from 2010-2011. An advocate for small business owners, Kelly sits on numerous boards and committees to advocate on behalf of small business owners. She has won several awards for her advocacy. Among them are the 2011 United Nations NGO Positive Peace Award on behalf of Kansas City area small business owners, the U.S. Small Business Administration's Region VII Women's Business Champion of the Year in 2009, and the Women in Business Advocate of the Year from the State of Kansas in 2006. In 2002, she won the SBA's Region VII Small Business Journalist of the Year Award (Missouri, Iowa, Nebraska, Kansas). Whatever your business stage—aspiring, startup, established, mature—Thinking Bigger Business Media has the resources you need to grow to the next level. We are a resource organization dedicated to providing the strategic, "how-to" information small business owners need to become more productive and more profitable. We also provide information that helps owners connect with resources within the business community that can help them grow. We deliver that information through a variety of media products and other channels easily accessible to business owners.
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