Whose LinkedIn account is it anyway?
Does a company have any legal basis for asserting ownership of a former employee’s LinkedIn account?
Greg was Acme Corp.’s best and most productive sales representative. He knew how to connect with clients and cultivate relationships that resulted in sales. Greg easily accounted for 10% to 15% of the company’s revenue.
Greg’s performance really took off after the company implemented its social media outreach program, which required all sales representatives to sign up for a LinkedIn account. The company provided extensive training to Greg and his co-workers on how to effectively use social media to identify, connect and convert leads. Sales representatives were required to give the company unfettered access to their social media accounts.
Related: Risk vs. reward: Safely weaving social media into the workplace
The company made sure that the social media accounts stayed active and up-to-date by posting content and keeping sales representatives’ profiles current. The company paid for premium features, churned out articles and white papers that it attributed to their sales representatives, and posted to their accounts.
By the time Greg made his decision to leave Acme for its No. 1 competitor, his LinkedIn account had accumulated thousands of connections and followers. Many of Greg’s LinkedIn connections were key decision-makers who worked for Acme’s customers. An equal amount was referral sources or potential customers. The company estimated that Greg’s LinkedIn account was potentially worth millions in sales to Acme.
So, when the company abruptly lost access to Greg’s LinkedIn account — and his connections — there was considerable cause for concern. Does Acme have any legal basis for asserting ownership of Greg’s LinkedIn account?
There is little doubt that an employer’s relationship with its customers and prospects, and the goodwill developed in those relationships, are legitimate protectable business interests. Courts have time and again prohibited former employees from using a former employer’s customer list to generate business in their new endeavors by concluding that such lists are trade secrets belonging exclusively to the company. The statutory definition of a trade secret under Texas law includes:
List[s] of actual or potential customers … whether tangible or intangible and whether or how stored, compiled, or memorialized physically, electronically, graphically, photographically, or in writing … , according to the Tex. Civ. Prac. & Rem. Code § 134A.002.
Under this definition, it would certainly appear that the list of Acme customers and prospects on Greg’s LinkedIn account might be Acme’s trade secret. However, the definition also states that in order to be a trade secret, the information must be: (1) secret and (2) derive independent economic value. While Acme can point to the millions in potential sales Greg’s LinkedIn account might generate for the company to show independent economic value, it might have a hard time convincing anyone that Greg’s list of LinkedIn connections is secret.
Consider a judge’s ruling in a federal court case (Cellular Accessories for Less, Inc. v. Trinitas LLC, CV 12-06736 DDP SHX, 2014 WL 4627090, at *4 (C.D. Cal. Sept. 16, 2014)). An employee who left a company to start a competing business and retained a LinkedIn account with connections to hundreds of his former employer’s contacts sought to have a judge dismiss the company’s trade secret misappropriation claim.
The employee asserted that his list of LinkedIn connections could not be the company’s trade secret under California law (the definition of “trade secret” under the California Uniform Trade Secrets Act mirrors the definition under the Texas Uniform Trade Secrets Act) because it was visible to his connections on LinkedIn.
The company pointed out that the connections were visible only to the extent the former employee chose to share them. For instance, refusing to take judicial notice of LinkedIn’s functionality — it turns out that the default setting in LinkedIn allows a user’s 1st-degree connections to see the user’s entire list of connections, however, a user can choose to limit that visibility to shared connections only. Subsequently, a federal judge denied the employee’s motion for summary judgment and held that a jury would have to decide whether the LinkedIn information was a trade secret because it was not sufficiently clear to the judge whether and to what extent the former employee made his connections public. In his ruling, the judge indicated that it was also important to know whether the company explicitly or implicitly approved of the former employee’s actions in publicizing his connections.
This case offers real hope to Acme’s assertions of ownership of Greg’s LinkedIn account. Given the control that Acme exerted over its sales representatives’ social media accounts, the key consideration is the extent to which it took “reasonable measures under the circumstances to keep the information secret.” In other words, did Acme require its employees to limit visibility to their social media connections? If not, showing that the connections constitute a trade secret may not be possible.
Employers encouraging or requiring their employees to use social media should:
- communicate what information is to be kept confidential, including customer lists;
- make sure that the definition of confidential information in confidentiality agreements and employee handbooks includes social media connections derived for the employer’s benefit; and
- make sure that the social media policy helps underscore for employees the line between their personal and professional use of social media.
If you are not sure whether your social media policy allows you to protect your confidential information while taking advantage of useful marketing tools, it is a good idea to consult your labor and employment attorney.
Antonio U. Allen is a Partner at Pham Harrison, LLP. He is the immediate past Chair of the Labor and Employment Section of the Tarrant County Bar Association. His practice focuses on providing litigation defense and counseling to employers of all sizes. He can be reached at aallen@phamharrison.com.
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