March - April 2004

Phone, Fax...Fines?

Before You Dial, Know the Laws That Govern Communication With Clients and Candidates

5 min

Slapping a California-based company with a hefty $5.4 million fine, the Federal Communications Commission sent a message in January to businesses throughout the nation: When you call, fax, or e-mail, abide by the rules.

There are a variety of new (and some long-standing) restrictions on the use of telephone calls, faxes, and e-mail messages, and staffing professionals need to know how these rules affect their businesses. This article focuses primarily on telephone and fax restrictions, but also highlights the federal anti-spam legislation recently passed by Congress.
Do-Not-Call Rules
As has been well publicized, the Federal Trade Commission and FCC have imposed a national do-not-call (DNC) registry on those making telephone solicitations, prohibiting them from calling consumers who have placed their numbers on the list. The list fits atop myriad state DNC laws and other lists that may become obsolete, depending on whether the FCC decides to preempt them completely.

The Telephone Consumer Protection Act and the regulations that the FCC created under that statute prohibit all "telephone solicitations" to "residential subscribers" who have placed their numbers on the DNC list. Telephone solicitation is defined as "the initiation of a telephone call or message for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services." The FTC's Telemarketing Sales Rule prohibits "outbound telephone calls" to those on the DNC list. Such calls are defined to include "a telephone call initiated by a telemarketer to induce the purchase of goods or services."

Given these definitions, which most state laws mimic, the rules do not apply to the vast majority of calls made by staffing firms because a call to staff a job is not a call to sell anything. Thus, staffing firms are not required to "scrub" their calling lists against the DNC registry when calling job candidates, including initial calls to schedule screening interviews and later calls when positions become available.

The only calls subject to the DNC list are those to sell career placement services to individuals. For example, a call to provide counseling services or to edit a résumé would be covered if the person you are calling will be paying for those services.

Calls that are exempt from the DNC list are also exempt from other rules imposed by the TCPA and TSR that require companies making telemarketing calls or outbound telephone calls to honor, for five years, requests by individuals not to be called.

Although the calls are exempt because they do not fit within the category of calls encouraging the purchase of goods or services, it is a good idea to retain a list of potential candidates who do not wish to be called. Doing so minimizes the risk of complaints and generally ensures that you are calling only those who want to be called.

Calls to businesses are exempt under both the TCPA and TSR. Thus, the DNC registry rules do not apply to any calls that your staffing company may make to enlist new clients.

Do-Not-Fax Rules
The TCPA prohibits sending faxes that contain unsolicited advertisements without the permission of the recipient (a person or a business).

The FCC currently interprets "permission" to apply to anyone with whom your staffing firm has an established business relationship. But several courts have held, contrary to the FCC's own rules, that an established business relationship is not sufficient to create express consent. And starting in January 2005, you will have to obtain the prior written consent of businesses or individuals to send any faxes that contain unsolicited advertisements.

Unsolicited advertisements are defined as any material advertising the commercial availability or quality of any property, goods, or services that is transmitted to any person without the person's prior express invitation or permission. Faxes to businesses offering your company's staffing services would clearly be covered by this definition.

Job offers that are faxed to candidates, however, may not require permission. At least one federal court has held that a fax offering a person a job is not an unsolicited advertisement. It is not clear whether the FCC would support this interpretation, but the court's reasoning appears to be sound. The court explained that advertising a job opening is not advertising the commercial availability of property, goods, or services, because a job itself is not property.

All faxes—not just those with unsolicited advertisements in them—must contain the name and number of the sender, along with the date and time the fax was sent.

E-Mail Rules
On Dec. 8, Congress passed an anti-spam statute regulating the use of e-mail. The statute, which went into effect Jan. 1, broadly preempts existing state laws, so there is now only one law—a federal law—governing unsolicited e-mail. Other state laws, such as those governing deceptive advertising, were not preempted.

The federal anti-spam law generally applies to messages "the primary purpose of which is the advertisement or promotion of a commercial product or service (including content on an Internet Web site operated for a commercial purpose)."

Like the court's decision in the fax case discussed in the previous section, an offer of a specific job to a candidate probably is not advertising a commercial product or service.

An e-mail message advertising your staffing firm's services to a potential client, however, is covered by the new anti-spam law, which stipulates that commercial electronic mail must include the physical mailing address of the sender and provide an opt-out mechanism. The opt-out mechanism must provide a person with the ability to request not to receive further commercial electronic mail and have that request honored within 10 days. In addition, the header information in the e-mail message, including the "to" and "from" addresses, cannot be false or misleading, and the subject line cannot be deceptive.

Ronald M. Jacobs, an associate at Venable LLP in Washington, DC, represents clients before a number of federal agencies, including the FTC and FCC, and counsels clients with respect to state and federal telemarketing and e-mail regulations.

This material is not intended, and should not be relied on, as legal advice.