Contacts Followers iStock 000052923152 Full

Who owns your social media followers and contacts?

Employees are increasingly being encouraged to build a large network of connections and to engage with existing and prospective customers via social media.  It is therefore important to ask: Who owns these social media contacts?  

When an employee whose role was to manage and maximise a company’s social media presence, or promote a brand via social media, leaves the organisation, disputes may arise regarding who ‘owns’ the various social media accounts and associated contacts.  Employers are likely to want to retain these lists of contacts – which represent current and potential customers of the business.  

Example: LinkedIn

According to LinkedIn’s User Agreement, individuals who register, access or use LinkedIn’s services enter into an agreement with LinkedIn. Even where the individual is using the services on behalf of a company, the individual owns the account. The User Agreement says that an individual user is not allowed to “transfer any part of [their] account (e.g. connections, groups)”.  Nevertheless, in some circumstances LinkedIn contacts may be considered to be the business’s property.  

Former employees can be restrained from using these contacts. However, the terms of LinkedIn’s User Agreement don’t support the transfer of contacts to the employer.

Australian case law

In Australia, the courts have held that the personal connections of an employee with customers may be a legitimate and protectable business interest. This was shown in Cactus Imaging Pty Limited v Glenn Peters [2006] NSWSC 717.

However Australian courts are yet to decide whether social media connections created during a period of employment also constitute the property of the employer.  Nevertheless, it is unlikely that social media connections will be treated differently by the courts to other forms of contacts and customer lists made by an employee.

In Naiman Clarke Pty Limited atf Naiman Clarke Trust v Marianna Tuccia [2012] NSWSC 314, a recruitment company pursued a former employee for breaching confidentiality. They  accused her of using the company’s client database to increase her number of LinkedIn contacts prior to resigning and benefiting from these connections in subsequent employment.  This case turned on issues of breach of confidential information, rather than ownership of social media contacts, however appears to have settled.

Overseas case law

There have been a number of cases overseas involving social media contacts and ex-employees. However there is currently no clear position on ownership of social media connections, or whether social media connections constitute trade secrets.

- In Whitmar Publications Limited v Gamage [2013] EWHC 1881 (Ch), the High Court of Justice of England and Wales granted an interim injunction. This required ex-employees to return access, management and control of LinkedIn accounts to their previous employer, finding they breached an implied duty of good faith and fidelity.  These ex-employees had tried to use email addresses sourced from Whitmar’s LinkedIn groups, maintained on behalf of Whitmar, to market a rival business venture.  Unfortunately the Court did not clearly rule on whether the LinkedIn groups were the property of the employer. 

Information publically available 

Contrastingly, in Sasqua Group, Inc v Courtney 2010 WL 3613855(ED NY, 2010), a judge of the US District Court for the Eastern District of New York held that customer lists, used by a former employee to start her own rival consulting business, were not protectable trade secrets. This was because the information was available from public sources, namely LinkedIn. It is likely Australian courts would adopt a similar approach and find that connections that are publically accessible online do not constitute confidential information or trade secrets. Such a case would turn on factors such as:

  • whether or not the contacts are actually made public;
  • attempts to retain the confidential nature of the information; and
  • the existence of any confidentiality obligations on the relevant employee.

In Eagle v Morgan 11-4303 (ED Pa, 2013), the US District Court for the Eastern District of Pennsylvania held that an individual who created a LinkedIn account for work purposes owned the LinkedIn account, not the employer.  It also found that those LinkedIn connections were not trade secrets. Despite these findings, the ex-employee was not entitled to damages under US state laws for being locked out of the LinkedIn account as she could not demonstrate actual losses suffered, given a failure to prove actual revenue generated from those contacts. 

Changing Twitter handles

The value of social media contacts was questioned in US proceedings between review website, PhoneDog and its former employee, tech blogger Noah Kravitz. Kravitz was tasked with maintaining and updating the Twitter account @phonedog_noah, which grew to 17,000 followers. When Kravitz resigned, he took the twitter handle, @phonedog_noah and changed it into @noahkravitz, taking his followers with him. PhoneDog claimed that the Twitter account and followers were trade secrets which Kravitz had misappropriated by continuing to use the account once employed by PhoneDog’s competitor. Interestingly, PhoneDog sought damages of US$2.50 per Twitter follower. As the case settled out of court, the monetary value of social media followers remains undecided.

Protecting your business’s social media assets

Despite the lack of certainty from the courts, businesses need to ensure they retain ownership of social media profiles and connections that are closely connected to the business. LinkedIn connections, Facebook friends and Twitter followers may constitute customers of the business, and are therefore valuable business assets.  Consequently, steps should be taken to ensure that these accounts and contacts remain in the business.

Employers should have agreements in place with employees who register and maintain social media accounts, such as social media managers, in which:

  • acquiring social media connections is noted as being a part of the role’s key responsibilities;the employee acknowledges social media contacts acquired using work equipment and during business hours are owned by the employer;
  • the employee acknowledges any log-in information and content posted to social media sites are the employer’s property; and
  • the employee agrees to hand over their control of and access to these social media accounts to the employer at the end of employment. 

Social media policies should also require these employees to maintain separate work and personal social media accounts.  This will ease the transfer of business accounts to the company on departure. Where a LinkedIn ‘premium account’ is warranted, the employer should pay for this account.  This will assist is demonstrating that the account is the employer’s property.

If you have further questions or require expert advice, please don't hesitate to contact us



Related Content