Who Owns Social Media Accounts When Employees Use Them for Company Business?

What if the accounts contain personal information but also are valuable tools that could promote your company’s business? Can you take over former employees’ accounts to make sure your customer list doesn’t leave when your employees do?

A case now pending in the U.S. Eastern District Court of Pennsylvania (Eagle v. Morgan, et al. Civil Action No. 11-4303) is considering these and similar issues. Edcomm Inc.’s founder, Dr. Eagle, had established a policy that all Edcomm employees should have LinkedIn accounts. They had to use certain standard features, including their Edcomm email address, templates for work history and professional activities, photographs taken by an Edcomm photographer and links to Edcomm’s web site and phone numbers. Edcomm’s express policy was to mine the employees’ LinkedIn accounts, contacts, and email traffic for valuable information, which it viewed as its own property.

In the fall of 2010, Dr. Eagle sold the company. In 2011 the new owners fired her, alleging various misdeeds in connection with sale. Continuing the policy Dr. Eagle had established, the new owners, being in control of all employees’ LinkedIn password and account information, immediately changed her password and replaced her name and picture with a new executive, but left some of her professional qualifications in place.

Dr. Eagle sued on a number of Federal and state law theories, including the Federal Computer Fraud and Abuse Act, trademark law, invasion of privacy by misappropriation of identity, identity theft, and conversion. On October 4, 2012, the Eastern District Court rejected some – but not all – of her claims on summary judgment and the new owners are bringing their own counterclaims against her. It’s too soon to tell the ultimate outcome on the merits, but some lessons emerge:

  1. LinkedIn (by far the most widely used professional social networking site) by its very nature may arguably create property rights that could be valuable to employees and employer alike. Employers may view employees’ social media accounts as a potential repository of proprietary information, especially customer contacts.
  2. A company that wants to obtain the maximum commercial benefit from employees’ social networking activities, as did Edcomm, must adopt absolutely clear policies and obtain employee sign-off. Companies should consider retaining the right – and the ability – to purge a departing employee’s account of information the company views as proprietary.
  3. A company must carefully consider the nature of its work force and to whom such a policy should apply.

We would not necessarily recommend following Edcomm’s example, even if the court should wholly sustain its position on the legal merits. Overly intrusive social media policies risk powerful employee resistance, lack of active cooperation, or worse. Employees should be willing to accept some degree of tactful influence over what their social media sites say about their employer, and would surely agree that their use of social media to tout their own professional qualifications and position creates positive buzz for the company. Still, many employees firmly believe their social media accounts are their portable personal property.

When they leave a company, they expect to take the account with them, and keep their company experience as part of their electronic resume.

For the employer, of course, the questions include how to protect valuable company information stored in the employee’s social media account, how to protect the company’s reputation, and how to avoid committing an unfair labor practice by improperly restricting employees’ rights under the National Labor Relations Act to discuss the terms and conditions of their employment.

We urge clients to address these issues and consider carefully what sort of social media policy is most appropriate. Whether it should be strongly company-friendly or relatively even-handed with employees is a business judgment. Whatever the business goal, our attorneys are ready to help you craft effective social media policies which steer your company on the optimal path.

For more information about how Stevens & Lee may assist you, please contact the Stevens & Lee attorney with whom you regularly work or David R. Richie, II at 610.478.2127, Joseph P. Hofmann at 717.399.6643, G. Thompson Bell, III at 610.478.2203, or Paul R. Lewis at 610.205.6047.

This News Alert has been prepared for informational purposes only and should not be construed as, and does not constitute, legal advice on any specific matter. For more information, please see the disclaimer.

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