Many employees are taking online marketing into their own hands through social media. Problems can arise when employees or contractors create accounts that benefit the employer, but eventually leave and use the accounts to benefit a competitor. Employers typically seek to retain the connections, friends, and followers. Each situation is fact dependent, so companies should consult with legal counsel to ensure they are developing effective strategies to address this issue that change as technology changes. Below are just some examples where courts have considered these topics.
In PhoneDog LLC v. Kravitz, an employee used a twitter account, “@PhoneDog_Noah” to publish content on behalf of his employer. The employee successfully ran the account, amassing around 17,000 Twitter followers. After the employee quit, he kept the account and began using it on behalf of a competitor. This time, he changed the handle to his name, “@noahkravitz”. The prior employer brought suit arguing trade secret misappropriation, conversion, and other claims.
Upon a motion to dismiss the claim, the court refused. For his part, Mr. Kravitz argued that the identity of the twitter account followers and passwords were not trade secrets within the meaning of the state’s Uniform Trade Secrets Act. The court refused to dismiss the claim, stating that, as a preliminary matter, PhoneDog sufficiently described the matter it believed to be a trade secret to state a claim under the Act.
In Ardis Health, LLC v. Nankivell, an employee controlled a number of social media and website accounts on which the employer used to advertise its business. The employer filed suit, and moved for a preliminary order forcing the prior employee to turn over the accounts. In finding that a preliminary order was necessary, the court noted that the company would see irreparable harm without the account because the usernames and passwords enabling access to the sites and accounts were needed to continuously update pages and react to online trends. Without access, the business’s reputation would incur a negative effect, and it would struggle to remain competitive.
The court also suggested that by retaining custody to the account access information without permission could constitute conversion of the company’s property. In this case, no dispute existed but that the employer owned rights to control the accounts as the employee executed a Work Product Agreement which required return of the employer’s confidential information. This agreement also stated that any breach of that agreement would cause the employer irreparable harm.
In Eagle v. Morgan, the employee created a LinkedIn profile to promote herself and Edcomm. During her employment, the employee amassed a great number of connections that contributed to the growth of Edcomm. Edcomm was eventually sold and the employee was terminated. After the employee was terminated, the new Edcomm owners changed the employee’s LinkedIn password, removed her name and picture, and represented that the employee left the company. The employee sued, and the company filed a counter claim, arguing that the employee’s connections belonged to it.
In considering Edcomm’s misappropriation and unfair competition claims, the court noted that the company did not pay for employee’s LinkedIn accounts, did not dictate the contents of the account, and did not have a policy requiring a LinkedIn account. Moreover, Edcomm did not present any evidence that the employee’s contacts were built through the investment of anything other than the employee’s own investment, time, and money. As such, Edcomm’s claims failed.
If you are considering suit or facing a complaint, attorneys at Erickson | Sederstrom may be able to assist you on a variety of legal topics. Attorney MaKenna Dopheide may be reached at (402) 397-2200.