Copyright Elizabeth McQuage

Copyright Elizabeth McQuage

In today’s world, social media is an ever-increasing presence in our private lives. Taking advantage of this new outlet, many businesses are now increasingly relying on social media to promote their brand, advertise products, and connect with current and future customers.  Social media sites are a relatively cheap and effective way of promoting a business and allows for instantaneous communication to millions of people.  Facebook has over a billion active monthly users and Twitter has more than 140 million active users with over 750 tweets shared per second.  In fact, more than 50% of twitter users follow companies, brands or products on social networks and 67% of US twitter users are more likely to buy from brands they follow.  2012 marked the first time online advertising spending surpassed print advertising in total dollars.  Besides social networking accounts, businesses can advertise directly through Facebook and Twitter.  Through Twitter, advertisers can purchase “promoted tweets”, which are ordinary tweets that are automatically placed in users’ Twitter feeds.  With this kind of exposure, companies would be foolish not to take advantage and would actually risk losing business to those companies that do utilize social media.

However, as companies encourage and mandate their employees to create and maintain Twitter accounts, LinkedIn profiles, Google+ accounts, Facebook profiles, and YouTube channels to advertise their product, promote their brands, and market to potential customers, questions will arise as to who actually owns the social media account.  As you can imagine, employees do not usually stay at a company for their entire career.  What happens when an employee who was in charge of running a social media accounts leaves?  Employees will want to keep the account and followers they have established while employers will want to regain control over the account as they view the amassed followers as their property.

As using social media accounts for advertising and promotion is a fairly new phenomenon, many companies have not developed policies addressing the ownership of these accounts once an employee leaves.  With the absence of agreements, many companies may find themselves in disputes with former employees and possibly involved in litigation.

In once such case and their former employee, Noah Kravitz became entangled in litigation when Kravitz attempted to keep a Twitter account he created and ran for PhoneDog.  Using the Twitter handle @phoneDog_Noah, Kravitz amassed over 17,000 followers.  However, in 2010, Kravitz decided to leave PhoneDog.

Upon his resignation, Kravitz continued to use the Twitter account but changed the handle to @NoahKravitz.  Kravitz alleged PhoneDog gave him permission to keep using the Twitter account in exchange for posting occasionally.  Following learning Kravitz had begun working for a competing company, PhoneDog filed suit, asserting the Twitter account was its property.

PhoneDog stated, “[t]he costs and resources invested by PhoneDog Media into growing its followers, fans and general brand awareness through social media are substantial and are considered property of PhoneDog Media L.L.C. We intend to aggressively protect our customer lists and confidential information, intellectual property, trademark and brands.”

PhoneDog alleged the Twitter account passwords constituted confidential information, i.e. trade secrets, and Kravitz used that confidential information to unfairly compete against PhoneDog.

Kravitz alleged the Twitter account could not be a tradesecret as it was publically accessible.  Kravitz argues he initially created the password and there was no attempt to maintain the password’s secrecy.  PhoneDog argues, even if Kravitz created the account, he did so at PhoneDog’s request and in the course and scope of his employment. PhoneDog did not have a policy in place dictating ownership of any social media accounts.

At this time, a court has not yet determined the issue of who owns a social media account.  However, PhoneDog’s claims were able to survive motions to dismiss by Kravitz and this claim has recently settled.

The Uniform Trade Secrets Act defines a trade secret as information that derives independent economic value from not being generally known to or readily ascertainable through appropriate means by others and reasonable efforts are used to maintain its secrecy.  As this issue has not yet been determined, it’s unclear if courts are willing to extend trade secret protection social media account login information.  Courts will likely look to see who set up the accounts and directed/controlled the content, when the account were created (before or after employment), who had access to account passwords, who had access to the account, and whether the handle include the employer’s name or brand.

As the line between personal and professional social media accounts continues to blur, it is absolutely necessary for companies to address the issue of social media ownership at the beginning of the employment relationship.

While it is unclear whether courts will extend trade secret protection to social media account, what companies can take away from this situation is that adopting social media policies and guidelines that clearly address and outline social media ownership is essential.  Employers should consider: (1) whether the employer or employee may create a social media account to be used for business marketing and branding; (2) the definition of who owns and controls the employee account; (3) whether the account name should incorporate the company name; (3) who has access to account setting and passwords; (4) who may edit or add content to the account; and (5) the procedure to relinquish use of an account at the end of the employment period.

Employers should also contemplate post-employment non-compete and non-solicitation agreements to safeguard against a former employee using social media accounts for competing business, such as Kravitiz did.  A clearly written non-compete agreement outlining what post-employment social media activities an employee may and may not engage in, prohibiting an employee from conducting business with competing businesses on the internet and prohibiting employees from using other social media platforms for purposes of competition will help reduce confusion, disputes and potential future litigation.

Businesses, to stay competitive in this day and age must take advantage of social media accounts to market and promote their companies.  However, this new form of marketing compels employers to take necessary steps to ensure the issues surrounding social media ownership are addressed or risk ending up in court.