Disciplinary Procedures of the Word of Mouth Marketing Association

PROCEDURES FOR REVIEWING ETHICAL COMPLAINTS AND CONDUCTING DISCIPLINARY PROCEEDINGS OF THE WORD OF MOUTH MARKETING ASSOCIATION

The Word of Mouth Marketing Association (“WOMMA”) believes that every participant in word of mouth marketing has a vested interest in preserving its integrity. WOMMA is committed to developing, communicating and promoting best practices in the ethical conduct of word of mouth marketing throughout the industry.

CONDITIONS FOR WOMMA MEMBERSHIP, EXPECTATIONS FOR WOMMA MEMBERS AND GUIDING PRINCIPLES

WOMMA expects its members (and those companies applying for membership) to set an example of high ethical standards for word of mouth marketing as well as regulatory and legal compliance. Accordingly, as a condition of membership, WOMMA members shall adhere to the WOMMA Ethics Code of Conduct, WOMMA’s Bylaws, regulations and guides promulgated by the Federal Trade Commission , Food and Drug Administration, or any other state or federal agency that promulgates rules, regulations and guides impacting advertising and marketing practices, and all other WOMMA policies, rules or regulations.

Members of WOMMA are to serve the goals of advancing the word of mouth marketing industry, including all commercial platforms that are designed to advance the advertising of products and services, and promoting the integrity of ethical word of mouth as a meaningful vehicle for commercial activity. As a result, WOMMA members have a duty to report to the COO any conduct by another WOMMA member that the member believes violates the WOMMA Code of Ethics and Standards of Conduct. Such reporting shall be in compliance with the procedures set forth below.

Infractions of WOMMA’s Ethics Code of Conduct, WOMMA’s Bylaws, law or governmental regulations, or any of WOMMA’s policies, rules or regulations constitutes misconduct for which WOMMA may take appropriate disciplinary action (as described below).

Therefore, any WOMMA member that engages in conduct or an activity, either directly or through its agents, consultants or affiliates, that violates WOMMA’s Ethics Code of Conduct, WOMMA’s Bylaws, laws or governmental regulations or guides concerning advertising or marketing, or any of WOMMA’s policies, rules or regulations, may be subject to discipline in accordance with this policy.

THE MEMBERSHIP ETHICS ADVISORY PANEL

WOMMA has designated the Membership Ethics Advisory Panel (“MEAP”) as the body to evaluate charges or complaints of misconduct by members of WOMMA. A WOMMA Board member shall be appointed to serve in an advisory, non-voting capacity to the MEAP, who shall be invited to attend all meetings of the MEAP.

PROCEDURES GOVERNING DISCIPLINARY PROCEEDINGS

The following procedures shall govern any disciplinary proceeding conducted to consider such alleged violations.

1. The Complaint and Initiation of Proceedings
   1. Complaints against members may only be submitted by members in good standing and must be submitted within a reasonable period of time after the occurrence of the alleged act. Complaints shall be submitted in writing to WOMMA’s COO and signed by the complaining party. Complaints must include the following:
      1. an authorization by the complainant(s) to forward the complaint to the involved member and/or any third parties the MEAP deems relevant;
      2. a description of the alleged violation;
      3. specific references to the activities or conduct supporting the complaint;
      4. the identification of any relationship between the complainant and the party that is the subject of the complaint (e.g., the complainant is a competitor of the party that is the subject of the complaint; the author of the complaint is a former employee of the party that is the subject of the complaint).
         
         All evidence that is provided to support the allegations must be in the public domain, or specific information must be provided as to how the information was obtained. If this specific information is not provided, the evidence will not be accepted and the complainant will be so notified. It is in the COO’s sole discretion to determine whether the Complaint is formally sufficient, and if it is, the COO shall forward the Complaint to the MEAP subject to the provisions below.
         1. All Complaints submitted to the MEAP shall be anonymous. The person and company submitting the complaint will not be identified as part of the complaint process. All supporting materials that are submitted as part of the complaint process will be submitted to the party that is the subject to the complaint; however, reference to the party submitting the complaint will be omitted.
         2. At times, a member of the MEAP may become aware of issues that may constitute an infractions of WOMMA’s Ethics Code of Conduct, WOMMA’s Bylaws, law or governmental regulations, or any of WOMMA’s policies, rules or regulations due to the publication of content on a web site, newspaper or other form of media. If the MEAP member brings the issue to the attention of the entire MEAP and the Chair of the MEAP decides that the potential infraction warrants review, the MEAP has the ability to initiate a formal initial inquiry by transmitting to the content publisher (or member company) a writing requesting further information on what was observed in the publication. The member company must comply with the MEAP’s request within 15 business days of its receipt of the writing from MEAP. The MEAP may also hold a teleconference or in person meeting to discuss the matter if necessary. The MEAP will review the information provided and determine if a formal complaint is needed.
         3. In order to avoid a conflict of interest, an appearance of impropriety, or undue influence, a member of the MEAP should not submit a complaint against a competitor. If there are compelling circumstances, however, that a MEAP member believes that the submission of a complaint against a competitor is warranted (a) in order to preserve the integrity of the industry and (b) to prevent substantial consumer injury, that member shall so certify (a) and (b) in the submission to the COO. Furthermore, under such circumstances, that MEAP member shall recuse him or herself from all deliberations and communications relating to the complaint; and that member shall receive no updates concerning developments of the deliberations by the MEAP in connection with the complaint. Any attempts by the MEAP member to influence the MEAP deliberations shall be brought to the attention of the entire MEAP, the COO, and WOMMA’s legal counsel.
   2. Upon receipt of a formally sufficient complaint, the COO shall refer the complaint to the Chair of the MEAP. The Chair shall then refer the matter to the MEAP, the MEAP shall determine whether the Complaint warrants a full investigation.
      1. If the MEAP determines that the complaint does not warrant a full investigation, the Chair shall so notify the COO, WOMMA’s legal counsel, or any member of the Board of Directors, and the matter shall be closed.
      2. If the MEAP determines that the complaint does warrant a full investigation, the Chair shall direct the COO to notify the affected member that a Complaint has been filed, that an investigation will be conducted, and that the affected member shall be advised of the results.
   3. The processes, deliberations, and communications in connection with the activities described in Section I. shall remain confidential and not made public.
2. Investigation and Hearing
   1. In conducting the investigation, the MEAP may obtain the assistance of WOMMA Staff and consult with WOMMA legal counsel whenever in its judgment such consultation is necessary or appropriate, subject to approval by the COO. In addition, the MEAP may contact the complaining party, the affected member, and other relevant parties to obtain additional information, as necessary. Staff is only administrative support in the process and provides no input or direction on the matters of the MEAP as part of the hearing process.
   2. The MEAP need not conduct a hearing as part of its investigation; provided, however, that no adverse action shall be taken against an affected member without having first afforded the member the opportunity for a hearing before the MEAP.
   3. If the MEAP determines that a hearing is not warranted, the Chair shall direct the COO to notify the affected member that the matter shall be closed.
   4. If the MEAP determines that a hearing is warranted, the Chair shall direct the COO to notify the affected member in writing of the time, place, and manner of the hearing, and the hearing shall be held no less than thirty (30) days after the date of such notice.
   5. During the hearing, the affected member shall have full access to the evidence against him or her, and shall have the opportunity to: (i) appear at such hearing in person, with legal counsel if desired; (ii) rebut the information produced by the MEAP; (iii) present witnesses; and (iv) submit any relevant documentary evidence.
   6. An affected member who fails to attend a hearing shall be deemed to have waived its right to appear.
   7. The MEAP may have WOMMA’s legal counsel present at any such hearing to advise on issues of procedure and, under appropriate circumstances, to present the MEAP’s position.
   8. A hearing may be postponed, recessed, or reconvened for good cause in the sole discretion of the MEAP.
   9. The processes, deliberations, and communications in connection with the activities described in Section II. shall remain confidential and not made public.
3. Recommendation
   
   Upon the conclusion of the hearing, the MEAP shall convene in closed session to determine whether the affected member has engaged in conduct for which disciplinary action should be taken.
   1. If the MEAP determines that disciplinary action should not be taken, the matter shall be closed.
   2. If the MEAP determines, by a two-thirds vote of the entire panel, that the affected member has engaged in activity in violation of WOMMA’s Ethics Code of Conduct, the law or governmental regulations or guides, WOMMA’s Bylaws, or any of WOMMA’s policies, rules or regulations, the MEAP shall recommend to the Board of Directors that disciplinary action be taken against the affected member. Such recommendation shall be in writing and shall set forth the MEAP’s findings and recommended disciplinary action.
      1. The MEAP shall consider the following factors in determining appropriate disciplinary action:
         • Whether the action was intentional;
         • Whether the member appreciates the consequences of the action;
         • The consumer injury caused by the violation;
         • Whether the member has existing, appropriate, and applicable policies and procedures to address the conduct;
         • Whether the incident was an isolated event resulting from the actions of an individual employee, or an action supported by management;
         • Whether the action reveals a pattern of inappropriate conduct; and
         • Whether the member cooperates during the process and reveals its commitment to address the problems found.
      2. The disciplinary measures which may be recommended by the MEAP may include, but are not limited to, one or more of the following forms:
         1. Notice of Corrective Action: The member will be provided with a writing that details the violation, including recommended steps to prevent a similar violation in the future. A member of the MEAP may be appointed as a mentor to such member in order to assist them in fully understanding and implementing the MEAP’s recommendations.
         2. Expulsion: The member shall lose all rights of membership in WOMMA. After a period of three (3) years, the member may reapply for membership.
   3. The affected member shall be provided with a copy of the MEAP’s recommendation to the Board of Directors, shall have the right to seek a review of the recommendation by the Board of Directors, and shall have the opportunity to submit any documents or written submissions to the Board of Directors in response to the recommendation.
   4. The processes, deliberations, and communications in connection with the activities described in Section III. shall remain confidential and not made public.
4. Board of Directors Review
   1. The affected member shall be given reasonable notice of the time, place, and manner of the meeting at which the Board of Directors will consider the recommendation by the MEAP. The affected member shall have the opportunity to address the Board to present reasons why the MEAP’s recommendation should not be accepted.
   2. The Board of Directors may have legal counsel present at any such hearing to advise on issues of procedure and represent WOMMA’s interests in the matter.
   3. Upon the conclusion of its review, the Board of Directors shall affirm, overturn, or modify the recommendation of the MEAP. The action of the Board of Directors shall be final.
   4. The Chairman shall notify the following individuals of the Board of Director’s decision: the affected member, WOMMA’s legal counsel, the Chair of the MEAP, the COO, and others as appropriate.
   5. The processes, deliberations, and communications in connection with the activities described in Section IV. shall remain confidential and not made public. However, the Board of Directors, in its sole discretion, shall determine (i) whether to make public its final findings and recommendations and (ii) if so, the format of that public communication, including the determination as to whether the identity of the affected member should be revealed.