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Trading Secrets A Law Blog on Trade Secrets, Non-Competes, and Computer Fraud

Federal Court Questions Whether Damages Exist in LinkedIn Account Ownership Dispute

Posted in Social Media, Trade Secrets

By Jessica Mendelson and Robert Milligan

The ownership of social media accounts in the employment context remains a very hot topic. 

In fact, you might remember the case of Eagle v. Morgan, Case No. 11-4303, E.D.Pa., a heavily disputed case regarding the ownership of a company LinkedIn account, which we’ve blogged about previously.  In a post-trial hearing last week, the federal district court judge suggested that the LinkedIn account may have belonged to Eagle, however, there were no actual damages for her former employer’s alleged unlawful access of the account, and thus, Eagle’s claim against her former employer was unlikely to succeed.

Linda Eagle, the former CEO of a banking education company sued her former employer Edcomm following her termination, after Edcomm allegedly changed the password for her LinkedIn account, preventing her from accessing it, and then replaced her name and photo with that of Sandy Morgan, Eagle’s replacement.  In October 2012, the U.S. District Court for the Eastern District of Pennsylvania granted the defendants’ motion for summary judgment on Eagle’s Computer Fraud and Abuse Act and Lanham Act claims. The court denied summary judgment with respect to the state claims asserted by Eagle and retained jurisdiction over state law claims for invasion of privacy by misappropriation of identity, tortious interference with contract, unauthorized use of name in violation of Pa. C.S. § 8316, misappropriation of publicity, identity theft under Pa. C.S. § 8316, conversion, civil conspiracy, and civil aiding and abetting.  A bench trial was held in November 2012, however, the record is still under seal and has yet to be released to the public.

In a hearing on post-trial motions on February 20, 2013, U.S. District Court Judge Ronald Buckwalter of the Eastern District of Pennsylvania reportedly suggested EdComm likely did not have a right to prevent Eagle from accessing her LinkedIn account.  In explaining this, Judge Buckwalter cited the fact that EdComm did not have a policy requiring employees to hand over ownership of their social media profiles, even if they were used to solicit new business.  During the hearing Judge Buckwalter reporedly told Edcomm’s attorney, “These LinkedIn accounts belonged to individual employees and there’s nothing to suggest otherwise.  What justification did you have for doing what you did?  I don’t see how you can justify what you did here.”  Despite the lack of justification, Judge Buckwalter had difficulty finding actual damages, reportedly calling claims that she had suffered a loss of unspecified business opportunities due to her inability to access messages sent to her through her LinkedIn account “highly speculative.”  Judge Buckwalter reportedly stated that he had great difficulty believing Ms. Eagle had actually suffered damages from her inability to access the LinkedIn account. Although Judge Buckwalter has yet to issue a final decision, his comments at the hearing suggest he is unlikely to rule on Eagle’s behalf but no final decision has been made.

The case serves as a reminder that employers need to be proactive and develop social media policies and ownership agreements concerning social media accounts before the need actually arises. Agreements and policies should establish who owns the company social media account, and specify a procedure for returning login information upon termination. Employees should be reminded of the agreements and policies at the time of termination and employers should ensure that they obtain the relevant usernames and passwords. Additionally, the company should register or create the account, and change the password at the time of termination in order to avoid confusion. Agreements and control over the account are key in such disputes, as they are determinative to who actually owns the account.

We will continue to keep you apprised of future developments in this case and similar social media ownership/trade secret issues.