Articles
November 18, 2020

2020 Update: Can your social media (e.g., LinkedIn) contacts be your employer’s trade secret?

Maybe

Employers and employees alike use social media to promote and define their businesses and themselves in the digital space. From personal connections on Facebook, to professional marketing on LinkedIn, these connections on social networks are hugely important and valuable both to the employer and employee.

Given the heightened interest that both employees and employers have in their digital presence, courts have begun to grapple with the difficult issue of who actually owns these social media accounts. Companies believe that employees should not be permitted to misappropriate the valuable goodwill and customer relationships, while employees believe they have a right to retain the business relationships they developed through their social media platforms. Courts have been asked to decide whether an employee’s social media contacts can qualify as the employer’s trade secret.

In December, 2011, a Pennsylvania federal court answered this question in the negative. In the case of Eagle v. Morgan, Linda Eagle, the founder of a company, Edcomm, had developed a significant LinkedIn presence closely connected to Edcomm. In 2010, Edcomm was purchased. In 2011, she was terminated and Edcomm took over her LinkedIn account. She sued Edcomm. Shortly thereafter, she regained control of her LinkedIn account and refused to return it to Edcomm. Edcomm counterclaimed against her in her lawsuit, contending that by regaining control of the LinkedIn account and refusing to return it to Edcomm, she had misappropriated Edcomm’s trade secrets. She moved to dismiss Edcomm’s misappropriation claim. With little analysis, the court dismissed the claim, stating that the LinkedIn contacts on the Eagle/Edcomm account were “generally known . . . or capable of being easily derived from public information.”

In September 2018, a Virginia federal court reached the same conclusion as it related to a former employee’s Twitter account. In BH Media Group v. Bitter, a newspaper sued a former reporter for taking a Twitter account he had used while employed at the newspaper with him. The newspaper claimed that the Twitter account and the followers the reporter had on his account were the newspaper’s trade secrets. The newspaper compared the account followers to a customer list, which courts have historically found can qualify as protected trade secrets. At a preliminary injunction hearing, the court rejected the newspaper’s arguments, finding that the newspaper had failed to establish that the account followers qualified as a trade secret. In finding no trade secret, the court relied in part on “the public nature of the Twitter content and followers.”

In March, 2012, a Colorado federal court came to a different conclusion. In Christou, et al. v. Beatport, LLC, a nightclub company sued an ex-employee for stealing the company’s MySpace “friends” list. The ex-employee moved to dismiss the lawsuit, arguing that a MySpace “friends” list couldn’t be a trade secret. The court denied the ex-employee’s motion, holding that a company’s MySpace profiles and friends list can be a trade secret because, online, a MySpace profile contains a lot more information than just the “friend’s” name. It gives the owner of the profile the “friend’s” personal information, including interests, preferences, and contact information that can have commercial value. It allows the “friend” to be contacted and advertised to. This information goes beyond what is publicly available. Duplicating all the information available from the “friends” list would be time-consuming and costly. The public can see the names of the company’s “friends” online, but the public does not have all the other information that the company gets by virtue of having these “friends.”

In September, 2014, another federal court held that LinkedIn contacts could be a trade secret. In Cellular Accessories For Less, Inc. v. Trinitas, LLC, a company sued an ex-employee who had left to form a competing company and taken his LinkedIn contacts with him. The ex-employee moved for dismissal of the lawsuit. The court denied his motion, holding that the LinkedIn contacts that he had developed while working for his former company could be the company’s trade secret. The company had encouraged the employee to develop LinkedIn contacts during the employment. The court said that the LinkedIn contacts may – or may not – have been viewable by other LinkedIn users; the ex-employee’s motion papers did not say whether the contacts were publicly viewable. Since they may not have been publicly viewable, they could be the company’s trade secrets.

Given the unsettled nature of these issues, as well as the rise in trade secret litigation across the country, courts will likely continue to provide conflicting answers as to how to categorize employees’ social media accounts. Employers and employees should think carefully about these issues, in particular (1) at the time when an employee opens a social media account that he or she uses to promote the company’s business, and (2) when that employee departs from the company and may want to bring the account, and its valuable followers, with him or her. If the employer believes that the account is the company’s property, it should make that clear to the departing employee before he or she leaves and takes the login credentials with him or her. Note: many employers are now specifically including limitations on post-employment social media activity by the ex-employee in their non-compete and non-solicitations agreements at the outset of the employment, to address and avoid issues and disagreements post-employment.

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