Georgia Business and Technology Litigation Blog

UPDATE: CONTESTED OWNERSHIP OF SOCIAL MEDIA ACCOUNTS BETWEEN EMPLOYERS AND EMPLOYEES

Several months ago (see post here), I discussed two cases involving disputes between employers and employees over ownership of social media accounts—a Twitter case and a LinkedIn case.

The moral of both stories appeared to be that employers and employees both benefit from having a strong social media policy that clearly indicates who owns what. On the one hand, an employee who builds a large following on her own, over years, should be able to control the Twitter or Linkedin account that she built. On the other, a sales company that requires its employees to have a Linkedin account which adheres to a company-required format, and is maintained by company staff, may have a legitimate claim to that account.

Twitter Case

Since my last post, the fight between Noah and his former employer Phone Dog over his Twitter account has settled, allowing Noah to keep his Twitter account and its many followers (after he had changed his handle from one that included “Phone Dog’s” name, to a handle solely in his name). And, a post-settlement quote by Noah himself suggests that both sides in that dispute wish they had clearly explained their expectations regarding ownership of social media accounts at the outset of their relationship.

LinkedIn Case

Since that last post, another court ruling has come down in the LinkedIn case (Eagle v. Morgan) that further demonstrates the need for employers who want to control social media to have strong, clear social media policies so that employer and employee alike know what they’re getting into. (Order linked here for those interested.) As discussed in detail in my last post, although the former employer in the Eagle case did hijack its former president’s LinkedIn account, the court ultimately yearned for a clear company policy that indicated who owned what.

For instance, while the employer had invested substantial time in having company staff maintain current LinkedIn pages for employees according to a consistent company format, there was no company policy expressly informing employees that it owned their LinkedIn accounts. While the court sympathized with the employer’s clear investment of time in maintaining employees’ LinkedIn accounts, the court also seemed to expect a company policy making clear who owned what. Although the court didn’t rule on whether such a policy could have given the employer ownership of the employee’s LinkedIn account, it did note that the LinkedIn “user agreement” would have of course factored into that analysis.

So what happened? The employee in the LinkedIn case ultimately “won” and received a whopping award of $0.00—a fitting tribute to the mess created by a lack of any clear social media policy. (As a fellow attorney, I hope that one wasn’t taken on contingency.)

Lessons

Employers:

• Before you rely upon employee social media accounts or spend a lot of time maintaining accounts for your business, consider your objectives and create a social media policy to accomplish them.

• Specifically address ownership and control of accounts. 

• Consider how each social media provider’s applicable user agreements and terms of service will affect ownership rights, and consider creating a new “company” account for each employee at the inception of his or her employment to start fresh, without any baggage. 

• Although it is a broad subject for another day and post, employers must be careful regarding social media policies to respect employee rights to discuss and even complain about their work. The National Labor Relations Board (NLRB) has very specific ideas of employee rights in this regard and is coming after employers both for policies that interfere with employee rights of dissent on social media, and for employment decisions that arise from social media use. While you may think that the NLRB only handles labor union issues and will never affect your business, think again. It has the authority to police employer social media practices and is using it.

Employees:

• To protect your rights to social media accounts that you may have created through your own effort, be sure to inquire early on about an employer’s expectations concerning your accounts.

• In the absence of any clear agreement, be wary of how using an account for both personal and company purposes could open you up to a claim that the company has some rights in the account.
  

Or—you can pay lawyers a lot of money to fight in court over this issue and you may even hit a $0.00 home run like the employee in the LinkedIn case.

LAWYERS, DON'T “FRIEND" JUDGES (or at least not the good ones)

They say that “a good lawyer knows the law and a great lawyer knows the judge.”  While there is some truth to that adage, a recent Florida case suggests that it should now say that “a great lawyer knows the judge, but doesn’t ‘friend’ him”–at least not in Florida.

Why not?  Or, as the band War so memorably sang, “why can’t we be friends?”

Though not too melodic, the answer is:  because public, social media “friendships” between a judge and lawyer can wrongly suggest that there is an extra-legal personal relationship which could affect a judge’s impartiality.

The case at issue involved a Florida trial judge who was found to be Facebook “friends” with the prosecutor in a criminal case.  Therefore, the criminal defendant moved to disqualify the trial judge, who saw no problem and denied the motion to disqualify himself from the case.  The Florida District Court of Appeal disagreed and held that Florida’s ethical rules for judges prohibit judges from publicly friending lawyers on a social media site because of the improprieties suggested by a “friendship.”

For those interested, the appellate court’s full decision can be viewed here:   Download Domville v State Opinion.  Following is an excerpt explaining the court’s reasoning:

We find an opinion of the Judicial Ethics Advisory Committee to be instructive. See Fla. JEAC Op. 2009–20 (Nov. 17, 2009).  There, the Committee concluded that the Florida Code of Judicial Conduct precludes a judge from both adding lawyers who appear before the judge as “friends” on a social networking site and allowing such lawyers to add the judge as their “friend.”  The Committee determined that a judge's listing of a lawyer as a “friend” on the judge's social networking page-“[t]o the extent that such identification is available for any other person to view”-would violate Florida Code of Judicial Conduct Canon 2B (“A judge shall not convey or permit others to convey the impression that they are in a special position to influence the judge.”).

. . . .

The issue, however, is not whether the lawyer actually is in a position to influence the judge, but instead whether the proposed conduct, the identification of the lawyer as a “friend” on the social networking site, conveys the impression that the lawyer is in a position to influence the judge.  The Committee concludes that such identification in a public forum of a lawyer who may appear before the judge does convey this impression and therefore is not permitted.

 

CAN EMPLOYERS REALLY DEMAND SOCIAL MEDIA PASSWORDS FROM APPLICANTS AND EMPLOYEES?

Recently, I’ve received numerous questions and seen online discussions about an apparently increasing practice where employers are demanding social media login and password information from applicants and employees.

Although I’m not aware of any legislation in Georgia that concerns this employment practice, it's becoming popular enough to warrant the attention of at least two state legislatures.  Both Maryland and Illinois are currently considering bills that would limit an employer’s ability to obtain social media login and password information from applicants and employees.  (Here are links to Illinois bill HB3782 and Maryland bill HB0964.)

Regardless of this proposed legislation, employers can and do look at publicly available social media information posted by applicants and employees.  As many employers know, this can be a double-edged sword.  While viewing such information can allow an employer to dodge a bullet by avoiding or discontinuing an employment relationship with an unqualified employee, an employer’s awareness of social media information can also subject an employer to risk of being sued.   This is because social media may allow an employer to learn information about an applicant or employee that could support a discrimination claim.   For instance, an employer’s knowledge of an applicant’s religion could support that applicant’s claim that the employer chose not to hire him because of his religion, even if the employer had another, legitimate basis for not hiring him.

An employer may also review social media postings by its employees to look for unfavorable comments that could defame or otherwise hurt the employer's business reputation.   Here, again, caution is necessary because the National Labor Relations Board (NLRB) has recently taken the position that an employer's acts which chill employee complaints about the employer on social media sites can be illegal interference with an employee's right to complain as part of “concerted activity” that is protected by the National Labor Relations Act.   Although this is a complex topic that will be discussed in detail in forthcoming posts here, even non-union employers must be very careful when creating social media policies for their employees, and especially before making any employment decisions based on an employee’s social media postings complaining about his or her employer.  For those interested, here's a copy of the NLRB's recent memo that provides employers guidance about the NLRB's position on employees' rights to criticize their employers on social media.

DON’T BOGART MY TWEET! – Or, How Courts Are Coming to Recognize Companies’ Rights to Own Social Media Accounts Used by Their Employees for Business

As businesses have come to recognize the power of social media, they’re rushing to Facebook, Twitter, LinkedIn, and other social media platforms to connect and do business.  The effectiveness of these efforts has prompted businesses to invest more time and money to develop sophisticated social media presences. Recent surveys suggest that this increase will continue.  For instance, a Fuqua School of Business survey of CMO’s suggests that the percentage of marketing dedicated to social media will nearly triple over the next five years.

This investment is not without some risk, however, because these social media platforms are controlled by third-party providers that establish their own terms of service and account rights.  Whereas a business can have complete control over content on and access to the websites that it owns, things can become a bit dicey in the world of social media, where even large businesses are relegated to being users rather than owners.

A business should be able to maintain substantial control of its Facebook site by limiting access to change its page and through control of information posted by others.  But what about Twitter accounts or the even murkier area of LinkedIn profiles that can include contacts which are the heart and soul of a service or sales business?  If one of your employees goes south on you or runs off to compete, can he or she claim ownership of the Twitter handle or LinkedIn contact list that he or she used on your behalf to do business for you?  Does it matter that you invested time and money developing and marketing that Twitter handle or LinkedIn presence?

These scenarios are now starting to play out and have wound their way to courts, which are finally starting to weigh-in on issues involving ownership of and rights to social media accounts.  A review of reported cases indicates that we’re just at the tip of the iceberg.  However, two recent decisions indicate that courts are at least willing to consider claims that social media accounts are property that can support claims for misappropriation and conversion.  Although these decisions are preliminary and neither court has made a final determination of such claims, businesses investing in social media would be wise to follow this area of the law closely, as court decisions will better enable businesses to assess, and take steps to protect, their investment in social media.

(1)    [Whistle!]  Come Here, PhoneDog!

Late in 2011, a California federal district court denied a motion to dismiss a claim asserted by a company which alleged that its former employee’s refusal to relinquish his Twitter account constituted misappropriation of a company trade secret and conversion (lawyerspeak for “taking”) a company asset.  The case is PhoneDog v. Kravitz, where PhoneDog sued its former employee Kravitz for return of the Twitter account that Kravitz had used to do business for PhoneDog.  Here’s a link to the PhoneDog order that’s the subject of this post:  Download Phone Dog Order.

PhoneDog is a “news and reviews” site that focuses on mobile products and resources.  It uses an array of social media to promote and market its services, including the Twitter handle “@PhoneDog_Noah,” which Kravitz used to publish information on behalf of PhoneDog for about four years.  Kravitz apparently had about 17,000 Twitter followers.  The trouble started when Kravitz left PhoneDog and refused PhoneDog’s request that he relinquish his Twitter account because PhoneDog claimed the account as its own.  Although Kravitz has continued to use his Twitter account, he did change his handle to “@noahkravitz” when PhoneDog asked him to relinquish it.

Kravitz tried to throw an early punch in this fight and moved to dismiss the case on the grounds that his Twitter account was neither capable of being a trade secret, nor capable of being “owned” by an employer.  Taking PhoneDog’s allegations as true (which the court must do in response to Kravitz’s motion to dismiss), the court allowed PhoneDog to proceed with its claims that the Kravitz’s Twitter account was capable of being a trade secret that could be misappropriated, and that the account was also capable of being converted.

While this is certainly a judicial nod toward recognizing that an employee’s Twitter account can be property that is capable of misappropriation and conversion, the preliminary nature of this ruling leaves much to be seen.  Among other things, it will be interesting to watch and see the effect of Kravitz’s change of his handle to remove PhoneDog’s name, the extent to which PhoneDog may have owned and invested Kravitz’s handle, and arguments that may try to use Twitter’s terms of service to establish rights in and to the account.

(On a side note of interest, the court’s order also generally addressed the value of a Twitter account, because the court had to determine whether PhoneDog’s claims satisfied a jurisdictional requirement that its damages would exceed $75,000 if successful in court.  For purposes of this preliminary motion, the court accepted PhoneDog’s claim that a Twitter follower is worth $2.50/month, according to industry standards.  Thus, 17,000 followers/month valued at $2.50 each for eight months would result in damages totaling $340,000.)

(2)    Fly Like an Eagle

More recently, a Pennsylvania federal district court reached a similar conclusion about rights to a LinkedIn account.  The case is Eagle v. Morgan and is pending in a California federal district court. Here’s a link to the Eagle order that’s the subject of this post:  Download LinkedIn Order

This case involves Dr. Eagle, a Ph.D. who started a financial education company called Edcomm.  Dr. Eagle was apparently successful in her field and had relationships with thousands of clients in the financial services industry.  In October 2010, she sold the stock in Edcomm to SISCOM and was to remain on as an employee.  Since 2008, Dr. Eagle used a LinkedIn account for her business with Edcomm—so much so that other Edcomm employees had her login/password information and would assist in maintaining her LinkedIn profile.

After a brief honeymoon, relationships soured and it seems that the newly acquired Edcomm decided to involuntarily terminate Dr. Eagle and others who had long been with the company.  Because others had Dr. Eagle’s LinkedIn login/password, they were able to hijack her account and change this information so that Dr. Eagle could no longer access the account.  The hijackers then changed Dr. Eagle’s LinkedIn profile to an odd mishmash that showed another Edcomm employee’s name and picture, that displayed Dr. Eagle’s biographical information, and that improperly stated that Dr. Eagle had voluntarily resigned from Edcomm.

Because of this, Dr. Eagle sued Edcomm and people there who had hijacked her LinkedIn account.  Edcomm, in turn, asserted counterclaims against Dr. Eagle that included a count for misappropriation of her LinkedIn account. In support of this claim, Edcomm alleged an interest in Dr. Eagle’s LinkedIn account and contacts because Edcomm had invested substantial time and money in developing her account and connections.  Specifically, Edcomm noted that Edcomm policies adopted by Dr. Eagle required its employees to create an maintain LinkedIn accounts that used an Edcomm email address and other contact information and that utilized a specific template prescribed by Edcomm.  Those policies also included monitoring of its employees’ LinkedIn information to ensure that these policies were followed.

Although the court considered whether Edcomm had stated a claim for misappropriation of trade secrets against Dr. Eagle for her use of her LinkedIn account, the court found that she did not because the public nature of her LinkedIn account and connections was too public to qualify as a trade secret.  The court also considered whether Edcomm had stated a valid claim for misappropriation of ideas based on Dr. Eagle’s attempted use of her LinkedIn account and contacts.  Based in large part on the policies and efforts of Edcomm to control and monitor its employees’ use of LinkedIn, the court held that Edcomm could continue with its claim for misappropriation of ideas.

(3)    Lessons Learned

Although it’s not yet clear whether these claims will ultimately be winners, businesses and employees who rely on social media accounts should consider their rights to these accounts.  The LinkedIn case especially suggests that businesses that hope to have rights over their employees’ accounts should initiate policies governing use of these accounts.  Among other things, this could be part of a social media policy. Rights to social media accounts can be further solidified through the use of employee agreements.

One thing that remains to be seen is the extent to which courts will force employees and others to completely relinquish social media accounts.  For instance in the Twitter case referenced above, one would think that Kravitz’s change of his Twitter handle from “@PhoneDog_Noah” to “@noahkravitz” would be a fair balance of addressing PhoneDog’s concerns about misappropriation and Kravitz’s right to continue Tweeting using a handle based on his own name.  Similarly, it will be interesting to see how a court would actually strip a former employee such as Dr. Eagle of all right to have a LinkedIn account in her name and eradicate contacts in that account. One wonders whether state laws governing unfair competition (such as covenants not to compete or solicit) will some day address these issues directly.  Until this becomes clearer, businesses and employees alike will need to think before investing a lot in social media accounts.