The settlement was a disappointing denouement for a social media world watching for a legal precedent. The court did not get an opportunity to rule on whether PhoneDog, or Kravitz, had rights to the Twitter followers. According to Bellace, cases like PhoneDog’s lawsuit are often settled because a company would not gain much by pursuing legal action against a sole employee. Typically, the threat of a lawsuit would be enough to persuade the employee from further using the account, she says. The exception would be an egregious transgression by a high-profile individual that besmirches the company name, which could force a lawsuit.
‘Owning’ followers and content
The good news for individual Twitter users is that a company likely cannot own an employee’s followers. The bad news is that neither can the individual.
“No one ‘owns’ their followers as a matter of property,” according to Kevin Werbach, Wharton professor of legal studies and business ethics. “I don’t [even] know my followers; they can stop following me at any time.” It costs nothing to open a Twitter account, and the service is free. “The way Twitter works, people choose to sign up and follow,” he notes. They are not the same as customers on a marketing list. “It’s not that the company is doing something internally with the names [to generate more business]. It’s not like the company’s customer list.”
The lack of legislation or legal precedent means that social media disputes like PhoneDog’s become a matter of contract law, says Andrea Matwyshyn, Wharton professor of legal studies and business ethics. “These are questions of contract law between the employee and the company,” she notes. “You need to contract very carefully and in advance” what social media practices are permissible in the workplace. If a transgression occurs before a written policy or agreement was put into place, the case stands or falls based on the facts around it.
Then there is the question of influence in developing an audience. “To what extent did you use [a company’s] trademarks as a core piece to attract followers?” Matwyshyn asks. When an established personality, such as a famous journalist, brings her own followers with her to a new job, an easier case can be made that they are her followers. However, high-profile individuals or top executives typically have employment agreements in place that spell out such rules, Bellace points out. But with rank-and-file employees increasingly facing these situations, “the issue is cropping [up in] the lower levels.”
When it comes to owning content, social media also presents a new set of challenges in classifying tweets and Facebook posts as “property.” “If I tell a company [in a tweet or Facebook post] that I love strawberry ice-cream, does the company own that information? Does that mean I can’t use it anymore?” Matwyshyn asks. “I still love strawberry ice-cream.” With tweets and posts, “it is not clear that this data can be owned.”
Setting up a policy
Too often, companies go ahead and set up social media accounts without talking to the legal department. “Some companies have too much zeal and march forward without asking the general counsel,” Matwyshyn says. To head off disputes, firms should consider crafting an official social media policy, she suggests. They also could insert social media rules into new or existing employee contracts to avoid complications later on.
Not only should companies add a non-compete clause in contracts, but they should also include policies on the permissible use of generated content, as well as specifications as to how employees should refer to the company in any social media, Matwyshyn notes.
According to Bellace, a good rule of thumb is to ask employees not to discuss company information on their personal social media accounts. Firms should also specify that they “will take action, up to and including termination, if an employee misuses social media” – including racist, sexist or other discriminatory posts, as well as disparaging remarks toward the company.
When it comes to making it clear that company information is corporate property, Matwyshyn notes that the stakes are higher in tightly regulated industries such as financial services. If an executive from a publicly held company posts material, non-public information to an audience on Facebook or LinkedIn, she risks violating the SEC’s Regulation Fair Disclosure rule (or Regulation FD), which requires that such information reach the investing public at the same time. The Financial Industry Regulatory Authority (FINRA), a self-regulatory body for the financial industry, offers guidance on social media practices by member firms to avoid running afoul of the law.
Bellace believes that over time, users will become savvier about social media. For example, they will learn to be more discreet as the impact of instant mass communication sinks in. Years ago, people were posting inappropriate photos on Facebook, only to quickly discover that it could hurt their career. The same will happen with other social media posts. “People are going to learn to be more cautious,” she says.
