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Who owns social media accounts and business contacts: employees or employers?

05 Jul 2012

Facebook, Twitter, LinkedIn and other social networks have become a crucial tool in establishing and building business relationships for many companies. Employees are increasingly connecting with current and potential customers using social media in order to promote themselves and their employers.

However, what happens to social media accounts when employees decide to leave for greener pastures? Do employers have any rights to such accounts, or to stop their former employees from using them?

Employers have always taken an interest in limiting contact between their customers and former employees. A substantial body of law has developed over the centuries concerning matters such as employees retaining customer lists and business cards. How these laws will apply in the age of social media is yet to be seen, but cases are beginning to emerge.

In England, a court recently ordered an employee to hand over to his former employer all the employee's LinkedIn contacts and all communication sent through his LinkedIn account. The employee was also required to provide documents (eg emails and invoices) concerning any business he had obtained through those contacts.

A case recently heard in the United States suggests a countervailing view, this time concerning a contractor. One of the contractor's duties was maintaining a Twitter account, which attracted several thousand followers. When the contract ended, the contractor took the Twitter account with him, apparently with his principal’s consent. One year later, the principal commenced court action against the contractor for lost exposure and opportunity regarding the followers. This case did not ultimately reach trial, with the principal settling in favour of the contractor for a reported six figure sum.

With many differing details and opinions, and many cases currently on hand but yet to be decided, there's not currently a clear cut answer or rule that can be drawn from these cases. The rights an employer may have to an employee's social media account, or the business contacts in those accounts, may depend on factors including:

  • Is the person an employee or a contractor? Contractors are generally held to have more rights regarding ownership of material developed by them, and this may include social media accounts and contacts in some circumstances.
  • What was the purpose of the social media account? An employer is unlikely to have rights in a 'social' or personal account (eg Facebook) compared to one established for more business oriented purposes (eg LinkedIn).
  • Was it part of the employee's job to engage in social media? An employer may have difficulty claiming any interest if an employee has cultivated business contacts on their own initiative outside of their employment.
  • Did the employer ever claim control or ownership? If an account was established on the employer's behalf, or the contact was an existing client of the employer, the employer may have stronger rights.
  • What are the terms of the employee's employment? If there is a restraint of trade, non-solicitation or intellectual property clause in the employee’ s contract, it may be easier for the employer to claim some interest in the employee's social media accounts and contacts.
  • Is it reasonable for the employer to assert rights over the employee’s social media account? The courts are reluctant to uphold contractual restraints imposed on ex-employees that may harm their ability to make a living. The employer may need to show that the requirement to surrender or stop using the social media account only goes as far as it is reasonable to protect its legitimate interests.

Balancing the employer's and employee's interests is not easy. Employers have an obvious interest in employees cultivating business connections for the employer through social media. However, employees may be reluctant to apply effort to social media if they have no rights regarding those connections when they leave, particularly if those connections were initially established prior to their employment outside their current role.

The application of the law in relation to social media is in its infancy. However, legal principles from pre-social media times are still relevant and clearly indicate that the best method of regulating the interests of employers and employees is through comprehensive employment contracts. Modern employment contracts and company policies should address each party’s rights to social media accounts and contacts made before and during the employment relationship, and each party’s rights following termination of employment.