SI Review: May 2012

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Benefit of Counsel

Keep Your “Friends” Close

How to protect employers’ ownership interests in their corporate social media efforts

By Amy D. Hartwig and Steven A. Nigh

The growing popularity of social media use among consumers has been followed by a growth in social media use among businesses. A recent University of Maryland study found that social media adoption among small businesses doubled from 2009 to 2010. But who spends the time posting, tweeting, blogging and updating these corporate accounts?

Whether that person is an employee or a contingent worker, a pending federal case highlights the possible dangers of having employees — whether they’re temporary or permanent — run their employers’ social media operation.

The PhoneDog Case

In PhoneDog LLC v. Kravitz, an employer sued a former employee who allegedly swiped a corporate Twitter account on his way out the door. PhoneDog, the employer, reviews mobile phone-related products and services, and posts articles and video reviews on its website.

PhoneDog uses social media to “market and promote its services” and to drive consumers to its website. The increased website traffic results in higher advertising revenue. PhoneDog, therefore, requested that all of its employees open Twitter accounts and tweet about PhoneDog and its services. The employee accounts had a common format for their names: @PhoneDog_Name.

Noah Kravitz worked as a product reviewer and video blogger for PhoneDog and amassed around 17,000 Twitter followers under the @PhoneDog_Noah handle. Kravitz left PhoneDog and changed his handle to @noahkravitz — but kept the 17,000 followers, the company alleges. Kravitz ultimately landed a job with one of PhoneDog’s competitors, but he kept on communicating with PhoneDog’s followers via the Twitter account PhoneDog claims.

PhoneDog subsequently sued Kravitz for $340,000, alleging that the passwords to its Twitter accounts were trade secrets that Kravitz stole, causing it lost advertising revenue and current and prospective consumers of its services.

PhoneDog’s suit recently survived a motion to dismiss, which means that the court believes there may be a legal basis for PhoneDog’s claims. The court’s ruling also means that it believes PhoneDog’s claims that Kravitz interfered with its current and prospective economic relationships with the Twitter followers of the @PhoneDog_Noah account and advertisers.

What Should Employers Do?

While the law relating to social media use in the workplace is still developing, employers should consider taking steps to strengthen their claim that they — not their employees — own all aspects of their corporate social media presence. These steps might include the following:

  • allowing corporate social media accounts to be opened only at the company’s direction and only with a company-issued password;
  • controlling access to social media account passwords;
  • changing account passwords and/or usernames, or deactivating accounts when the employment relationship ends;
  • explicitly stating in employee handbooks, employment contracts (such as confidentiality agreements), and independent contractor agreements that the employer owns its corporate accounts (and any legal rights that might come with those accounts), even when employees or contractors operate those accounts;
  • requiring that the company be identified in any account name or handle, or prescribing a common name format (e.g., @Company- Name_UserName); and
  • requiring employees to disclose their affiliation with the company in every post or tweet they publish.

Taking these steps might help establish corporate ownership of the employer’s social media presence and the fruits of that presence. That said, until the law has developed more, it will be uncertain how much is enough to establish corporate ownership of social media. Employers who have questions about implementing social media in their business should contact their counsel to get timely guidance on the legal issues that accompany social media use.

Amy D. Hartwig is a partner and Steven A. Nigh is an associate with the law firm of Michael Best & Friedrich LLP (www.michaelbest.com). They represent employers in labor, employment and benefits law matters.

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