December 6th, 2012 | Lisa Milam-Perez
While social networking has fast become a powerful marketing tool for companies, it’s proven equally valuable to employees as a vehicle for professional development. But the typically ill-defined terms of ownership in an organization’s social media presence, and the significant value that an employee’s own professional stature brings to that presence, can result in proprietary disputes over social networking accounts. Several lawsuits over the past year have tackled the legal issues that arise when these often competing interests collide. Who owns your company Twitter account and its followers, the company or the tweeter? What’s a Twitter account worth, and what—or who—creates its value? One closely watched lawsuit brought these increasingly salient questions to the fore.
The PhoneDog case. In PhoneDog v Kravitz, an employer sued a former employee who continued to use the company Twitter account that he had launched. As a product reviewer/video blogger, the defendant’s job had been to provide written and video commentary via a variety of media, including the PhoneDog website and Twitter account. When he left the company, he simply changed the Twitter account’s handle to his own name, continued to use it, and took his 17,000 followers with him, refusing the company’s demand that he relinquish the use of the password and Twitter account.
PhoneDog asserted claims of misappropriation and conversion as well as intentional and negligent interference with a prospective economic advantage. It argued that the Twitter account contained trade secrets in the form of the subscribers’ names and the account password. As the employer saw it, all “@PhoneDog_Name” Twitter accounts used by company employees, as well as the passwords to such accounts, constituted proprietary, confidential information.
The employer alleged that it suffered $340,000 in damages when its employee absconded with the Twitter account. To reach this calculation, it asserted that according to industry standards, each of the 17,000 followers was valued at $2.50 and that its damages amounted to $42,500 ($2.50 x 17,000) for each month that the defendant continued to use the account. The employee countered that any value attributed to the account came from his efforts in posting tweets and each follower’s interest in following him, not from the account itself.
Whether PhoneDog had any property interest in the Twitter account or the password and follower list, and what the proper valuation methodology would be, could not be resolved on the limited record before it, the court found, refusing to dismiss the case. It was satisfied that the employer had sufficiently described the subject matter of its “trade secret” in likening the list of Twitter followers to a customer list in which a company had an intangible property interest. That was enough for the misappropriation claim to proceed. The employer also claimed that, as a direct and proximate result of the defendant’s conduct, there was decreased traffic to its website, which in turn decreased the number of page views and discouraged advertisers from paying for ads on its site. As such, PhoneDog sufficiently alleged a claim for intentional interference with prospective economic advantage as well.
The parties settled the dispute this week. The terms were undisclosed—leaving us to ponder still the value of a Twitter account and its followers. But Noah Kravitz, the defendant employee in the case, offered sage advice for employers in a statement announcing the deal. “In retrospect I’m sure we all wish we’d been able to foresee what was coming and negotiate specific terms ahead of time,” Kravitz said. “Good contracts and specific work agreements are important, and the responsibility for constructing them lies with both parties. Work it out ahead of time so you can focus on doing good work together—that’s the most important thing.”
Stake the company’s claim. Employers can avoid these proprietary squabbles—over Twitter, Facebook, LinkedIn, and any other social networking sites—by:
- • Stating in your social media policy that the accounts, their related passwords, and their “friends” and followers are the property of the organization;
• Requiring employees to affirm in writing their understanding that they maintain or administer your site as part of their job and, as such, all control over the accounts and passwords reverts to the company upon their departure, voluntary or involuntary;
• Adopting uniform branding, content and style guidelines, and usage policies across the organization to minimize excess personalization;
• Assigning more than one employee to serve as administrators of each of the organization’s social networking accounts;
• Demanding that all social networking account information and passwords are also in the possession of the site administrator’s manager;
“If anything good has come of this,” Kravitz added, “I hope it’s that other employees and employers out there can recognize the importance of social media to companies and individuals both.” Social media accounts are key corporate assets. Take proactive measures to protect them.