Hunton Employment & Labor Perspectives

The growth of social media as a low-cost, widely-accessible form of communication has made it an ideal tool for businesses large and small to market themselves and reach out en mass to consumers in a manner more direct, personal, and in many ways effective than traditional media.  With Americans spending more time on-line than ever before, the value of such social media accounts can be considerable.  So when an employee who has used social media to develop his employer’s business and goodwill resigns, who owns the account, the contacts, and valuable consumer data that come with it?

Two recent lawsuits, one involving a personal LinkedIn account and the other involving a company Twitter account, underscore how important it is for employers who have integrated social media into their marketing programs to implement policies that address this new technology, regardless of whether the accounts used are personal or company-operated.  In the Eastern District of Pennsylvania, Linda Eagle sued her former employer, EdComm Inc., over ownership of her LinkedIn account, which she started at the request of EdComm in 2008 to promote EdComm’s services, foster her reputation, and build social and professional relationships.  Eagle, the former CEO of EdComm, alleged that EdComm improperly changed the password on her account and replaced her photo and the name on the account after she was fired, prompting her to file suit for invasion of privacy by misappropriation of identity, misappropriation of publicity, identity theft, tortious interference with contract, civil conspiracy, and violations of the Computer Fraud and Abuse Act and the Lanham Act.  EdComm, who requires all employees to open LinkedIn accounts linked to their work e-mails, in turn filed counterclaims for misappropriation of an idea, unfair competition, conversion, and misappropriation of trade secrets, claiming a business interest in Eagle’s account.

In a second suit pending in the Central District of California, PhoneDog, LLC sued Noah Kravitz, a former employee whom it hired to promote the company on social media, when Kravitz resigned and changed the name on the Twitter account he used to send company “Tweets.”  In both cases, the employers contended that the LinkedIn and Twitter social media accounts in question were valuable company property that the employees could not take with them upon resignation any more than they could take a compact disc containing sensitive corporate data.

Notably, the employers’ claims survived motions to dismiss and/or for summary judgment in both lawsuits.  Although the cases are set for mediation and trial at the end of 2012, employers should take note of these emerging legal issues and consider proactively developing or modifying policies to protect their interests.  Social media issues potentially impact Marketing, IT, Legal and other departments and should be considered when employees are hired, during their employment, and at termination.  Given the developing nature and reach of this technology and the law, social media polic(ies) should be customized with an eye toward current litigation and tailored to the specific social media platform(s), the nature of the employer’s business, the nature of the social media account(s) used, and other things, including the social media site’s intellectual property policies.