This will be one of our most attended webinars, and there is still time to sign up. The webinar will cover legal issues facing California employers under the new Labor Code section prohibiting employers from asking applicants and employees for social media passwords, privacy issues when conducting background checks, alternatives to social media policies, and when policies addressing these issues are necessary. It is taking place at 10:00 a.m. PST January 15. Visit our website for registration information.
In October 2012 the National Labor Relations Board issued an advice memorandum regarding whether an employer’s social media policy violated the National Labor Relations Act (“NLRA”). This memorandum is of importance because the NLRB has issued findings recently that employer’s seemingly neutral social media policies violated employees’ rights under the NLRA. Section 7 of the NLRA provides that employees have the right to self-organize, form, join or assist labor organizations, and generally “engage in other concerted activities.” Section 8 of the NLRA makes it unlawful for an employer “to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 7.” This prohibits applies to all employers, even if the employees are not unionized.
In the memorandum the NLRB sets forth its two step analysis in determining whether a “work rule” “would reasonably tend to chill employees in the exercise of their Section 7 rights.” First, the NLRB examine whether the rule “is clearly unlawful if it explicitly restricts Section 7 protected activities.” Second, the rule is examined to determine if “(1) employees would reasonably construe the language to prohibit Section 7 activity; (2) the rule was promulgated in response to union activity; or (3) the rule has been applied to restrict the exercise of Section 7 rights.” While the Board said that a rule “that could conceivably be read to restrict Section 7 activity” would does not automatically violate the NLRA, but if the rule is ambiguous and contains no limiting language or context to clarify that it does not restrict their Section 7 rights would be in violation.
The case at issue in the memorandum involved Cox Communications. The company had a standard social media policy:
Nothing in Cox’s social media policy is designed to interfere with, restrain, or prevent employee communications regarding wages, hours, or other terms and conditions of employment. Cox Employees have the right to engage in or refrain from such activities. . . .
DO NOT make comments or otherwise communicate about customers, coworkers, supervisors, the Company, or Cox vendors or suppliers in a manner that is vulgar, obscene, threatening, intimidating, harassing, libelous, or discriminatory on the basis of age, race, religion, sex, sexual orientation, gender identity or expression, genetic information, disability, national origin, ethnicity, citizenship, marital status, or any other legally recognized protected basis under federal, state, or local laws, regulations, or ordinances. Those communications are disrespectful and unprofessional and will not be tolerated by the Company. . .
DO respect the laws regarding copyrights, trademarks, rights of publicity and other third-party rights. To minimize the risk of a copyright violation, you should provide references to the source(s) of information you use and accurately cite copyrighted works you identify in your online communications. Do not infringe on Cox logos, brand names, taglines, slogans, or other trademarks.
An employee was fired for violating this policy by posting an offensive and derogatory comment on his Google+ account via his cell phone. The company suspended the employee and conducted a further investigation, which revealed that the employee made numerous other posts “containing lewd language which disparaged customers.” The company terminated the employee.
Applying the analysis above to Cox Communication’s social media policy, the NLRB found that the policy did not violate the NLRA. The Board said that the examples of egregious conduct listed in Cox Communication’s policy established a context that “clearly would not be reasonably understood to restrict Section 7 activity.” Also, the policy’s savings clause that specifically set forth that it was not designed to violate any communications employees had the legal right to make, also supported the finding that it did not violate Section 7.
Inside Litigation Over Social Media Accounts - Why Employers Should Have Social Media Policies - Part I
As previously written about on this blog, the case PhoneDog v. Kravtiz is one of the first cases in the country to deal with substantive ownership issues arising out of social media accounts used in the workplace. As companies are moving more and more away from traditional marketing and advertising towards the use of social media, it is critical that companies have an agreement with employees about a few key items regarding social media accounts, such as ownership of the social media accounts.
On the other hand, the rise social media has given individuals the ability to create a brand for themselves and establish a large following for their expertise. These individuals are hired by companies not only for their expertise on the subject matter, but also for the large group of followers they developed via social media. The followers the individuals have through Twitter, Facebook or a blog is a valuable advertising and marketing resource for a company that wishes to gain the follower’s attention. Because of this shift from traditional advertising and PR, employers and employees have to be vigilant in approaching this issue given the potentially large value social media contacts can now have in the marketplace. An employee being hired who agrees to use their social media accounts to promote the company’s business should also clearly set out at least a few issues in a written agreement.
For example, a social media agreement between and employer and employee could address at the following issues:
- Ownership of the employee’s social media accounts that will be used for business purposes. Clearly spell out who owns the accounts (or license to use the accounts).
- Ownership and use of the company’s social media accounts. Who retains the right to change the passwords? Who retains the right to edit and approve content? What is the process to approve content prior to publishing?
- What control, if any, the company will have after the termination of the employment relationship over the employee’s or the company’s social media accounts. Is there a time frame after employment that the employee cannot use his or her own social media accounts for competitive business uses? Employers need to be careful here, however, as limiting an employee’s use of their social media accounts may be tantamount to a prohibited non-competition agreement or in violation of other state laws. I expect that this will be another hot area of the law that will be addressed by the courts within the next few years.
- It may also be useful to set a monetary value on the social media accounts. This is probably easier to negotiate among the parties prior to any dispute over the value should litigation arise later.
My next article, Part II of this series, will address what claims employers and employees would likely use during litigation over social media accounts.
Imagine you are an employer and your employee in charge of your social media accounts leaves, keeps the accounts, and begins using the accounts while working for a competitor. Conversely, imagine you are an employee, leave employment to work for a competitor and your former employer sues you for $350,000 because you refuse to stop using your social media accounts. These issues are at play in PhoneDog v. Kravitz. The case illustrates the complicated issues surrounding exactly who owns social media accounts that are used for work. Noah Kravitz worked for PhoneDog as a product reviewer and video blogger. He had a Twitter account “@PhoneDog_Noah” he used as one way to publish product reviews as part of his job at PhoneDog. PhoneDog asserts in the lawsuit that it issues its employees Twitter accounts in the form of “@PhoneDog_[name]”. PhoneDog alleges that all of these Twitter accounts are proprietary, confidential information. Kravitz used the account while he was employed at PhoneDog, and garnered 17,000 Twitter followers.
When Kravitz left employment with PhoneDog to join a competitor, PhoneDog asked him to stop using the Twitter account. It is alleged in the lawsuit that Kravitz refused, changed the Twitter account handle to “@noahkravitz” and then continued to use the account and maintain the Twitter followers.
In response, PhoneDog filed a lawsuit against Kravitz for (1) misappropriation of trade secrets; (2) intentional interference with prospective economic advantage; (3) negligent interference with prospective economic advantage; and (4) conversion. Currently, the Court has ruled that PhoneDog’s lawsuit may proceed at this point, but Kravitz has raised some valid points that may be a defense, but still need to be developed further in litigation.
Kravitz maintains that there cannot be a claim against him for misappropriation of trade secrets because the Twitter account followers are not a secret, as anyone on Twitter can see who the followers are. Kravitz also argues that the password to the Twitter account is not a trade secret, as PhoneDog does not derive any economic benefit from the password itself – it simply allows the user to see public information. Kravitz was also the person who created the password, not PhoneDog, so there is no PhoneDog secret at issue here. Most interestingly, Kravitz argues that PhoneDog does not have a claim against him for misappropriating the account because the Twitter account is not owed by PhoneDog. Twitter’s Terms of Service specifies that all accounts are the exclusive property of Twitter, that Twitter has the right to “reclaim usernames without liability” to the users, and Twitter retains the right to terminate accounts.
The employer is not without its share of arguments as well. While Kravitz raises some interesting technical issues about who owns the Twitter account, PhoneDog would have a strong argument that the license issued by Twitter is really the property at issue. PhoneDog could argue that because the license granted by Twitter to Kravitz was done during Kravitz’ employment and he set up the account at the request of PhoneDog, this license actually belongs to PhoneDog. Some not so well known California Labor Code provisions strongly support PhoneDog’s argument. For example, Labor Code section 2860, states:
Everything which an employee acquires by virtue of his employment, except the compensation which is due to him from his employer, belongs to the employer, whether acquired lawfully or unlawfully, or during or after the expiration of the term of his employment.
Furthermore, Labor Code section 2863 provides:
An employee who has any business to transact on his own account, similar to that entrusted to him by his employer, shall always give the preference to the business of the employer.
This fascinating case raises many interesting issues, and will not be the last time I blog about the issues it raises. It is a good reminder that the creation and maintenance of social media accounts is a critical factor in the employment context today and needs to be addressed from both the employer's and employee's perspectives.