Twitter. Google Plus. Facebook. LinkedIn. YouTube. As companies continue to expand their social media presence, disputes are beginning to arise over ownership of such media when the employee leaves the company. If your employee uses social media to promote your business, interact with customers, or recruit employees, what happens when that employee leaves? Who owns the account? While the law in this area continues to emerge and develop, there are steps that an employer can – and should – take to protect itself now.
The case that has attracted the most attention is between PhoneDog.com and its former employee, Noah Kravitz. PhoneDog v. Kravitz, Case No. 11-cv-03474-MEJ (N.D. Cal.). Last year, PhoneDog sued Mr. Kravitz, alleging that he had refused to return a Twitter handle that the company alleged belonged to it.
In the complaint, PhoneDog alleged that, while he was employed by PhoneDog, Mr. Kravitz tweeted @Phonedog_Noah. It alleged that, as part of Mr. Kravitz’s employment, he submitted and video content to PhoneDog, which was then transmitted to its users via a variety of mediums, including the @Phonedog_Noah Twitter account.
PhoneDog alleged that, by the time Mr. Kravitz ended his employment with PhoneDog, he had amassed over 17,000 followers. It alleged that, although it requested he relinquish use of the Twitter account, Mr. Kravitz instead changed the handle to @noahkravitz and continued sending tweets under that name. PhoneDog sued Mr. Kravitz in California federal court and alleged that, under unspecified “industry standards,” each follower was worth $2.50 a month, so that Mr. Kravitz was liable for $340,000 in damages.
In a statement, PhoneDog took the position that “[t]he costs and resources invested by PhoneDog Media into growing its followers, fans and general brand awareness through social media are substantial and are considered property of PhoneDog Media, L.L.C.”
In November 2011, the federal court denied Mr. Kravitz’s motion to dismiss the complaint. The court held that, without discovery, it could not resolve whether PhoneDog had a property interest in the Twitter account and, if so, what was its value. It also held that there was an open question on whether the Twitter password and followers were trade secrets and, as a result, denied Mr. Kravitz’s motion to dismiss a misappropriation of trade secrets claim. The PhoneDog case is now in discovery.
Another closely-watched case involves the ownership of a LinkedIn account. In Eagle v. Morgan, Case No. 11-4303-RB (E.D. Pa.), the plaintiff (Linda Eagle), the founder and executive of Edcomm, Inc., alleged that she had established and maintained a LinkedIn account.
After her company was purchased by another company, Dr. Eagle was involuntarily terminated. She alleged that, when she attempted to access her LinkedIn account after her termination, she could not, because a former colleague changed the password and prevented her access. She alleged that she was not able to regain access to her LinkedIn account for three weeks.
The dispute took an odd turn when, in subsequent litigation between Dr. Eagle and Edcomm, Edcomm alleged that Dr. Eagle’s LinkedIn account belonged to it and that she had misappropriated it. It asserted that, under Dr. Eagle’s management, Edcomm’s employees were required to create LinkedIn accounts; utilize a special Edcomm form to maintain the look and feel of the accounts; include links to Edcomm’s website; and utilize Edcomm’s template for replying to individuals through LinkedIn. As such, Edcomm maintained, Dr. Eagle’s LinkedIn account (and, indeed, the LinkedIn accounts of all Edcomm employees) belonged to Edcomm and that Dr. Eagle was liable for refusing to return her account to Edcomm.
The court held that Edcomm’s misappropriation claim survived a motion to dismiss. Based on the allegation that “Edcomm personnel, not Dr. Eagle, developed and maintained all connections and much of the content on the LinkedIn Account, actions that were taken solely at Edcomm’s expense and exclusively for its own benefit,” the court held that the misappropriation claim needed to be resolved after discovery.
Rather than engaging in protracted discovery and litigation, as in the PhoneDog and Eagle cases, there are steps a company should take, up front, to protect its interests. Specifically, a company hiring or designating a person to oversee or manage its social media or online presence should make it clear, in writing, that the company owns the social media. Thus, for example, in Ardis Health, LLC v. Nankivell, Case No. 11-cv-05013-NRB (S.D.N.Y.), the court granted a company’s motion for injunctive relief and ordered a former employee to return login, password and other social media access information.
According to the court’s opinion, Ms. Nankivell was hired as a video and social media producer and, in that capacity, maintained websites, blogs, social media pages, passwords, and login information for related companies. At the start of her employment, she signed an agreement which provided that all work created or developed by her “shall be the sole and exclusive property of [the plaintiff], in whatever stage of development or completion.” The same agreement required her to return all confidential information upon request.
Notwithstanding the foregoing, when she was terminated, Ms. Nankivell refused to return certain confidential information to the companies, meaning that they were unable to access several of their online accounts and websites, to their detriment.
The court held that, based on the agreement, “[i]t is uncontested that plaintiffs own the rights to the Access Information. Defendant’s unauthorized retention of the information may therefore form the basis of a claim of conversion.” For this reason, it held that Ms. Nankivell must turn over the login, password and other access information.
Ardis Health thus provides a good example of the steps a company should take – up front – to protect itself later. Draft, execute and implement a policy that clearly and unequivocally states that all Twitter and other social media accounts (and the fans and followers that go with them) that are used by employees for work-related purposes (such as @PhoneDog_Noah’s use) are owned by the company and that, upon an employee’s separation from the company, the employee must return them immediately. Make clear that the company is entitled to injunctive relief if the employee refused to comply with the return directive. And update the policy as your social media presence changes.