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Corporate and Securities Law Alert

Whose Social Media Account Is It, Anyway?

Thursday, May 16, 2013

A detailed social media policy specifically addressing the ownership of social media accounts is key to a corporation’s ability to maintain ownership of an employee’s account after the employee leaves the corporation. This was made clear in the recent decision by the U.S District Court for the Eastern District of Pennsylvania in Eagle v. Morgan, 2013-11-4303 (E.D. Pa. 2013).

‘Focus on how to be social, not on how to do social.’ - Jay Baer

In 2012, 73 percent of all Fortune 500 companies used Twitter, 66 percent had a corporate Facebook page and 28 percent had a public-facing blog, stated a study conducted by the University of Massachusetts at Dartmouth.1 While small businesses are somewhat lagging behind (with just 24 percent of small businesses and 33 percent of medium-size businesses having integrated social media in a structured way for their businesses),2 they are quickly closing the gap and increasing their social media presence.

So You’ve Got a Social Media Account? That Don’t Impress Me Much

In many cases, businesses encourage executives and other employees to open and maintain social media accounts, and to use them in the course of their employment alongside the corporation’s social media account. In the absence of clear corporate guidelines specifically addressing the ownership of social media accounts, however, the corporation may not successfully assert ownership over an employee’s social media account when the employee’s employment is terminated. This lesson was recently learned by Sawabeh Information Services Company (SISCOM).

Dr. Linda Eagle, along with the two other founders of Edcomm, a banking education company, sold Edcomm to SISCOM. The three founders were to remain employed as executives in SISCOM, but were involuntarily terminated. While at Edcomm, Eagle opened a LinkedIn account using her Edcomm e-mail account and used it extensively in the course of her employment. Edcomm encouraged its employees to open social media accounts and provided guidelines for maintaining such accounts through employee policies covering online content. The policies did not, however, address who owns the content of an account, such as the LinkedIn account in question. During her time with Edcomm, Eagle provided the password to her LinkedIn account to several employees so that they would be able to assist in managing the account. Following her termination, these employees used the password to access the account and change the password, effectively locking her out of the account for a certain period, following which LinkedIn took control of the account and subsequently returned control to her. When in Edcomm’s control, the account was changed to contain the details of Sandi Morgan, the new CEO of Edcomm. However, some information about Dr. Eagle, such as honors and awards, remained. In addition, both a Google search and a LinkedIn search for “Linda Eagle” led to the LinkedIn account named “Linda Eagle,” which contained the name, credentials and picture of Sandi Morgan.

Eagle sued Morgan, Edcomm and other individuals at Edcomm for: (i) unauthorized use of name; (ii) invasion of privacy by misappropriation of identity; (iii) misappropriation of publicity; (iv) identity theft; (v) conversion; (vi) tortious interference with contract; (vii) civil conspiracy; and (viii) civil aiding and abetting. Edcomm counterclaimed for: (i) misappropriation and unfair competition.

An Account By Any Other Name … Is Misappropriated

The District Court held that by taking over Eagle’s account and replacing the content with Morgan’s information, Edcomm was liable for unauthorized use of name, invasion of privacy by misappropriation of identity and misappropriation of publicity. All three claims under Pennsylvania law require the use without consent of a person’s name or likeness, with or without commercial advantage. Dr. Eagle’s name had commercial value because she invested time and effort to make her name known in the banking education industry, and has been published and quoted. Edcomm made use of her name, without consent, for commercial advertising purposes. This is because by searching for Dr. Eagle on Google or on LinkedIn “an individual would unwaringly be put in contact with Edcomm despite the fact that Dr. Eagle was no longer affiliated with Edcomm and did not consent to Edcomm’s use of her name.” Thus Edcomm received commercial benefit from using Dr. Eagle’s name to promote the services of its business. Further, by changing the password and locking Dr. Eagle out of the account and changing the content, Edcomm deprived Dr. Eagle of the commercial benefit of her name.

No Harm, No Foul

Though the court held in favor of Dr. Eagle with respect to three causes of action, the court did not order Edcomm to pay any compensatory damages since Dr. Eagle did not establish with reasonable certainty the fact the damages were caused to her due to being locked out of her account and failed to provide a reasonably fair basis for calculating such damages.

Possession Is Not Always Nine-Tenths of the Law…

The Court suggested that the holding may have been different if the social media policy SISCOM had in place had addressed the issue of use and ownership of social media and social media accounts. Additional factors that may advance the cause of a corporation seeking to retain an employee’s social media account after the employee left are: (1) dictating the contents of the employee’s account; (2) payment of the social media account fees for the employee’s account; (3) the fact that the employee acted on behalf of the corporation due to the employee’s position; or (4) the fact that the social media account was developed and built utilizing time and resources provided by the corporation.

Pepper Point: In order to better protect their interests and decrease uncertainty, corporations should note in writing, in a social media policy and/or in non-competition, non-solicitation, non-disclosure, or confidentiality agreements with employees, contractors, and vendors, specific provisions with respect to:

  • what is proper conduct over social media (content, use of company proprietary information and intellectual property, use of confidential information, etc.)
  • in whose name the account is registered
  • who owns the account and related persona
  • who has access to the account
  • what happens to the account following termination of employment
  • who determines the account password and how it may be changed.

For additional guidance on corporate social media policies, see our Corporate and Securities Law Alert, “Social Media Use by Public Companies – The SEC Weighs In,” dated April 4, 2013.

Endnotes

1 http://www.umassd.edu/cmr/socialmedia/2012fortune500/

2 Anusha Santhanam “How Social Media Marketing is Driving Big Businesses” Digital Voices, February 13, 2013 http://www.ayantek.com/how-social-media-marketing-driving-big-businesses#.UYlNhqL-Mhq.

Odia Kagan

Written by

Odia Kagan
Phone: 215.981.4647
Fax: 215.981.4750
kagano@pepperlaw.com


The material in this publication was created as of the date set forth above and is based on laws, court decisions, administrative rulings and congressional materials that existed at that time, and should not be construed as legal advice or legal opinions on specific facts. The information in this publication is not intended to create, and the transmission and receipt of it does not constitute, a lawyer-client relationship.

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