Litigation is usually not an enjoyable process for any party in the lawsuit. And, it is even more frustrating when litigation could have been avoided with some simple pre-planning and attention to details. This is particularly true with respect to litigation regarding ownership of social media contacts, profiles, and groups.
Take for example the recent case in federal court in Illinois where, according to court records, “CDM Media USA, Inc. sued its former employee, Robert Simms, for refusing to transfer control of a LinkedIn group the company said it owned. CDM also alleged that Simms wrongfully held onto the company’s confidential information after he left the company, which he used in competition with his former employer.” Specifically, Simms managed a LinkedIn group started by the company for its customers and potential customers consisting of mainly Chief Information Officers and IT professionals. When Simms separated from the company, CDM wanted to have a different employee manage the LinkedIn group. CDM also wanted Simms to return information he had gathered as the manager of the LinkedIn group, including contact names, contact information, and other information he had obtained. Simms refused to cooperate and did not complete the paperwork necessary for the transfer. Worse, CDM alleged that Simms used much of this information when he went to work for a competitor.
CDM brought several claims against Simms, including breach of contract, misappropriation, and violation of Illinois’ trade secret act. Simms denied that CDM’s claims had merit. Early in the litigation process, Simms filed a Motion to Dismiss. The court granted in part and denied in part, the Motion. Importantly, the court noted that CDM had done enough at the early stage of the lawsuit to bring a misappropriation claim regarding Simms’ maintaining control over the LinkedIn group’s membership list. Furthermore, the court pointed out that no prior agreement between CDM and Simms existed regarding to control or ownership of the LinkedIn group. The court’s Memorandum Opinion and Order on the Motion to Dismiss in CDM Media USA, Inc. v. Simms can be found here.
In some ways, this case is similar, but opposite, to the Eagle v. Morgan case I wrote about in my post titled: “Employer vs. Employee: Post-Employment LinkedIn Contacts Ownership”. In the Eagle case, during her employment, Linda Eagle had provided to her employer, Edcomm, her LinkedIn password, had let other Edcomm employees post on her profile, and had connected with over 4,000 people. After Eagle’s termination, Edcomm maintained Eagle’s LinkedIn account, changed the password, profile picture, and credential’s of “Linda Eagle” to those of Sandi Morgan, the interim CEO of Edcomm. The court found that Eagle’s LinkedIn account belonged to her, and not Edcomm, and in its analysis, the court relied heavily on LinkedIn’s User Agreement at the time which provided: “If you are using LinkedIn on behalf of a company or other legal entity, you are nevertheless individually bound by this Agreement even if your company has a separate agreement with us.” Importantly, Edcomm did not have a specific policy about employee LinkedIn use for work-related purposes, though it did encourage employees to use LinkedIn for business development. When Eagle’s employment was terminated, she did not have a written agreement concerning her LinkedIn account.
These lawsuits are also similar to the case of Mattocks v. Black Entertainment Television, LLC. where an employee sued her former employer regarding the ownership of a Facebook fan page and up to 6 million “Likes.” I analyzed this case in my February 5, 2015 post cleverly titled “Employee Sues Employer Over Ownership of 6 Million ‘Likes'”.
Some Tips For Avoiding Litigation:
Admittedly, I have written about these tips before. However, they need repeating given the day-to-day questions that come up regarding social media profiles, groups, and ownership.
1. First and foremost, employers should have a social media policy. And, with respect to LinkedIn and contacts, the policy should spell out the expectations the employer has regarding employee use of LinkedIn for company purposes, ownership of contact information, and procedures for updating the company of any additional client information the employee receives (for example, direct phone numbers, home phone numbers, home addresses, personal email addresses, etc.). Simply, the company should put in place policies and procedures for updating the company’s central client database, rather than having important client information resting solely in various LinkedIn accounts of numerous employees.
2. Second, employers should consider entering into agreements with employees early in the employment relationship regarding the ownership of contacts/client information, and what is considered an inappropriate use of contact information during employment. Same goes for company created/sponsored “Groups” and/or Fan Pages and the like. The agreement should also clearly acknowledge that at least one other person will always know the login credentials, and if any passwords are changed, both folks need to know about it.
3. Since one of the biggest social media risks for employers involves departing employees, it is crucial for employers to put in place policies and agreements that focus on post-employment use of social media. Such post-employment provisions should include instructions/deadlines for an employee to update LinkedIn profile information, whether the employer requires former employees to delete or “disconnect” LinkedIn connections previously made solely because of the employer, and non-solicitation and non-competition agreements as allowed by law. Non-solicitation agreements can be useful to prevent former employees from soliciting the employer’s customers/clients, vendors and even other employees to work for a competing business. The more “reasonable” such provisions are, the more likely they will be enforced. And, non-solicitation agreements are much more likely to be enforced than blanket non-compete agreements. These types of agreements are particularly important because the LinkedIn user agreement affirms that each person’s profile belongs to that user, and not to a third party. Thus, by getting these other various agreements/policies in place with their employees, employers can still help shape how an employee may use (and what may remain in) their individual LinkedIn profiles after they depart the company.
4. Finally, employers should expand (or start using) Trade Secret/Confidentiality/Non-Disclosure Agreements with their employees to protect the confidential information the employee learns while employed by the company. If client information truly is under lock and key, then a Confidentiality/N0n-Disclosure Agreement will a) help keep that information confidential during and after the employee’s employment; and b) demonstrate to any court that the company took many steps to preserve the value (confidentiality) of the client information. In other words, if the company takes no steps whatsoever to preserve confidentiality, the company will have tremendous difficulty persuading a court that the information is vital to its business and that public dissemination would harm the company.
DISCLAIMER: Information provided on this website is not legal advice, and it does not create an attorney-client relationship, nor should you act on anything stated in this article without conferring with the Author or other legal counsel regarding your specific situation.