Social Media for Utilities: Who Owns Your Connections, Friends & Followers? Pocket Part #5

by Carolyn Elefant on November 18, 2011

in Pocket Parts, Social Media in Regulated Utilities

In my law journal article, Legal Issues and Best Practices for Utilities Engaging Social Media (p. 23), I discussed whether a company’s contacts on LinkedIn are subject to protection as trade secrets when an employee departs the company. As I described, at least one New York court said no, holding that whereas databases may have been protectable in the past, trade secret protection is no longer justified in light of the open nature of sites like LinkedIn and the ease with which contact information can be obtained. Sasqua Group v. Courtney (E.D.N.Y. September 2010).
But since the publication of my article, at least one recent case suggests that companies may have an ownership interest in friends and followers, particularly when an employee cultivated those contacts on the company’s dime.

Earlier this week, Forbes reported on a recent case out of the Northern District of California where a mobile phone review site called PhoneDog sued its former employee, Noah Kravitz, based on his continued use of a Twitter account that the company claims that it owns and contains trade secrets. As an employee, Kravitz tweeted under an account assigned by his employer, though it included his name in the handle (@PhoneDog_Noah). Over four years of employment with the company, Kravitz attracted 17,000 followers.

Kravitz continued to use his PhoneDog account when he left the company, though he changed his handle to @noahkravitz. After asking Kravitz to relinquish the account, PhoneDog sued for $340,000 damages, a figure derived by assigning a value of $2.50 to each of Kravitz’s 17,000 followers. PhoneDog claims ownership of the accounts that Kravitz essentially misappropriated company property and trade secrets when he left. In response, Kravitz argued that he used the account for professional and personal tweeting and that information on followers is not a trade secret since their identity is widely known. The court found sufficient disputes over factual issues (e.g., were the followers personal or professional? do they have any value to the company) to warrant sending the case to trial.

Even with the uncertainty regarding ownership of social media accounts, companies can avoid litigation by addressing account ownership in social media policies. The Forbes article references Dell’s Social Media Policy as an example which provides that:

If you participate in Social Media activities as part of your job at Dell, that account may be considered Dell property. If that account is Dell property, you don’t get to take it with you if you leave the company — meaning you will not try to change the password or the account name or create a similar sounding account or have any ownership of the contacts and connections you have gained through the account. This doesn’t apply to personal accounts that you may access at work, but would certainly apply to all Dell branded accounts created as part of your job.

For utilities, the stakes are much higher when it comes to the question of account ownership. Utilities that use Twitter for crisis communication would lose this tool if an employee were to take the account when departing. Moreover, because utilities are subject to heightened standards for protection of customer data, might a utility be deemed to violate these standards where an employee departs with a Twitter account and then uses it to spam customers with sales pitches from a competitor? Until the question of account ownership is resolved more definitively, utilities should revise their social media policies to address ownership questions up front.

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