The following article was first published by our colleague Michael Schmidt on his blog, Social Media Employment Law Blog. It is part of our continuing effort to keep Cyberinquirer readers on top of decisions relevant to Social Media in the context of litigation. Thanks for the reprint, Mike.
What would you do if your employee continued to use your company’s Twitter account after he stopped working for you?
What if your (former) employee claimed that he, not your company, actually owned the rights to the Twitter followers?
Ever thought about it?
I have posted several times about how social media has not created new causes of action, but rather has provided a new application for traditional claims. One of the areas that I surmised would develop in time was the interplay between social media and post-employment competition and trade secret rights. According to two new decisions, that time has apparently come.
In PhoneDog v. Kravitz (Northern District of California), the company gave its employee (Kravitz) use of a Twitter account as part of his employment. Kravitz tweeted information to promote the company’s services, and generated approximately 17,000 followers. Kravitz left the company, and, while he changed the account “handle”, he continued to use the same account to tweet to the same followers. PhoneDog sued Kravitz for continuing to use the Twitter account, claiming that the “compilation of subscribers and the password used to access the account” constituted company trade secrets. Valuing each of the 17,000 followers at $2.50, the company sought damages of $340,000 for “stealing” each of those followers for 8 months.
The court denied Kravitz’s request for immediate dismissal of the entire case, finding that the complaint sufficiently alleged (for initial, liberal allegation purposes) a trade secret/misappropriation claim, and, thus, that the parties would have to further develop their positions through discovery. The court also refused to dismiss the company’s claim that the Twitter account (and not just the “handle”) constituted company property and should have been surrendered at termination.
Similar issues were raised in Eagle v. Edcomm, Inc. (Eastern District of Pennsylvania), though this time involving LinkedIn. Dr. Eagle had a Ph.D in communication and psychology, and co-founded Edcomm, Inc. to provide financial and related training services. Eagle established a LinkedIn account (with the assistance of company administration, who knew the password), which she used in part to promote the company’s services, as well as to develop her professional reputation and network. After the company was purchased by a third party, Eagle and others were terminated, and the company later changed Eagle’s password and her account profile to display the name and photo of the company’s new chief executive officer.
Eagle sued the company, alleging violations of the Computer Fraud and Abuse Act, and identity misappropriation/theft. The company asserted a counterclaim, arguing that the LinkedIn account was created using the company’s e-mail addresses and substantive templates to provide certain information, which rendered the accounts company property. In its decision on Eagle’s request for the immediate dismissal of the counterclaim, the court ruled that certain company claims could advance. Of note, the court found that the company is entitled to develop through discovery that it was its own staff that “developed the [LinkedIn] accounts and maintained the connections, which are the route through which” the company has its relationships with client contacts to provide services. In the end, as with the PhoneDog case, the court was not willing to make a determination as to ownership of the social media account at the early stages of the case.
What should an employer take away from this development?
There are a few issues that were not addressed by both of these inception-stage decisions, including the extent to which the account’s user agreements should play a role in determining appropriate expectations and true ownership rights between employer and employee. Nevertheless, your company should consider creating policies and agreements that address, not only the substance of what is posted or done through social media, but also the important ownership and access issues that may arise during, and particularly after, an employee’s employment. That is especially true for any employees whose job duties include engaging in social media activities on behalf of your company.
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