Social Media: Tool or Liability

The business litigation and commercial law firm, Rutter, Hobbs & Davidoff, Inc., addresses workplace legal issues in its recent newsletter, Legal Update.

As Frank E. Melton and Wendy E. Lane note, a rapidly growing number of companies are using social media and blogs for their own sites, to encourage employees to promote their company and improve business relationships, recruit and research possible new hires, and even investigate claims, whether from in-house or customers.

But with all of that comes the increased potential to land in legal hot water.

Workers can defame or libel co-workers or others, postings can hurt people and businesses, trade secrets can be leaked out, and so on. As for 2009, the Federal Trade Commission issued a guideline (16 CFR Part 255, “Guides Concerning the Use of Endorsements and Testimonials in Advertising) forbidding employees from endorsing their company’s services or products online without making clear that they work for that company, and it doesn’t matter to the FTC if the company wasn’t aware of what the worker was doing.

Fines for violating the rule run up to $11,000—per post.

And if you’re an independent blogger working out of your home and think this doesn’t apply to you, think again. Naturally, in the world of business, any new regulation is seen by someone somewhere as a business opportunity. A website called Cmp.Ly (“comply”, get it?) has a set of disclosures and codes to help you navigate these new waters.

If you don’t want to go that route, there are some steps you can take on your own to protect yourself, your company and your employees.

If you’re in the business of reviewing products, and they happen to be sold on Amazon, you can become a member of its affiliate program. When you write about the product, insert the affiliate code as a link. This identifies you as connected to Amazon, plus you’ll earn up to 15 percent in commission for each sale that originates from your site.

Another option is to just write up some boilerplate disclosure copy and have it appear at the bottom of each of your pages. These disclosures can reveal anything: that you have or haven’t been paid by the company for the review, that you received the reviewed product for free and without asking for it, that you requested the product in order to write the review, or that you, in fact, work for the very company you’re writing about.

There’s a lot more ground to cover, inspired by the Rutter, Hobbs & Davidoff newsletter, so look for future posts.

Oh, and to be upfront: I am not a member of any affiliate program, have not been paid by any law firms (ever … for anything) but if you want to send me free stuff, I’m open to discussion.