Shapiro, Lifschitz & Schram

"There is no one I’d rather have leading the fight when our financial future depends on winning."

Alan W. Slepian, Esq. – Formerly Assistant General Counsel of PG&E National Energy Group


The answer is “maybe yes”, according to two fairly recent pending lawsuits that highlight some of the challenges businesses are facing when it comes to protecting trade secrets, company information and other business assets. 

In the currently pending PhoneDog vs. Kravitz, an employer and former employee fought over who owns a company-sponsored Twitter account.  The employee opened the Twitter account with the support of his employer, but after his employment was terminated, he continued to use the account but under a different name.  Specifically, the case involves PhoneDog, “an ‘interactive mobile news and reviews web resource’ that reviews mobile products and services and provides users with resources needed to research, compare prices, and shop,” against the former employee Noah Kravitz, who was hired to be a product reviewer and video blogger for the site.

According to PhoneDog’s complaint, Kravitz was provided with a Twitter account which he used to promote the website’s services.  After Kravitz left the company, the suit alleged he negligently interfered with the company’s prospective business through misuse of the Twitter account that had at the time 17,000 followers/customers.  PhoneDog argued that it opened the Twitter account, or instructed Kravitz to do so, in order to drive viewers to its website and that the loss of the Twitter account’s followers as a result of Kravitz’s misappropriation of the account effectively reduced the value of the website to the various advertisers that purchased space on the site.

Kravitz contended that PhoneDog had not property rights in the Twitter account or its followers and twice moved to dismiss the lawsuit.  The court denied the motion both times, asserting that it was persuaded that PhoneDog had sufficiently alleged economic harm by the diversion of the 17,000 followers when Kravitz misused the account and disrupted the company’s relationship with at least one advertiser. The court is still deciding whether PhoneDog will ultimately be able to establish a property interest in the Twitter account, the password, or the followers.

Now, LinkedIn has joined Twitter in a similar claim.  In Eagle vs. Edcomm, also currently pending, the plaintiff Linda Eagle, the former CEO and founder of the defendant company Edcomm, sued Edcomm for taking over her LinkedIn account.  Specifically, she alleged that Edcomm violated the Computer Fraud and Abuse Act (“CFAA”) when, after terminating her employment, Edcomm changed the password on her account and replaced her information with the information of her successor, but left in place all of the information relating to Ms. Eagle’s honors, awards, recommendations and connections.  Edcomm has counterclaimed alleging violation of the same CFAA against Eagle, and Eagle moved to dismiss.  The court declined to dismiss the counterclaim alleging misappropriation of Eagle’s LinkedIn account and connections.  It found that an issue of fact existed due to Edcomm’s argument that its “personnel, not Eagle, developed and maintained all connections and much of the content on the LinkedIn account, actions that were taken solely at Edcomm’s expense and exclusively for its own benefit.”
So what does this mean? That there needs to be written agreements and policies in place that set forth the rights of the employee and employer vis-à-vis social media. 

A simple restrictive covenant or provision added to the employment manual from your Technlogy & ESI Counsel can go a very long way in protecting your company’s reputation and business trade secrets from a scorned former employee.  Something as simple as: “During the term of Employee's employement with Company and after termination of such employment, unless authorized in writing by Company, Employee will not upload, enter or submit Proprietary Company Information on or into any computer, system, platform, or storage media not controlled by the Company, and such prohibited locations include, without limitation, personal computers as well as any Internet platforms or websites commonly referred to as social media or social networking sites (e.g., LinkedIn, Twitter or Facebook)." 

This post provides only an overview of this issue and does not constitute legal advice to any individual or company.  As always, employers should consult an experienced Technology & ESI Counsel or Data Management attorney regarding questions about updating policies and employment agreements, including updates to consider social media.

Did You Know . . .

Members of the SLS trial group have tried in excess of 50 jury trials and 75 bench trials?

The SLS construction group has worked on sports stadiums across the country including Orioles Park in Baltimore and Paul Brown Stadium in Cincinnati?

The SLS construction group has worked on power plant projects across the country?

In 2007 SLS was selected for an Honorable Mention as one of the Best Places To Work in Washington DC?

Ron Shapiro, Steve Schram and Judd Lifschitz have all been selected as SuperLawyers by Law and Politics?

The SLS office building is an historic townhouse constructed in the late 1800s?

SLS has been selected by Martindale-Hubbell as a Preeminent Law Firm?

SLS trial lawyers have argued appeals in the U.S. Circuit Courts of Appeal for the 4th, 5th, 9th, D.C. and Federal Circuit?

SLS trial lawyers have been lead trial counsel in cases in Arizona, California, District of Columbia, Florida, Louisiana, Maryland, New Jersey, New York, North Carolina, Oregon, Texas, and Virginia, - to name just a few?

Virtually all the cases that SLS trial lawyers mediated have been favorably settled at mediation?

The transactional group at SLS was lead counsel on one of the largest, most complex mixed-use projects in downtown Washington, DC involving 4 lenders and 6 property owners?

In appreciation for the outstanding efforts of each of its employees during 2007, SLS gave everyone (attorneys, paralegals, and staff) a 4 day/3 night expense paid trip to Key West, Florida?

The transactional group at SLS has represented tenants in more than 200 retail leases in the Mid-Atlantic region?

Every attorney in the transactional group at SLS has at least 15 years experience?

The transactional group at SLS has represented developers in the purchase, construction, financing and/or sale of more than 75 multi-family apartment projects?

The transactional group at SLS has represented real estate investors and developers with respect to property in Pennsylvania, West Virginia, Delaware, Maryland, the District of Columbia, Virginia, North Carolina, South Carolina, Georgia, Florida, Texas, Tennessee, Michigan and the U.S. Virginia Islands?

Attorneys in the transactional group at SLS have represented eight national banks in commercial real estate loans?

Attorneys in the transactional group at SLS have represented the FDIC, the Resolution Trust Corporation and several banking institutions in loan workout transactions throughout the Mid-Atlantic region?

The transactional group at SLS has represented homebuilders and commercial real estate developers in work-outs of individual loans and also for work-outs of large portfolios involving dozens of properties in several states?

The trial lawyers of SLS have numerous reported decisions to their credit?