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Taking former exec’s LinkedIn account unlawful but nets zero damages

March 15th, 2013  |  Lorene Park

Describing its own ruling as a “mixed bag,” a federal court found that a company committed three separate torts under Pennsylvania law when it took over a discharged executive’s LinkedIn account for two weeks and posted her successor’s image and information on the page (Eagle v Morgan, No. 11-4303, March 12, 2013). Though the executive proved her claims of unauthorized use of name, invasion of privacy, and misappropriation of publicity, her lack of evidence beyond speculation doomed her claim for damages and she took nothing.

LinkedIn account. The executive created a LinkedIn account to promote the company she cofounded, a banking education service, and used it to “foster her reputation” and “build social and professional relationships.” Another employee helped her maintain the account and knew her password. According to the company, the CEO had recommended its employees establish LinkedIn accounts and list the company as their employer. It also claimed it had a policy of taking over employees’ LinkedIn accounts upon termination so it could “mine” the data and incoming traffic. The company was acquired in a buyout and the executive was later terminated. The new owner took over her LinkedIn account, changed her password so that she could not access it, then altered the account profile to replace her name and photo with her successor’s (though the executive’s personal honors, awards and connections remained). As a result, anyone searching for the executive on Google or LinkedIn would be routed to a page featuring her replacement. The executive filed suit, asserting numerous federal and state law claims.

Previously, in an October 4, 2012 ruling, the court granted summary judgment on her Computer Fraud and Abuse Act claim, finding that “[l]oss of business opportunities, particularly such speculative ones as set forth here, were simply not cognizable under the CFAA.” Nor could damage to her reputation and relationships suffice to state a viable claim. The Lanham Act claim fared no better. Because the employer replaced her name and photo on the LinkedIn account, she could not establish a likelihood of confusion, mistake, or deception of a potential customer or member of industry. All that remained were the executive’s tort claims and the company’s counterclaims.

Unauthorized use of name. The executive claimed the company violated 42 Pa.C.S. Sec. 8316, which states that “[a]ny natural person whose name or likeness has commercial value and is used for any commercial or advertising purpose” without written consent may recover damages. A “name” or “likeness” includes attributes that identify the person to an ordinary viewer. “Commercial value” means valuable interest in a person’s name or likeness “developed through the investment of time, effort and money.” “Commercial or advertising purpose” includes “public use or holding out of a person’s name or likeness” in connection with promoting or offering the sale of goods or services.

The court found the executive proved all of the elements of this claim. She presented testimony that the name “Dr. Linda Eagle” has commercial value due to her investment of time and effort developing her reputation in the industry, she is a published authority, has been quoted in other publications, and has presented at conferences. The former CEO testified to her experience and generation of substantial sales. She also established that the company used her name without her consent for commercial or advertising purposes. A person searching either Google or LinkedIn for Dr. Eagle during the time the company controlled her account, by typing in “Linda Eagle,” would be sent to a web page showing her successor’s name and profile. Further, the company derived commercial benefit from using her name to promote its services. As such, the company violated Sec. 8316.

Invasion of privacy. She also proved the company misappropriated her name for its own use or benefit, thereby invading her privacy. Rejecting the company’s argument that it did not use her likeness or credentials on the account page, the court explained that it disregarded the use of her name to initially direct users to the page. The executive had a privacy interest not just in her picture and resume, but in her name, and though the page reflected her successor’s information, the URL still contained her name.

Misappropriation of publicity. The right of publicity is violated by appropriating a person’s name or likeness without authorization and using it to commercial advantage. Contrasting this tort with invasion of privacy, the court explained that “the invasion of privacy by appropriation of name or likeness is a personal right” but the “right of publicity more closely resembles a property right created to protect commercial value.” The facts supporting the court’s conclusion that the company violated Sec. 8316 and invaded the executive’s privacy also supported its finding that the company committed misappropriation of publicity. By using her password to enter her LinkedIn account, changing the password to block her out, and altering the account to reflect her successor’s information, the company deprived her of the commercial benefit of her name.

Identity theft. On the other hand, the executive failed to establish identity theft because she could not show “unlawful possession” of her identifying information. Her name was publicly available and thus not unlawfully possessed by the company. The mere use of her name to direct a user to the company’s website and to keep her from accessing her account, while unscrupulous, was not so clearly an “unlawful” purpose that it was identity theft under 18 Pa. Cons. Stat. Sec. 4120(a). Further, the account page reflected her successor’s identifying information, not hers. The executive’s “Honors and Awards” information, which was left on the page, was not “identifying information.” To the court, a person directed to the page might be confused on how he or she arrived at the page, but would no doubt think the page belonged to the successor.

Conversion. The executive next alleged that by “hijacking” her LinkedIn account, the company committed the tort of conversion. The court rejected this claim, explaining that while other states have expanded the tort to include intangible property, Pennsylvania limited the expansion to “the kind of intangible rights that are customarily merged in, or identified with, a particular document (for example, a deed or stock certificate.)” A LinkedIn account is not tangible chattel, but rather is the right to access a specific page on a computer. Accordingly, the executive could not state a claim for conversion.

Tortious interference with contract. The executive was unable to offer into evidence her contract with LinkedIn, but the court could reasonably infer it from the account’s existence. Moreover, she established that by entering her account and changing her password, the company intended to harm her by preventing that relationship from continuing. Though the company asserted that under its policy, it “owned” its employees’ LinkedIn accounts and could “mine” them for information, no such official policy existed at the time and the LinkedIn user agreement clearly indicated that the individual user owned the account. However, the executive failed to prove actual legal damage or pecuniary loss flowing from the alleged interference and her claim necessarily failed.

Civil conspiracy and aiding and abetting. The executive’s conspiracy claim failed on multiple grounds, primarily due to lack of evidence as to any actions by the individual defendants; the tort requires “two or more persons” by its very nature. Furthermore, the company and its employees, directors, or shareholders “cannot legally conspire under well-established intra-corporate conspiracy doctrine,” the court explained. Nor could she establish the malice element of a conspiracy claim or any actual legal damage. Her civil aiding and abetting claims against the individual defendants failed because she did not provide evidence to support any findings as to their actions.

Damages. Through the testimony of the former CEO of the company (and the executive’s current business partner), the executive attempted to calculate the damages caused by the two-week complete loss of her LinkedIn account and nearly three-month partial loss of access to messages on LinkedIn. She had 4,000 existing LinkedIn contacts to whom she previously sold business. Using data from her lowest sales year, the estimated value of each contact for a two-week period was $62, which multiplied times 4,000 resulted in her estimated loss, at a minimum of $248,000. Considering an average sales year (as opposed to her minimum), the number rose to $500,000.

The court found this legally insufficient, in many respects, to establish damages to a reasonable certainty. First, she did not establish the fact of damages aside from her own self-serving testimony that she regularly maintained business through LinkedIn. She pointed to no contract, client, prospect, or deal that was lost due to her lack of full access to the account. To the court, there was a very real possibility that even with full access she would not have made any deals with her contacts during the time in question.

Even assuming she showed a “fair probability” that she sustained damages, she did not provide a reasonably fair basis for calculating them. Instead, she chose only to present the nonexpert testimony of the former company CEO, who proceeded without referring to any documentation, to “guesstimate” the executive’s annual sales over the previous five years. Furthermore, there was no evidence of a connection between the executive’s figures and the company’s actions with respect to her LinkedIn account. She could not name a single lost customer, deal or transaction. As such, it was “pure guesswork” for the court to determine damages. Accordingly, though the company was liable on three causes of action, the court awarded $0 in compensatory damages.

In addition, the court declined to award punitive damages because the executive failed to prove by a preponderance of evidence that the company acted with maliciousness and reckless indifference. In the court’s view, a reasonable inference could be that its actions were taken under the well-intentioned belief that it owned the account.

Counterclaims. In light of its findings of facts with respect to the executive’s tort claims, the company’s counterclaim for misappropriation with respect to the LinkedIn account was doomed to fail. The company never had a policy of requiring its employees to use LinkedIn, did not dictate the contents of accounts, and did not pay for the accounts. Furthermore, the user agreement with LinkedIn provided that the individual user owned the account. Because the company’s unfair competition claim rested entirely on its misappropriation allegations, that claim also failed.

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