Whether in marketing, boosting employee loyalty or for employer branding: corporate influencers can make a key contribution to a company’s success. We describe the labor law and data protection pitfalls that employers need to avoid.
Fashion, travel and food bloggers with numerous followers are not the only people working as influencers. Using platforms such as TikTok, Snapchat, Instagram and Twitter, they report on their lives and how they use and rate products and services ranging from handbags and cooking equipment to hotels and restaurants. Corporate influencers or corporate ambassadors have also become an established part of corporate communications. If they provide credible and authentic coverage of diverse topics, this can have a positive impact on the reputation of companies and the motivation of their employees.
Frequently, corporate influencers consist of the company’s own employees. Therefore, an employment relationship already exists. There are two ways of enabling employees to work as brand ambassadors: Either via an employment contract or as an additional agreement which establishes a second legal relationship.
- The right to issue instructions has its limits
If work as a corporate influencer arises from the obligations of the employment contract, companies have the employer’s right of instruction pursuant to Section 106 of the Trade, Commerce and Industry Regulation Act (GewO) and Section 611 (1) of the German Civil Code (BGB). As such, the company is entitled to determine the content, place and time of employment, unless the working conditions are stipulated by a the company agreement, a collective bargaining agreement or legal regulations.
However, it pays to be careful: Corporate influencers frequently already run a successful social media account with numerous followers. They utilize their own image and the relationships that they have established personally in order to advertise. The employer’s right to issue instructions has its limits when these instructions collide with the corporate influencer’s own general personal rights. Naturally, companies have no influence on employees who maintain a fashion blog as a purely personal activity, for example. However, these blogging activities may not be carried out during working hours and may not have a detrimental effect on the employee’s work. - Work contract or freelance contract?
In practice, corporate influencers are often freelancers with work or service contracts. Section 611a (1) Sentence 3 of the German Civil Code (BGB) states that the work is not bound by the employer’s instructions if the employee is fundamentally free to organize their activity as a brand ambassador and to determine their working hours at their own discretion. The Federal Labor Court explicitly permits a second legal relationship which is not bound by labor law. However, this requires that the right to issue instructions arising from the employment contract does not apply to activities which are carried out as part of a work or service contract. This is often the case when employees are already active as influencers in their free time and have established a successful personal influencer account and then utilize this for corporate purposes. Alternatively, employers and corporate influencers can collaborate to create a new account or an independent online presence which uses the company’s name and is specifically for the company. - Observe regulations governing occupational safety and working hours
It is important to be aware that companies need to carefully define whether creating and posting photos, stories or videos represents a duty arising from the employment relationship. If a corporate influencer is employed via an employment contract, the provisions of the Working Hours Act must be observed. These provisions include the maximum daily working hours, a minimum rest period of eleven hours along with mandatory rest breaks of at least 30 minutes if employees work more than six to nine hours and 45 minutes if employees work more than nine hours. Corporate influencers are also not permitted to work on Sundays and public holidays. Violations can incur fines of up to 30,000 euros and, in the worst case, up to one year in prison. - Data protection pitfalls
Popular activities among corporate influencers include creating a fan page or conducting competitions. However, these activities are classified as personal data processing. As such, the transparency and information obligations in accordance with the General Data Protection Regulation (GDPR) and the German Federal Data Protection Act have to be observed. These obligations include a privacy policy and consent texts for the processing of user data, for example. When it comes to online marketing for a product or service provided by the company, the German Telecommunications Telemedia Data Protection Act (TTDSG) also has to be complied with. In addition, Article 12 to 14 of the GDPR and Section 25 of the TTDSG both demand that detailed information be provided about the legal basis, reconciliation of interests, the retention period for personal data and the rights of visitors to the website. Violations can incur heavy fines pursuant to Article 83 (5) of the GDPR. Affected parties may even be entitled to compensation for damages under certain circumstances. - Caution with liability!
If employees violate data protection, copyright, trademark or competition law regulations while carrying out their corporate influencer activities, Section 8 (2) of the Act against Unfair Competition (UWG), Section 99 of the Act on Copyright and Related Rights (UrhG) or Section 14 (7) of the Trade Mark Act (MarkenG) stipulate that they are not only personally liable but the employer, as well. In this case, employees may to be entitled to request time off pursuant to the rules for internal compensation. Conversely, if the corporate influencer is not employed via an employment contract but rather via a service or work contract, the company can draw on the employee’s full capacity as governed by the corresponding contractual provisions. - A service or work contract simplifies termination
If an employment relationship does not exist then the labor law requirements governing termination do not apply. No specific restrictions exist regarding a time limit or the termination of service or work contracts with influencers. - The works council has a say
The Federal Labor Court has ruled that a Facebook page maintained by the employer may also constitute a technical system suitable for monitoring employees pursuant to Section 87 (1) No. 6 of the Works Constitution Act (BetrVG).
Best practices for companies
The following regulations and arrangements have proven themselves in practice:
- Social media guidelines
To minimize liability risks, employers are advised to prepare social media guidelines which regulate the extent to which social media are utilized in the workplace. These guidelines should be implemented via employment contracts or a company agreement. The right of instruction permits these guidelines to be defined unilaterally for all employees. This also enables the obligations of corporate influencers to be defined with regard to the protection of company and trade secrets, data protection and copyright. In the process, rules for lawful interaction with colleagues, customers and competitors can also be implemented. Furthermore, employees can be sanctioned appropriately in the event of violations. Given that these represent a code of conduct, the works council also has to be involved. - Regular training regarding legal risks
Regular training is recommended as a preventive measure in order to enable employees to identify and assess the legal risks when using social networks. This training is advisable for all employees, including corporate influencers. It is important to bear in mind that the works council has a say in the implementation of internal vocational training activities pursuant to Section 98 (1) of the Works Constitution Act (BetrVG). - Avoid pseudo self-employment
Where influencer activities are performed as part of a separate service or work contract alongside the employment contract, the corporate influencer’s online activities often cannot be clearly separated from the activities carried out as instructed by and on behalf of the company. This can give rise to the suspicion of pseudo self-employment. In view of this, companies need to make absolutely certain that any influencer activities are not bound by the right of instruction arising from an employment contract. If the activities are not clearly distinguished from those demanded by the employment contract, employers can reckon with demands for back payments from social security institutions. These companies may even be liable to prosecution pursuant to Section 266a of the German Criminal Code (StGB). - Set up a business account
A purely business account, which is clearly separated from any personal use, is recommended for online marketing and other corporate influencer activities. This also serves to avoid the aforementioned difficulties with separating the general personal rights of employees which arise with influencer activities. - Corporate influencers required to publish a legal notice
Corporate influencers are also obliged to publish a legal notice, similar to that of the company’s online presence. The best practice recommendation consists of including the company’s own legal notice in the online profile of employees who serve as brand ambassadors. Violation may incur fines of up to 50,000 euros.
In particular, major companies draw on employees to serve as brand ambassadors. These companies benefit from greater employee loyalty, employer branding and a stronger brand itself as well as in the marketing for new products aimed at younger target groups. Ensuring lasting success requires clear guidelines which minimize the legal risks. Avoiding pseudo self-employment and clearly separating the duties arising from the employment contract from corporate influencer activities are key issues.
