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.
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. and can be reached at (603) 628-1360 or [email protected]. 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.