What rights do employers have over employees’ social media accounts in light of LinkedIn/CFAA ruling?

by Gray Reed & McGraw

Earlier this month, a federal judge ruled that when a company took over a departing employee’s LinkedIn account, the company did not violate the Computer Fraud and Abuse Act in the case of Eagle v. Edcomm.

I blogged about this case in my prior post Who Owns Your Twitter Followers and LinkedIn Connections?  While the ruling has gotten some publicity (The Technology and Marketing Law Blog’s, Kevin O’ Keefe and Ars Technica), it certainly does not answer the question of who owns the LinkedIn account and what rights do employers have.  The narrow ruling on the CFAA clarifies the application of the statute designed for hackers, but doesn’t come close to resolving what a simple agreement would solve.

Background of the Case

Linda Eagle had a “personal” LinkedIn account with thousands of connections related to her banking education business–Edcomm.  Eagle sold Edcomm, but stayed on as an employee.  When things soured, the new owners fired Eagle and immediately changed the password to the LinkedIn account locking out Eagle.  The company redirected Eagle’s account to go to the new CEO’s account with a new picture and contact information.

The company claimed it created and maintained the account and there was an unwritten policy that employees turned over their LinkedIn accounts when they left.   Eagle provided Edcomm with her LinkedIn password and allowed the company to help her manage the account.    

In an earlier ruling, the court said the LinkedIn connections were not a trade secret because anyone could see them as they were publicly displayed.  The court, however, allowed the misappropriation of an idea claim to go forward based on a dispute about whose idea it was to generate the content on the LinkedIn account.

The Ruling  

The court has now dismissed Eagle’s claim under the CFAA and the Lanham Act.  As mentioned, the CFAA was designed to address hacking and it requires more than $5,000 in a statutorily-defined “loss.”  So, the issue before the court was not really whether the CFAA was violated or who owned the account, but whether Eagle, who was acting pro se at the time, suffered a sufficient “loss.”

The CFAA defines “loss” as “any reasonable cost to any victim, including the cost of responding to an offense, conducting a damage assessment, and restoring data, program, system or information to its condition prior to the offense, and any revenue lost, cost incurred, or other consequential damages incurred because of interruption of service.”  18 U.S.C. § 1030(e)(11).   

Eagle claimed she lost: (1) a $100,000 business opportunity because she could not access messages on LinkedIn; (2) monies to regain access to the account (she went at least 22 weeks without access); (3) damage to her reputation; and (4) loss of value to the account. 

The court responded: 

None of these allegations suffice to create a genuine issue of material fact as to the existence of cognizable damages under the CFAA for two reasons.  Primarily, Plaintiff is not claiming that she lost money because her computer was inoperable or because she expended funds to remedy damage to her computer.  Rather, she claims that she was denied potential business opportunities as a result of Edcomm’s unauthorized access and control over her account.  Loss of business opportunities, particularly such speculative ones . . . is simply not compensable under the CFAA.”

Thefore, the court dismissed the CFAA claim.  

The court summarily dismissed the Lanham Act claim because when anyone accessed Eagle’s account, they would find the new CEO’s name, photograph and new position so there could be no consumer confusion.

The court allowed the conversion, invasion of privacy and missappropriation state law claims to proceed in a trial that should be starting any day.  Those issues may actually shed light on who owns the account.

But what is it all worth?

It seems to me that Eagle is spending a lot of efforts for loss of access to her account for 22 weeks.  She has already gone through two lawyers and is now pro se.  What was the real damage? From Edcomm’s perspective, what was the real gain?  If there were trade secrets on the account, there are prohibitions and ways to address that without seizing the entire account (or at least seizing it for that long). 

Who Owns What? 

If you’re a company and you want the account,  put it in a contract or employment policy.  If you’re an individual and you want the account, follow these guidelines:

  1. Have it under your name and don’t mix it with the company or brand.
  2. Set up the account yourself.
  3. Populate the content yourself.
  4. Don’t give out the password.

I’m looking forward to a case that parses through personal versus company accounts and when one can become the other.  As explained by Professor Goldman and Venkat Balasubramani, it is not even clear whether California’s new social media privacy law would help in this case because of the failure to make these factual distinctions.

Until there is precedential guidance, I think it is simply a balancing test as to who should own it.  For 99% of us, this won’t be an issue.  Why would anyone want my LinkedIn account or Twitter followers?  

If I amassed a million connections on followers under a LinkedIn Account or Twitter handle specifically referencing Looper Reed’s brand with Looper Reed’s assistance (think of media personalities), then it becomes a little more gray.  As any lawyer will tell you, eliminate the gray with a contract.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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