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January 15, 2014

The Four Questions on Who Owns an Organization’s Social Media Account

Summary:

By paying attention to the key questions you can manage some of the risk as well as the moral and ethical issues when dealing with this question of who owns an organization’s social media account.

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When PhoneDog vs. Kravitz was filed two-plus years ago, it highlighted a concern at many organizations about how to protect their right to own the content that they and employees post on social-media sites about their brands, plus the data about those who read that content.  

As we move into 2014, the concern remains because PhoneDog vs. Kravitz was settled out of court in late 2012, leaving no legal precedent, and because progress on the underlying issue on other fronts has been limited. (PhoneDog sued an employee, Noah Kravitz, who took 17,000 Twitter followers with him when he quit. PhoneDog claimed he was stealing a client list and owed the company $340,000. Under the settlement, Kravitz was allowed to continue using the @noahkravitz Twitter handle, but no other terms were disclosed.)

To address the issue of who owns an organization’s social media account, here are the four questions I receive most often on the topic, along with my responses:

1. Under what circumstances does the organization have the right to claim ownership of a social-media account if it was always operated solely by the employee? 

Response:  This issue had not received a lot of attention until PhoneDog vs. Kravitz even though organizations must protect their social-media assets, especially if they use social media as part of their marketing platform.

If there is a dispute about ownership, employers are suing for trade-secret protection of these social-media accounts. Employers are also alleging common law theories of misappropriation or conversion against former employees for taking contacts or passwords upon their departure from the company.

Former employees are also using the misappropriation and conversion theories to sue their former employees. This occurred, for instance, in Eagle v. Moran, where a company gained access to a personal LinkedIn account of a former employee and replaced her name and picture with that of her replacement. The former employee soon regained control of the account and refused to relinquish it, leading to a series of claims and counterclaims. The case raised the prospect that the company might own the account even though it had been opened in the employee’s name and even though she had sole control over it—the reason being that corporate policy stated that employees needed to open and operate social-media accounts. Again, however, the case didn’t set precedent because the record from the November 2012 bench trial remains under seal.  No final decision has been entered 

2. Under what circumstances is it just too bad for the company? In other words, when does a company simply have no rights to the ownership of a social-media account?

Response: Even though terms of the PhoneDog v. Kravitz settlement aren’t known, we do know that client lists, cultivated over time on a company’s good reputation and using its resources, are company property.  The question is: What standard applies to Twitter followers, LinkedIn contacts or Facebook friends – and how does one measure the value?   

Courts may consider the following factors when determining ownership of social media accounts:

  • Who set up the accounts and directed the content?
  • Were the accounts set up before or during employment?
  • Who had access to the accounts and passwords?
  • Was the name or account associated with the employer’s name or with the brand?

3. (a) Was there a signed policy at the opening of the account?

Response: Employers should obviously implement policies and develop agreements specifically relating to the ownership of company social media accounts, but is it currently “required” by law or otherwise? No.   (The plus side of PhoneDog v. Kravitz is that the media exposure meant that, according to research by law firm Proskauer, the number of employers who now have written policies about social-media use at work has climbed to 69% in 2013 from 55% in 2012.)

For the employer:

  • Accounts should be set up by the company’s management (using the company name in the handle or account name). The company should maintain the passwords, should only give access to those who need it as part of their job duties and should direct the content.
  • The employer must communicate to the employee in writing that it owns the accounts and the content and that content contributed as part of the employee’s job is owned by the company. (Such specific agreements could be an offer letter, a nondisclosure agreement or a noncompete agreement.)

For the employee:

  • The employee needs to discuss, at least at the beginning of employment, company policy about who owns social media accounts, including personal ones if the employee is agreeing to use those accounts to promote the company’s business. Then, any changes could be addressed by an amendment to the applicable agreement with that employee.

 (b)   If there is a signed agreement, what is legally allowed to be included? 

Response: Here are a few examples of points that should be covered (courtesy of Anthony Zeller, employment litigation attorney, VanVleck, Turner & Zeller):

  • Who owns an employee’s social media accounts that will be used for business purposes, along with any restrictive terms of use of the employee’s social-media accounts during employment.
  • Ownership and use of the company’s social media accounts. Who retains the right to change the passwords? Who retains the right to edit and approve content? What is the process to approve content before publishing?
  • What control, if any, the company will have over the employee’s or the company’s social-media accounts after the termination of the employment relationship. Is there a timeframe after employment during which the employee cannot use his or her own social-media accounts for competitive business uses?

4. Do laws differ significantly from state to state and from country to country?

Response:

  • United States: Currently, adjudication of lawsuits is at the state level, so, yes, there is considerable variance.  Companies also need to be careful that any limits on an employee’s use of social-media accounts don’t violate other laws, which also vary state by state.
  • International:   Yes, there is variance from country to country.

The law is still a work in progress.  But by paying attention to the key questions you can manage some of the risk as well as the moral and ethical issues when dealing with this question of who owns an organization’s social media account.

Disclaimer: The information contained in this document is provided only as general information and may or may not reflect the most current developments legal or otherwise pertaining to the subject matter thereof.  Accordingly, this information is not promised or guaranteed to be correct or complete, and is not intended to create, or constitute formation of an attorney-client relationship. The author expressly disclaims all liability in law or otherwise with respect to actions taken or not taken based on any or all of the content of this document.

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