Think You Own Your LinkedIn, Twitter and Facebook Account? Think Again!

[Readers:  My partner, Nick Akerman, who works in Dorsey's NYC office, wrote the article below.  Given the increasing intersection between employment law and social media issues, I thought you might find it of interest.  For more information about Nick, check out his bio at http://www.dorsey.com/akerman_nick/.  If you would like to see other pieces written by Nick, take a look at his Blog on computer fraud issues, http://computerfraud.us/.  I hope you find the article below of interest.  Regards, Roy]

Think You Own Your LinkedIn, Twitter and Facebook Account?  Think Again!

By:  Nick Akerman

You may not, as reflected in the recently reported decision of Eagle v. Morgan, 2011 WL 6739448 (E.D. Pa. December 22, 2011) where both the employee and her former employer claim ownership in the employee’s LinkedIn account, the popular social networking site for business professionals.  The dispute is starkly drawn in the litigation’s opposing pleadings and provides a strong warning to the hundred million plus LinkedIn users and other users of social media who operate under the assumption that their social media accounts belong solely to them to transfer as they please when they change jobs.

The facts in the Eagle case will sound familiar to all social media mavens who use sites like LinkedIn to promote their businesses and professional careers.  The plaintiff Linda Eagle, a Ph.D. in communications and psychology, established her LinkedIn account in 2008 after she and others founded Edcomm, Inc. (“Edcomm”) to train individuals to work in the financial services industry.  Like others who sign up for a free account with LinkedIn, Dr. Eagle’s complaint alleges she had to assent to a user agreement “which constitutes “a legally binding agreement with LinkedIn Corporation” and, as such, “information provided to LinkedIn is owned by the LinkedIn user, subject to the other terms of the User Agreement.” Id. at *1.

According to LinkedIn’s terms of use, “[u]sers can maintain only one LinkedIn account at a time” and “Dr. Eagle [as alleged in her complaint] used her account to promote Edcomm’s banking education services; foster her reputation as a businesswoman; reconnect with family, friends, and colleagues; and build social and professional relationships.” Id.

In October 2010 Sawabeh Information Services Company (“SISCOM”) purchased Edcomm. Dr. Eagle initially remained employed by SISCOM as its CEO, but approximately six months later Edcomm involuntarily terminated her employment.  According to Dr. Eagle’s complaint, Edcomm then hijacked her LinkedIn account using her LinkedIn password.  Her complaint alleges that Edcomm used her password “to gain unauthorized access” to her account, “changed the password,” and “then changed Dr. Eagle’s account profile to display” Edcomm’s new CEO’s “name and photograph” “but Dr. Eagle’s honors and awards, recommendations and connections.” Id. at *2.  The complaint alleges that Edcomm “used Dr. Eagle’s account both to prevent her connections from reaching her, and to acquire business connections for the benefit of . . . [the new CEO] and Edcomm. Id.

In response Edcomm filed a counterclaim alleging facts that Dr. Eagle’s LinkedIn account had been established and used for the benefit of Edcomm at Edcomm’s expense.  Thus, the counterclaim alleges “that Edcomm, while under Dr. Eagle’s management, implemented a policy requiring Edcomm’s employees to create and maintain LinkedIn accounts.” Id at 3. All Edomm executive employees, as a matter of company policy, were required “to: (a) utilize their Edcomm email address for LinkedIn accounts; (b) utilize a specific form template, created and approved by Edcomm, for their description of Edcomm, work history, and professional activities, as well as photographs taken by a professional photographer hired by Edcomm; (c) contain links to Edcomm’s website on LinkedIn accounts and the Banker’s Academy webpage, as well as Edcomm’s telephone number; and (d) utilize Edcomm’s template for replying to individuals through LinkedIn.” Id.  The counterclaim further alleges that “[c]ertain Edcomm employees monitored these LinkedIn accounts, corrected any violations of Edcomm policy, and maintained accounts for several employees for the benefit of Edcomm” and that “all discussions, connections, and content were added by” Edcomm employees.” Id.

In short, Edcomm alleges that “Dr. Eagle’s LinkedIn account was used for Edcomm business and Edcomm personnel developed and maintained all connections and much of the content on her account” and that Dr. Eagle, who regained control of her LinkedIn account after initiating her lawsuit, had “wrongfully misappropriated both Edcomm’s connections on the LinkedIn account and Edcomm’s telephone number constituting Edcomm’s proprietary information on the account.” Id.

Based on these dueling allegations both sides filed numerous claims against each other.  Dr. Eagle alleges violations of the Computer Fraud and Abuse Act (“CFAA”), Title 18, U.S.C. §1030, violation of Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a)(1)(A), unauthorized use of name in violation of 42 Pa.C.S. § 8316, invasion of privacy by misappropriation of identity, misappropriation of publicity, identity theft under 42 Pa.S.C. § 8315, conversion, tortious interference with contract, civil conspiracy and civil aiding and abetting. Id. at. *2.  Edcomm also alleges violations of the CFAA, misappropriation, conversion, tortious interference with contract but added claims for unfair competition and a violation of the Pennsylvania trade secret law.

Dr. Eagle moved to dismiss all of Edcomm’s claims on the ground that they do not, as a matter of law, allege facts constituting proper claims for relief.  The court granted Dr. Eagle’s motion to dismiss all of Edcomm’s claims except for two Pennsylvania law causes of action, 1) misappropriation of an idea and 2) unfair competition that is essentially based on the same elements of the misappropriation claim.  Under Pennsylvania law misappropriation of an idea requires the plaintiff to prove that 1) the plaintiff had an idea that was novel and concrete and 2) the idea was misappropriated by the defendant. Id. at *13. As the court explained,

“[t]o determine whether an idea has been misappropriated, Pennsylvania courts look to the three elements of common law misappropriation:

(1) the plaintiff “has made substantial investment of time, effort, and money into creating the thing misappropriated such that the court can characterize the ‘thing’ as a kind of property right,” (2) the defendant “has appropriated the ‘thing’ at little or no cost such that the court can characterize the defendant’s actions as ‘reaping where it has not sown,’ “ and (3) the defendant “has injured the plaintiff by the misappropriation.”  Id.

In refusing to dismiss the misappropriation and unfair competition counts the court relied on the allegations in Edcomm’s counterclaim that “Edcomm personnel, not Dr. Eagle, developed and maintained all connections and much of the content on the LinkedIn Account, actions that were taken solely at Edcomm’s expense and exclusively for its own benefit.” Id.  The court stated, ‘[w]hile Plaintiff argues that Edcomm fails to allege facts that would show that it made a substantial investment of time, effort, and money into creating the cell phone number or LinkedIn account, Edcomm counters that its employees developed the accounts and maintained the connections, which are the route through which Edcomm contacts instructors and specific personnel within its clients.”  Thus, the court held that “these conflicting allegations create an issue of fact requiring further discovery.” Id.

With businesses like Edcomm actively encouraging their employees to use social media as a marketing tool, there can be little doubt that litigation over the ownership of social media accounts is likely to increase.  Just last July PhoneDog.com, a popular mobile phone site, sued in federal district court in California a former employee who had amassed approximately 17,000 followers on Twitter claiming that the followers constituted a company-owned customer list entitling it to $2.50 per month per follower or $350,000 in total damages.  The only way to avoid the inevitable lawsuits over the ownership of these accounts is for both employers and employees to be proactive in establishing ownership rights prior to using individual social media accounts as a marketing tool.

From the employer’s standpoint this ownership issue is a prime reason why employers should adopt social media policies clarifying who owns the social media accounts and ownership rights when the employment relationship is terminated.  For example, it may make sense to allow employees using LinkedIn to keep their accounts but cleanse them of information that belongs to the employer because of the employer’s financial investment in the site and to ensure the employee is no longer associated as a spokesperson for his former employer.  As a strategy to minimize, and perhaps avoid litigation altogether, an agreement between the employer and employee delineating the post employment rights of both the employee and employer to the account would seem the most efficient way to deal with this issue.