The question of whether an employer is entitled to trade secret protection over social media accounts used for business purposes is unfolding in several well-publicized cases currently pending in federal courts throughout the country. On July 15, 2011, PhoneDog LLC filed suit in the Northern District of California against a former employee, Noah Kravitz, who refused to relinquish access and discontinue use of his Twitter account, @PhoneDog_Noah, when he resigned from the company in October 2010. PhoneDog v. Kravitz, No. C 11-03474 MEJ, 2011 U.S. Dist. LEXIS 129229 (N.D. Cal., Nov. 8, 2011). Kravitz had used the Twitter account while working as an online product reviewer for PhoneDog, during which time he acquired over 17,000 followers. Rather than complying with PhoneDog’s request to discontinue use of the account, he simply changed the Twitter handle to @noahkravitz. PhoneDog brought several causes of action against Kravitz, including a claim for misappropriation of trade secrets alleging that the Twitter account password and followers were protectable trade secrets of PhoneDog. Kravitz filed a motion to dismiss the action, arguing that there was no “trade secret” information, because the followers of the account are not secret and are publicly discernible. The court denied Kravitz’s motion to dismiss the trade secret claim, concluding that PhoneDog had pled its claim with sufficient particularity to move forward with its case.
Meanwhile, in Christou v. Beatport, LLC, No. 10-cv-02912-RBJ-KMT, 2012 U.S. Dist. LEXIS 34307 (D. Colo. March 14, 2012), a federal district court in Colorado denied a nightclub owner’s motion to dismiss a trade secret case brought against him by a former business partner alleging that he had misappropriated the partnership’s MySpace page login credentials and friend connections when he left to form a competing nightclub business. According to the plaintiff’s complaint, the partnership’s MySpace pages each had over 10,000 “friends.” After leaving to start his own competing club, the defendant used the login credentials to post updates to his new competing night club. As in PhoneDog, the court denied the defendant’s motion to dismiss, reasoning that the MySpace login credentials and “friend” connections could constitute protectable trade secrets. The court noted that the MySpace pages were password protected and that the “friend” connections for the clubs’ MySpace pages were more than just lists of potential customers—they also provided personal information about the “friends” and their preferences— and that the clubs’ lists of “friends” could not be duplicated without a substantial amount of effort and expense.
In Eagle v. Morgan, No. 11-4303, 2011 U.S. Dist. LEXIS 147247 (E.D. Pa., Dec. 22, 2011), a federal court in Philadelphia denied a motion to dismiss a suit involving an employee’s LinkedIn account. The employee, Dr. Eagle, had established a LinkedIn account to promote her company’s banking education services as well as to build her own professional and social relationships. Company personnel helped her to maintain the LinkedIn account and had access to her password information. Dr. Eagle was denied access to the account after being terminated by the company, and sued her former employer alleging ownership over the account. The employer countersued Dr. Eagle, alleging that she had improperly stolen LinkedIn account connections that were valuable to the company’s competitive position. Dr. Eagle moved to dismiss, arguing that the LinkedIn account connections could not qualify as trade secrets, because they were either generally known in the wider business community or capable of being easily derived from public information. Although the court agreed with Dr. Eagle that the LinkedIn connections could not give rise to a claim for trade secret misappropriation under Pennsylvania law, it held that the company could proceed against Dr. Eagle on a theory of misappropriation of an idea – under Pennsylvania law, this tort merely requires a showing that the plaintiff had an idea that was novel and concrete and that the defendant misappropriated it. In reaching this decision, the court noted that the company had developed the LinkedIn accounts and maintained the connections. It further noted that the company policy had required employees to use their company email addresses, a specific template created by the company for their corporate descriptions and work histories, and a company-approved template for replying to individuals via their LinkedIn accounts.
Although each of the employers in the above-cited cases was allowed to proceed with its claims against the former employee, surviving a motion to dismiss is merely an initial hurdle; each now faces the prospect of expensive discovery and litigation, with no guarantee that their claims will ultimately prevail. A carefully drafted agreement between the employer and employee, delineating ownership of business-related social media accounts, could have spared these parties significant time and expense.