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On the termination of employment, a critical issue arises in respect to the ownership of twitter, LinkedIn and other social media accounts in circumstances where these accounts have been used as a means of generating business or establishing client contacts. Again the law is developing both in Australia and abroad so it is likely that things will be clearer in years to come.

The Vatican provides a useful insight into the importance of Twitter accounts. When Pope Benedict XVI vacated his position, it has been reported that he left behind more than 2,000,000 Twitter followers. However, on his departure from office he ceased to use his Twitter account with the handle @Pontifex. With extraordinary foresight, the Vatican set up the Twitter account so that it would expressly belong to the papacy and not to the individual Pope.

However, this approach is not common and in an employment context it is also unlikely. The question of whether there is any “property” in a Twitter account or a LinkedIn account is vexed. The right to use such accounts depends to a large degree on the “Terms of Use” set out by the various social media companies.

These matters were the subject of an interesting case US of PhoneDog v Kravitz. PhoneDog is a web based company. It had assisted its employee (Mr Kravitz) to set up a Twitter account with the handle “@PhoneDog_Noah” which he used to disseminate information and promote the company’s services. During his employment he attracted 17,000 followers. On leaving the company, Mr Kravitz simply changed his “handle” to “@noahkravitz” and continued using the account.

The company sued him for misappropriation of trade secrets and conversion amongst other things. It claimed that it had suffered damage to the value of $340,000 as a result of Kravitz’s unauthorised use of the Twitter account (calculating its damage at $2.50 per Twitter follower).

For his part, Kravitz contended that PhoneDog had no property tights in the Twitter account and his followers. He also relied on the “terms of service” for Twitter which included a term that the account was the “exclusive property of Twitter and its licensors”.

Unfortunately (or fortunately for the parties) this case settled out of Court but it remains a significant signpost to employers who assume they automatically have some rights to use their employee’s Twitter accounts absent any formal agreement with their employees.

Commentators have suggested that in future years to come where high profile employees come with an established Twitter or LinkedIn following, it may be very difficult for employers to argue that they have any rights to use, manage or retain the use of such accounts. But for now, employers are still heavily involved in assisting employees to set up and manage these types of accounts. For example, it is not uncommon nowadays for junior staff members to be engaged to write “tweets” for senior employers or otherwise post articles and other information to LinkedIn. In this way LinkedIn and other accounts may take on more characteristics of being the property of the employer. However, without an express agreement this is not obviously the case.

The question of who “owns” Twitter followers is likely to be viewed differently to other clients of a company. Twitter followers do not have many characteristics of other clients in that their only connection to a person or business may be that they follow their “tweets”. They do not receive any other services from the person or company. In such circumstances, it is hard to easily ascribe a value to these “followers”.

Ownership of LinkedIn accounts on termination of employment has become a hot issue in Australia with companies who use this platform to generate business.

The case of Naiman Clarke is currently before the Court. This matter involves an employee (Ms Tuccia) of a recruitment firm (Naiman Clarke) allegedly using her LinkedIn connections in her subsequent employment with two separate employers. This matter is yet to be decided but it is hoped that it will provide important guidance to employers on their rights in respect of LinkedIn accounts on termination of employment.

Until then, the position of employers will be clarified by clear policies on social media use including after termination of employment. Absent such policies, employers cannot assume some rights in the social media accounts of their employees even when such accounts have a strong relationship to the employee’s employment.

Non Solicitation and Non Compete Clauses

In an earlier newsletter, I discussed the case of Planet Fitness in which the Supreme Court of NSW considered a restraint which applied to a personal trainer who was an independent contractor with Planet Fitness. She was subject to a three month restraint preventing her from “directly or indirectly” soliciting the business of anyone who was a client of Planet Fitness.

Perhaps unsurprisingly, after her relationship with Planet Fitness ended, Ms Dunlop was engaged by other gyms (who were also sued in the case) and those gyms began offering discounts to people she had previously trained. She also posted messages to her Facebook page updating her new work details and advising of the various “deals” on offer. Many of her Facebook friends were clients of Planet Fitness.

The case includes a detailed consideration of what it means to “solicit” work. The Court noted that in many cases it will be the client who first initiates the contact but what occurs next can be relevant. The Court also held that the status of the client’s relationship with the existing employer was relevant. Ultimately, the Court was satisfied that Ms Dunlop had breached her restraint and ordered her to cease from any further attempts to solicit custom from clients of Planet Fitness.

However, in that case Ms Dunlop had taken some positive steps to obtain work by offering deals and so on.

Things are more complicated when considering LinkedIn.

When an employee notifies a change of employer on their LinkedIn account, their new details are automatically shared (without any other positive steps from the employee) with all of their “connections” which may well include many of the clients of their former employer.

It is very common for employers to require that their employees cease to identify themselves as having any association with the employer after termination. This may necessarily involve changing employment status on LinkedIn and other digital profiles.

A solution to this conundrum would be to request that employees not list themselves as employees of your company on any social media sites during their employment. This may work for junior employees but it will not work for those companies who seek to use social media (and specifically social media through their employees) to generate business.

The obvious upshot from the risks outlined above is that employer and employees must carefully negotiate non-competition and non-solicitation clauses with respect to social media. Some commentators recommend that there should be a solid agreement as to what employees can do on the termination of their employment with respect to their social media accounts.

If LinkedIn and other platforms are regularly used, this approach seems both advisable and necessary.

To discuss the impact of social media and your business contact Leonie Kyriacou on l.kyriacou@pigott.com.au

This paper and accompanying seminar provide a summary only of the subject matter covered, without the assumption of a duty of care by Pigott Stinson Lawyers. The summary is not intended to be nor should it be relied upon as a substitute for legal or other professional advice. Copyright in this paper and any related seminar is owned by Pigott Stinson Lawyers.