Published in New England
In-House
Corporate tweeters or bloggers – employees who post
promotional and often entertaining commentary on behalf of their
employers’ businesses – add much of their own personal
brand – their voice, their opinions, their snarky remarks
– to the information they are disseminating on the
company’s behalf. Often, the more personal their posts, the
more followers they attract and the more the company stands to
benefit. Ironicaly, therein lies the crux of an emerging concern
among corporate counsel. Who do these on-line accounts and
relationships belong to?
In this technological age where corporate leaders strategize on how
to seize upon the influence of social media, employers hire
employees and directly dictate that part of their job duties
include using social media sites to promote the company or
indirectly encourage all employees to make connections and build
relationships with others through on-line means. This may be
accomplished either with use of company accounts or by employees on
their personal accounts. Companies invest a significant amount of
time and money to build their corporate brand or position in a
particular market. Much of the value of these on-line accounts
comes from the many customers, prospective customers, and potential
referral sources developed as Twitter followers, LinkedIn or Blog
connections, and Facebook fans.
When an employee, who may have amassed a number of social media
followers or connections while employed and at the expense of their
employer, ultimately leaves the company, do you know the answer to
the key question that now arises: who owns the social media account
or page and the important connections that were developed during
the employment relationship? Recent cases provide some insight into
the issues raised in this new legal arena and offer guidance to
businesses.
Litigation Over Ownership
In PhoneDog v. Kravitz, No. C 11-03474, a federal court case in
California, PhoneDog brought an action against Noah Kravitz, a
former employee, alleging wrongful use of a Twitter account that
PhoneDog claimed to own and to contain trade secrets. PhoneDog uses
social media in marketing its services, including Twitter,
Facebook, and YouTube. Kravitz began employment with PhoneDog in
April 2006 as a product reviewer and video blogger. As part of his
job, Kravitz distributed written and video content on the Twitter
account “@PhoneDog_Noah.”
He was paid to maintain the Twitter account, which had about 17,000
Twitter follows. When Kravitz ended his employment, PhoneDog
alleges it asked for the transfer of the Twitter account, but
Kravitz changed the account handle to “@noahkravitz”
and continued to use the account.
PhoneDog brought suit, claiming, among other things, ownership of
the account and misappropriation of trade secrets. It alleged each
follower was worth $2.50 per month over the 18 months, contending
Kravitz owed PhoneDog $340,000. Kravitz denied the allegations, 1)
asserting no trade secrets because everything on the Internet is in
the public domain and that without an agreement prohibiting him
from taking the account, he was free to do so and to change the
Twitter handle, and 2) that Twitter and its licensors own the
account, not PhoneDog. The case reportedly settled outside of court
at the end of 2012, with no details disclosed.
In a different case in federal court in Pennsylvania, Eagle v.
Morgan, No. C 11-4303, Linda Eagle, Ph.D., sued Edcomm, Inc., a
company she helped cofound and of which she was an employee, over a
LinkedIn account. While employed, Eagle invested much of her time
and effort developing a reputation in the banking training industry
by speaking at conferences, publishing, and creating relationships
with banking and finance leaders. She also established an
individual account on LinkedIn, where she had a profile, including
sections for disclosing associations, honors, and awards. Eagle
used her account to promote Edcomm’s services, to foster her
reputation, to connect with family and friends, and to build
relationships in the industry. Another employee of Edcomm was paid
to help Eagle maintain the LinkedIn account and had access to the
password.
After Eagle was terminated involuntarily, Edcomm gained access to
the LinkedIn account and changed the password. Edcomm replaced
portions of Eagle’s profile on the LinkedIn account with the
profile of the new Interim CEO. Those seeking Eagle on LinkedIn
were brought to the modified CEO’s LinkedIn page, which still
showed Eagle’s awards, honors, and connections. Eagle brought
suit to gain return of her LinkedIn account and damages. Edcomm
countersued, claiming Eagle’s LinkedIn account was used for
Edcomm business and Edcomm personnel developed and maintained all
connections and much of the content on the account. The record from
the November 2012 bench trial in this case remains under seal. No
final decision has been entered.
In a Chicago federal court action, Jill Maremont, a residential
interior designer, sued her employer Susan Fredman Design Group,
Ltd., ND Ill. 10-cv-07811. Maremont claimed she had built a popular
following on her personal Facebook and Twitter accounts and had
created a Blog hosted by the company. Maremont alleged the company
knew her personal passwords and used them to post on her accounts
while she was in the hospital due to a car accident, thereby
unlawfully impersonating her without permission for commercial
reasons. The case is pending.
More recently, one that reportedly did not end up in court, an
assistant managing editor of The New York Times, Jim Roberts, had
some 75,000 Twitter followers under the handle “@nytjim. “ When he
left the paper under a buyout offer, he changed his handle to “@nycjim.” There
apparently was no policy or agreement relating to ownership of such
social media accounts and no legal action has been reported.
Lessons Learned
These cases and others have quickly caught the attention of
in-house counsel. Companies generally have policies dealing with
confidentiality and trade secrets and the appropriate use of social
media. Employers should also implement policies and proactively
develop agreements specifically relating to the ownership of
company social media accounts. Taking such steps before a dispute
arises is sound risk management.
It is in the interests of both companies and employees to address
the issue of ownership at the commencement of the employment
relationship. For example, employers who have employees maintain
company accounts such as Twitter and Facebook as part of their job
duties should consider written agreements that identify the
accounts as company property. The agreements should clearly spell
out the company’s ownership and acknowledge that the accounts
are being used by the employees as part of their job duties and
that if the employees leave, the accounts stay with the company
—and all of their fans and followers with them. Companies may
also consider including a statement of ownership in offer letters
and as part of job descriptions for such social media job duty
positions.
Employers should review their handbooks and policies to determine
if they need to be revised. To confirm consistency, general social
media policies and company property policies within employment
handbooks should clearly communicate the company’s ownership
of any company social media accounts. Policies should also state
that passwords for any company social media accounts or sites are
to be maintained by the company. Training as to these policies is
also recommended.
A more difficult issue raised by these types of cases involves
ownership over an employee’s individual accounts such as
LinkedIn accounts when used for business. In these circumstances,
the line between personal and professional blurs, which ironically,
is why many argue that these social sites are so successful.
In-house counsel may consider modified agreements on the use of
such accounts. Courts continue to grapple with evolving technology,
and it is unclear how courts will handle this circumstance. In this
age of the Internet, courts are likely to impose a higher burden on
employees to prove what information on social networking sites is
considered confidential, or may contain trade secrets.
Another murky area is where employees may have built an on-line
following or industry reputation prior to joining a company.
Employees who have accounts and connections of their own may seek
to protect their ownership upon hire. Corporate counsel are likely
to find more employees negotiating to exclude from any agreement on
ownership their personal social media accounts and followers.
Social media remains a developing area of the law, and one area in
which we can expect a lot more litigation. The return on investment
in social media efforts is initially slow, but gains value over
time. Over the next few years, we can expect to see a lot more of
these cases being tried. Companies should be proactive in
protecting their on-line accounts and connections before there is a
problem. Corporate counsel can be prepared by reviewing policies
and developing agreements that clearly detail what happens to such
on-line accounts when employees leave.
Jennifer L. Parent is a director in the Litigation
Department and Chair of the Employment Law Practice Group of
McLane, Graf, Raulerson & Middleton, P.A. She is a member of
the New Hampshire Bar Association, Massachusetts Bar Association,
U.S. District Court for the District of New Hampshire, and First
Circuit Court of Appeals.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.