What happens when an employee who controls your company’s Twitter account leaves for a competitor, taking the Twitter account with him? This question seems to come up now and then in US employment law cases and the latest is the case of gadget blog PhoneDog and its erstwhile employee, Noah Kravitz. According to Ars Technica’s post “Who gets custody of Twitter when an employee quits?“:
In this case, Noah Kravitz worked for PhoneDog, which is an “interactive mobile news and reviews web resource.” Kravitz worked as a reviewer and video blogger. He used the “@PhoneDog_Noah” Twitter account, and it amassed approximately 17,000 followers. When he left, PhoneDog asked for the account “back” but he demurred, instead changing the account handle from @PhoneDog_Noah to “@noahkravitz“. PhoneDog sued, asserting claims for misappropriation of trade secrets, interference with economic advantage; and conversion.
An employee leaving his employment and heading for the competition (or even setting up a competing business of his own) could give rise to a number unlawful competition claims. The primary catalyst for these claims would be the relationships that are formed or strengthened with customers or potential customers using social media. With respect to employees and contractual non-solicitation clauses, we saw some of this a couple years ago on LinkedIn. The PhoneDog case is the latest of a string of similar cases that includes the Rick Sanchez (formerly of CNN) case. The claim categories in the PhoneDog case are likely to be fairly different to the sorts of allegations we would see in a comparable case here in South Africa.
Before getting into possible causes of action, its important to take note that the risk of an employee leaving a company with the company’s Twitter account is not necessarily a minor matter. Sure a company can create a new Twitter profile and require the ex-employee to relinquish the account’s name due, in part, to trade mark considerations but what happens if the ex-employee does that and keeps communicating with all those followers? The profile’s name isn’t the important aspect at all, its the relationships the follower numbers represent.
Meaningful connections on the social Web are built on reputation and relationships consumers feel they are forming with brands. In the right circumstances consumers may come to form those relationships with the people behind the brands, particularly if they are known. In the PhoneDog and Rick Sanchez examples, Twitter followers formed relationships of a sort with Noah Kravitz and Rick Sanchez, respectively. The connections to the PhoneDog and CNN brands, respectively, were secondary and when these two men parted ways with their former employers and their followers remained with them, that reinforced those relationships.
Imagine a somewhat more benign and yet equally problematic scenario: you employed a man as your company’s evangelist and he developed a pretty popular following based on his personality, drive and charisma. Imagine he leaves your company and goes to work somewhere else, taking his Twitter followers with him. Imagine those followers are introduced to another company, another brand, another set of products and services before he leaves that company and moved to another, and then another. His popularity only grows over time and his following becomes more and more valuable along the way. Aside from any suggestion of impropriety, this pretty much describes Robert Scoble, a well known and authoritative tech pundit.
In Scoble’s case there is no suggestion that he acted unlawfully but his case is a better example of how portable relationships can be on the social Web. When you add a competitive dimension to the mix you have a recipe for real harm to a company’s relationships with its customers, its brand and possibly even its competitive advantage. In unlawful competition terms, you have the risk that an employee could use the reputation he developed with a company’s customers as a springboard for his competing business or to help give a competitor an undeserved boost. In the PhoneDog case, PhoneDog unsuccessfully argued that the Twitter followers Kravitz took with him was a trade secret. That argument probably wouldn’t fly in South Africa either. Twitter followers are typically public and there is no secrecy there. Another factor which could form the basis of a claim is the goodwill a company may have established with its customers through social media and which would be interfered with when the ex-employee moves to a competitor.
There is certainly tremendous value in using social media to cultivate and develop relationships with customers but companies that fail to anticipate individual employees (or even groups of employees) migrating those customers to competing businesses, and catering for that, are at risk.