Social Media for Businesses — Who Owns the Followers?

Evynne Grover, AVP Claims Practice Leader – Media Liability

Introduction

A lawsuit filed in August of 2018 by a newspaper publisher against its former journalist employee raises several issues regarding the ownership of social media followers acquired during an employee’s term of employment. According to the complaint filed in the US District Court for the Western District of Virginia, when journalist Andy Bitter first commenced employment as a staff writer for a newspaper to focus on Virginia Tech athletics, he was handed the password and account information for the Twitter account used by his predecessor at the newspaper. The Complaint alleges that Mr. Bitter utilized the Twitter account as part of his employment with the newspaper over many years, until he resigned and went to work for a competitor, Athletic Media Group (“AMG”).

Notably, instead of transferring the Twitter account information and password to his employer upon exiting the newspaper, he continued to use the Twitter account, only now in his role with AMG. BH Media, Group, Inc. (“BHM”), the owner of the newspaper, sued Mr. Bitter contending that his continued use of the Twitter account in his new role is contrary to the Employee Handbook’s requirement that employees return company-owned information assets upon termination of employment, and violates a myriad of federal and state laws, as well as common law.

The Business of Social Media

BHM’s complaint is instructive in demonstrating the vital relevance of social media to businesses. Social media outlets, including Twitter, provide a platform for businesses to advertise their brands and services, attract followers who may be current or potential customers, and drive direct customer engagement. On Twitter, the account owner has the sole ability to view the account’s Twitter feed, which displays the posts and re-Tweets of its followers, and also has the sole ability to send direct messages to the followers. Therefore, the account owner is in the unique position of being able to directly communicate with, and glean data from, actual and prospective customers, which is an opportunity not generally available from outside sources. BHM also contends its Twitter account is intended to steer online traffic to the Times’ website, where page views and clicks on stories and content directly correlate to the amount of advertising revenue BHM receives.

The Employer’s Perspective

According to BHM, the Twitter account’s 27,100 followers are essentially a confidential customer list that constitutes a trade secret and that appropriation of the account and those followers violates both the federal Defend Trade Secrets Act (18 USC § 1836) and the Virginia Uniform Trade Secrets Act (Va. Code § 59.1-336). BHM argues that, as a result, it has suffered the loss of customers, opportunities and advertising revenue. It asserts that the unique nature of the follower list is nearly impossible to recreate and, even if it created a new Twitter account and hired someone to attempt to re-engage the followers, it is questionable whether the followers would choose to follow the new account, or whether their future engagement would be comparable.

BHM argues that Mr. Bitter has taken that list of customers and potential customers and is now using it for direct marketing of the products and services of AGM, a direct competitor of BHM, and that such taking and use constitutes common law conversion and a breach of his fiduciary duties. BHM also asserts that Mr. Bitter’s use of the Twitter account after his resignation violates the Computer Fraud and Abuse Act, 18 USC § 1030, et seq., the Stored Communications Act, 18 USC § 2701, et seq., and the Virginia Computer Crimes Act, Va. Code § 18.2-152.2, et seq.

The Employee’s Perspective

In his Answer and Counterclaim, Mr. Bitter denied numerous factual allegations of the Complaint. Significantly, he contended that the Twitter account and log in information were transferred to him directly by his predecessor at the newspaper via their personal email accounts, and that the Twitter account has never been owned, controlled or accessed by BHM. Further, Mr. Bitter contends that no other BHM employee has ever posted to, requested or received access to any direct message from, or sent and received direct messages from the Twitter account. In addition, Mr. Bitter asserts a claim of defamation against BHM arising out of an article in the Roanoke Times reporting on the lawsuit.¹

Prior Case Insight

There is a dearth of case law on the issue but some cases contain judicial discussion that may provide guidance. Back in 2011, the cell phone news and review website PhoneDog filed a lawsuit in the US District Court for the Northern District of California against its former product review and video blogger employee, Noah Kravitz, with allegations similar to those in the BHM case. PhoneDog alleged that it provided Mr. Kravitz with a PhoneDog corporate Twitter account, which he used in furtherance of his employment with PhoneDog while accumulating approximately 17,000 followers, but that upon his resignation, Mr. Kravitz failed to return the Twitter account to PhoneDog. Instead, Mr. Kravitz changed the name on the Twitter account to his individual name and eventually used the Twitter account to market and advertise the services of his new employer, a direct competitor of PhoneDog, to those Twitter followers.

PhoneDog framed its allegations as misappropriation of trade secrets in violation of California’s Trade Secrets Act, intentional and negligent interference with prospective economic advantage, and conversion. PhoneDog claimed damage to its business reputation and goodwill, loss of users, and loss of opportunities. In addition, PhoneDog noted that its advertising revenue was tied to page views generated from users visiting PhoneDog’s website. PhoneDog explicitly valued the followers at $2.50 per month in suggesting a measure of financial damages. The court declined to dismiss the trade secrets claim, finding that consideration of whether the followers of an account constitutes trade secrets requires factual inquiry. The parties settled the case on confidential terms, with Mr. Kravitz retaining custody of the Twitter account.

CDM Media USA, Inc. filed a complaint in 2015 in the US District Court for the Northern District of Illinois, Eastern Division, against its former employee, Robert Simms. CDM contended it created a LinkedIn group which was a private online community comprised of chief information officers and senior IT executives, and appointed Mr. Simms the administrator of the LinkedIn group. Apparently, Mr. Simms resigned from CDM and failed to return access to the LinkedIn group to CDM. Instead, CDM complains, Mr. Simms commenced employment with a competitor, and used the LinkedIn group in his role with his new employer to solicit current and potential customers and vendors of CDM.

CDM asserted claims of breach of contract, violation of the Illinois Trade Secrets Act, and common law misappropriation. The court allowed the trade secrets claim to proceed, noting that the complaint “plausibly alleged” that the LinkedIn group’s membership list was a “valuable secret commodity.” However, the court rejected CDM’s argument that private messages in the LinkedIn group were trade secrets. This matter was also settled before we could obtain more thorough court insight.

Other Perspectives and Considerations

With the prevalence of social media in business, many individuals, including journalists, social media managers, entertainers, and influencers, find that their substantial social media following is a prerequisite to getting hired. They may view their followers as their individual “fans” rather than “followers” of their employer. These individuals will likely use their social media accounts to enrich and direct traffic to their new employers while also accumulating new followers during their terms of employment.

The conflicting perspectives raise numerous questions. Does the employer have an ownership interest in those followers, even though the account is owned by an individual who brought his or her previously-attained followers to the employer? Is the individual enriched by the gain in individual followers if he or she leaves and takes the followers to a new employer? How are those followers valued, and what terms need to be in place to govern the rights and obligations of the parties on both sides? Even if these issues are resolved, how does such resolution stand up in the face of laws enacted in some states that limit a company’s ability to request user names and passwords for social media accounts? These questions will likely evolve over time as social media evolves and wind their way through various courts before a consensus is reached.

Conclusion

As social media becomes more intertwined in the fabric of business, it is critical to seek legal advice regarding the practicalities of its use and the consideration of developing forward-thinking policies and procedures. While it has become more common for businesses to establish social media policies, it is equally important to update those policies in step with the evolution of social media technology and practice, case law, and applicable federal and state laws.