An Owner's Manual
California Lawyer
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An Owner's Manual

November 2013

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Social media provides increasingly important platforms where companies can build and manage their brands, in many cases eclipsing traditional ".com" websites. A company's social media page or profile and its associated followers, friends, and other connections are often considered to be valuable business assets.

But who owns these valuable assets - the company or the employee who manages them? If an employee's personality is essential to the popularity of the company's social media presence, lines between "company brand" and "personal brand" may become blurred. If the company and the individual then part ways, that blurring can raise difficult issues regarding ownership of business-related social media accounts.

As illustrated by a number of cases, it is imperative that companies using social media establish clear policies for their business-related social media accounts.

Account Ownership
Noah Kravitz worked for PhoneDog, a mobile news and reviews website, and used the Twitter handle "@PhoneDog_Noah" to provide product reviews. After accumulating 17,000 Twitter followers, Kravitz left PhoneDog to work for a competitor, but he maintained control of the Twitter account and changed the account handle to "@noahkravitz." When Kravitz refused PhoneDog's request to relinquish the Twitter account, PhoneDog filed a federal complaint against Kravitz in Northern California (where he lives) asserting trade secret misappropriation, conversion, and intentional and negligent interference with economic advantage.

Kravitz disputed PhoneDog's ownership interest in the Twitter account and its followers based on Twitter's terms of service, which state that Twitter accounts belong to Twitter and not to Twitter users. Kravitz also argued that Twitter followers are "human beings who have the discretion to subscribe and/or unsubscribe" to the account and are not PhoneDog's property, and he asserted that "[t]o date, the industry precedent has been that absent an agreement prohibiting any employee from doing so, after an employee leaves an employer, they are free to change their Twitter handle."

In PhoneDog's suit, the company claimed that it owned the account and its content based on the license to use and access the account granted in Twitter's terms of service. PhoneDog also asserted an "intangible property interest" in the account's list of followers, which PhoneDog compared to a business customer list. Kravitz filed a motion to dismiss on jurisdictional grounds, which the court denied. (PhoneDog v. Kravitz, 2012 WL 273323 (N.D. Cal.).)

The parties subsequently settled the dispute, so we will never know how the court would have ruled on the ownership or other interesting issues that the case presented. As of mid-September, however, Kravitz still controlled the Twitter account. The case might have been more straightforward had PhoneDog established clear policies regarding ownership of its social media accounts.

Login Ownership
A New York case better illustrates the point. The plaintiffs were a group of affiliated online marketing companies that sell herbal and beauty products. The defendant, Ashleigh Nankivell, was a former video and social media producer for one of the plaintiff companies (Ardis Health). Following her termination, Nankivell refused to turn over to Ardis the login information for the social media accounts she had managed during her employment. Ardis sought a preliminary injunction to compel production of that information.

Fortunately for the plaintiffs, Nankivell had executed an agreement when she began her employment providing that all work she created "shall be the sole and exclusive property" of Ardis, and requiring her to return all confidential information to the company upon request. As the court noted, "It is uncontested that plaintiffs own the rights to" the account access information.

Interestingly, the court also held that the plaintiffs were likely to prevail on their conversion claim, effectively treating the disputed account access information as intangible personal property. Accordingly, it ordered Nankivell to turn over the disputed information. (Ardis Health, LLC v. Nankivell, 2011 WL 4965172 (S.D.N.Y.).)

Even though the defendant's employment agreement did not specifically address social media, its generic work product ownership and confidentiality language helped the plaintiffs.

Post-Termination Issues
In a Pennsylvania case, the tables were turned: The plaintiff was a former employee of Edcomm, a company she'd helped to found. Linda Eagle alleged that after she was terminated, Edcomm took over and started using a Linked-In account that belonged to her. She alleged that the company changed her LinkedIn password and account profile, even replacing her name and photograph with those of her successor. After trial, the court issued what it described as a "mixed bag" opinion: Eagle prevailed on her claims of unauthorized use of name, invasion of privacy by misappropriation of identity, and misappropriation of publicity, but she was awarded no damages. The court also rejected the company's counterclaims for misappropriation and unfair competition. Although Edcomm had certain social media policies in place, they do not appear to have clearly addressed ownership of the accounts or their disposition after employees leave the company. (Eagle v. Morgan, 2013 WL 943350 (E.D. Pa.).)

Proactive Steps
As a precaution, companies should address ownership of company social media accounts in signed agreements with employees. Such agreements should state that all social media accounts registered or managed by the employees as part of their job - including associated account names, handles, pages, profiles, followers, and content - are the property of the company, and that all account access information is the company's confidential property and must be returned upon request. In general, companies should not permit employees to post under their own names on company social media accounts. If particular circumstances require an exception, the company might want to address ownership rights to the relevant account in specific contractual provisions.

Companies should also implement policies on the appropriate use of business-related social media accounts, including how to keep them separate from personal accounts. (Bear in mind that social media policies must be carefully drafted to comply with the National Labor Relations Act, state laws restricting employers' access to employees' personal social media accounts, and social media platforms' terms of use.) Finally, companies should control access to company accounts, and ensure that employees can't change account information.

Morrison & Foerster's of counsel Aaron Rubin, based in San Francisco, and associate Anelia Delcheva, based in San Diego, coedit and contribute, respectively, to the firm's Socially Aware blog and newsletter.

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