LinkedIn, Twitter and other social media are in the news again. Three courts are now considering the question of who owns the social media accounts before them. While none of the cases, detailed below, have definitively resolved the ownership question, taken together, they do provide a road map to what a company should be doing to better protect itself.
Let’s start with the first of two decisions issued last Fall. In Ardis Health, LLC v. Nankivell, Case No. 11 5013 (NRB) (Oct. 19, 2011, S.D.N.Y.), a former employee who was responsible for Ardis Health’s social media and related websites refused to return the access information for those accounts. Relying on a Work Product Agreement that the employee signed, Ardis Health was able to secure a preliminary injunction compelling the return of the access information for those accounts. This decision was pretty straightforward as the employee had signed an agreement and there was no dispute over who owned the accounts.
In the second case, however, there is a genuine dispute over who owns the social media account. In PhoneDog v. Kravitz, Case No. 3:11-cv-03475 (MEJ) (N.D. Cal., Nov. 8, 2011), the employer, PhoneDog, brought an action against its former employee, Noah Kravitz, to recover the Twitter account “@PhoneDog_Noah”, a substantial account with over 17,000 followers. Unlike Ardis Health, PhoneDog did not have an agreement or policy to establish ownership of the account (if it did, it was not raised or discussed in the opinion).
The opinion in PhoneDog only addresses Kravitz’s Motion to Dismiss, and therefore has limited value because it only found that PhoneDog presented cognizable claims. However, the district court did recognize that PhoneDog adequately presented claims for misappropriation of trade secrets (specifically, the password account) and conversion. (For a more thorough discussion of these two cases and links to the two opinions, see Russell Beck’s fine post in the Fair Competition Blog). Frankly, from my vantage point, the trade secret claim appears to be pretty thin and if PhoneDog is going to prevail, it will have to be on the conversion claim.
The most recent decision, Eagle v. Morgan, Case No. 11-4303 (E.D. Pa., Dec. 22, 2011), involves a battle over who owns the plaintiff Dr. Linda Eagle’s LinkedIn account. Dr. Eagle, who had built a business providing training for the financial services industry, sold her company, Edcomm, last year. In 2008, Dr. Eagle established an account with LinkedIn and she used her account to promote Edcomm’s banking education services, build her own professional reputation, and build social and professional relationships. An employee of Edcomm helped her maintain her LinkedIn account and had access to her password.
Last June, Dr. Eagle was terminated by the new owners of Edcomm, and she later discovered she could not access her LinkedIn account. When Edcomm refused to return the LinkedIn account, she filed a lawsuit claiming that she owned the account and that Edcomm was essentially misappropriating it. Of course, Edcomm and the new owners counterclaimed and alleged Edcomm owned the account.
In support of Edcomm’s claims, they alleged that Edcomm had policies that required employees to create and maintain LinkedIn accounts, that Dr. Eagle’s account was used for Edcomm business, and that Edcomm employees assisted in developing her profile and maintaining her account. Notably, however, Edcomm did not identify an agreement or policy indicating that Edcomm owned the LinkedIn account.
When Dr. Eagle moved to dismiss the counterclaims, Edcomm withdrew its claim that the LinkedIn account was a trade secret (a wise decision) as well as its conversion claim (perhaps not so wise) and relied soley on a claim for misappropriation of an idea under Pennsylvania law. Based on the policies detailed above, the Eastern District of Pennsylvania concluded that Edcomm had presented a claim sufficient to survive dismissal at this early stage and that discovery would need to be conducted to determine who truly owned the account. (For further analysis, check out Eric Meyer’s post on The Employer Handbook Blog and a copy of the opinion can be found here).
The takeaway? The importance of written agreements and policies establishing ownership. In Ardis Health, the employer was able to compel its former employee to turn over the access information for its social media accounts because there was a written agreement.
In contrast, in PhoneDog and Eagle, while both employers survived motions to dismiss, both face uphill battles, in my view, in establishing that they own the accounts. This is because, in the absence of a clear written understanding between the employer and employee, a court will likely be heavily influenced by whatever the Twitter and LinkedIn User Agreements say. In the case of LinkedIn, for example, the account and agreement are almost certainly going to be with the individual.
This may not be a big deal for many companies who may decide that they are better served by having no agreements or policies on ownership because that will better promote and encourage individuals to network, to sell, and to build professional relationships unimpeded by a corporate policy. However, to the extent that employees are charged with overseeing the social media accounts for their employer, policies and agreements are critical as the Ardis Health case illustrates. Many small businesses rely heavily on their Facebook presence for their marketing, and it could be catastrophic if a disgruntled employee departs and refuses to provide the required access and account information or tries to modify or alter the Facebook site.
At the end of the day, the culture and goals of the company should drive any policies or agreements, but it is important that the company at least considers the consequences if those agreements and policies are not created or implemented.