In 2012, the National Labor Relations Board (NLRB or the “Board”) found a “courtesy” policy unlawful. Since then, the NLRB has continued to create more and more tension between the National Labor Relations Act (NLRA or the “Act”) and employers’ legitimate interests in maintaining and enforcing workplace guidelines governing courtesy in a nondiscriminatory fashion.

This article focuses on the maintenance and enforcement of courtesy and civility rules. In these cases, the Board has taken extreme positions that increasingly ignore competing interests and obligations of employers. Among the obligations that can conflict with Section 7 in this context, employers must protect their employees from harassment, including on the basis of sex and race, by disciplining employees making harassing comments and engaging in harassing behavior and by maintaining civil workplaces that are not conducive to harassment. Employers also have a legitimate interest in maintaining a civil workplace simply to promote employee productivity and job satisfaction, as well as ensuring appropriate levels of customer service.

The Framework: Regulating Workplace Rules Under the NLRA

Employees have the right to engage in concerted activity under Section 7 of the NLRA. Concerted activity is activity undertaken for the employees’ mutual aid and protection, including, for example, discussing the terms and conditions of employment, such as wages, policies, and workplace treatment. Under Section 8(a)(1) of the Act, it is an unfair labor practice for an employer “to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 7.”

Under the general framework of the Act, the National Labor Relations Board regulates employer maintenance and enforcement of generally applicable workplace rules in several ways.

First, an employer commits an unfair labor practice, under Section 8(a)(1), if it maintains a rule that would reasonably tend to chill employees in the exercise of their Section 7 rights. If it expressly restricts Section 7 activity, the rule is unlawful. Further, if it does not expressly restrict Section 7 activity, the rule is still unlawful under Lutheran Heritage Village if “(1) employees would reasonably construe the language to prohibit Section 7 activity; (2) the rule was promulgated in response to union activity; or (3) the rule has been applied to restrict the exercise of Section 7 rights.” In reading the rule, the Board should “refrain from reading particular phrases in isolation.” Similarly, the Board should not seek out “arguable ambiguity . . . through parsing the language of the rule, viewing [a] phrase . . . in isolation, and attributing to the [employer] an intent to interfere with employee rights.” Lafayette Park Hotel.

Second, employers may not discipline employees for engaging in protected activity. In the event that “the very conduct for which employees are disciplined is itself protected concerted activity,” then the discipline violates Section 8(a)(1) regardless of the employer’s motive or a showing of animus. Burnup & Sims, Inc. Similarly, if an employee violates a workplace rule and is disciplined, the discipline is unlawful if the employee “violated the rule by (1) engaging in protected conduct or (2) engaging in conduct that otherwise implicates the concerns underlying Section 7 of the Act.” Continental Group, Inc.

Continue Reading The Death of Courtesy and Civility Under the National Labor Relations Act

A federal district court broke new social media law ground in August 2014 when it held in favor of the cable network Black Entertainment Television (BET) in a suit brought by the founder of an unofficial Facebook fan page for one of the network’s television shows. In holding that BET acted lawfully when it asked Facebook to transfer the fan-created page’s “likes” to a BET-sponsored page, the U.S. District Court for the Southern District of Florida established important precedent: The only individual who can possibly claim to own a “like” on a Facebook page is the individual user responsible for it.

Background

Insurance agent Stacey Mattocks was so devoted to the television series The Game that she created an unofficial Facebook fan page for the show in 2008. By the time BET acquired the rights to The Game from the CW Network in 2009, Mattocks’ fan page had garnered a huge following, and BET—reportedly having failed to attract similar support for the show’s official fan page—wanted to capitalize on the social media audience that Mattocks had amassed.

Thus began a series of negotiations between Mattocks and BET, with Mattocks at one point managing the page for the Viacom-owned cable channel for $30 an hour. During Mattocks’ tenure in that part-time position, BET provided her with exclusive content to post on the Facebook page and began displaying its trademark and logos on it. The page’s following grew from two million to more than six million fans.

At this point, in early 2011, Mattocks and BET entered into a letter agreement granting BET administrative access to the Facebook page and the right to post content on it in exchange for the network’s promise not to change Mattocks’ administrative rights to the page. But Mattocks broke the agreement in 2012 when, after refusing a reported $85,000 annual salary offer from BET, she cut off the network’s control of the Facebook page and informed BET that she would maintain that restriction until the parties reached “an amicable and mutually beneficial resolution” concerning her employment.

BET reacted to being cut off by asking Facebook to “migrate” the page’s fans to a BET-sponsored page. After determining that the BET-sponsored page officially represented The Game’s brand owner, Facebook complied. Twitter also complied with BET’s separate request to disable The Game Twitter account that Mattocks maintained.

Mattocks filed suit in the U.S. District Court for the Southern District of Florida, alleging that BET tortiously interfered with Mattocks’ contractual relationships with Facebook and Twitter; breached its letter agreement with Mattocks; breached a duty of good faith and fair dealing with Mattocks; and converted a business interest that Mattocks had in the page. In late August 2014, the court held that BET was entitled to summary judgment on all of Mattocks’ claims.

Continue Reading She Liked It. She Really, Really Liked It: Federal District Court Holds Facebook Fan Page Manager Doesn’t Own “Likes”

  • In-tweet purchases. Twitter is testing the ability for its users to make purchases directly from tweets. The popular social network is working with a number of sellers, nonprofits and artists—as well as a small handful of social shopping and e-commerce platforms—to test “in-tweet purchases,” which will enable users to hit the “Buy” button straight from a tweet and compete a purchase in a few taps. This new functionality is only available to a small percentage of Twitter users for now, but availability is expected to broaden over time.
  • What’s the password? Back in 2012, we reported on then-new section 980 of the California Labor Code, which restricts employer access to “personal social media” (including usernames and passwords) of employees and applicants for employment. SFGate reports that, regardless of section 980, many state law enforcement agencies still require the disclosure of social media passwords, taking the position that the law only applies to private employers. Some California lawmakers are trying to close this apparent loophole through new legislation.
  • Get me one of those Trapper Keepers! It’s that time of year again, when kids head back to school and parents head to the stores for school clothes, school supplies, and much more. The National Retail Federation estimates that spending on back-to-school shopping will reach nearly $75 billion this year—and according to Crowdtap, a remarkable 64 percent of shoppers say that social media will play a role in their decisions on what to buy, with nearly 40 percent of those shoppers looking to Pinterest for deals and discounts.

The latest issue of our Socially Aware newsletter is now available here.

In this issue of Socially Aware, our Burton Award-winning guide to the law and business of social media, we summarize the current status of various state laws restricting employer access to the personal social media accounts of applicants and employees; we explore how driving while wearing Google Glass is butting up against the law, and examine recent attempts to legislate the use of Glass on the road; we report on various approaches U.S. courts are taking to address social media-related discovery challenges and to avoid social media fishing expeditions; we take a look at the legal landscape of so-called “revenge porn” and the laws victims are leveraging (or may be able to leverage in the future) in order to fight back; we discuss how UK and European copyright law is being applied to common Internet social and business practices, including the most basic of online activities—hyperlinking; and we highlight a puzzling recent Ninth Circuit decision that has operators of online video services and copyright experts alike scratching their respective heads.

All this—plus a collection of thought-provoking statistics about social media marketing…

A 2013 CareerBuilder survey of hiring managers and human resource professionals reports that more than two in five companies use social networking sites to research job candidates. This interest in social networking does not end when the candidate is hired: to the contrary, companies are seeking to leverage the personal social media networks of their existing employees, as well as to inspect personal social media in workplace investigations.

As employer social media practices continue to evolve, individuals and privacy advocacy groups have grown increasingly concerned about employers intruding upon applicants’ or employees’ privacy by viewing restricted access social media accounts. A dozen states already have passed special laws restricting employer access to personal social media accounts of applicants and employees (“state social media laws”), and similar legislation is pending in at least 28 states. Federal legislation is also under discussion.

These state social media laws restrict an employer’s ability to access personal social media accounts of applicants or employees, to ask an employee to “friend” a supervisor or other employer representative and to inspect employees’ personal social media. They also have broader implications for common practices such as applicant screening and workplace investigations, as discussed below. Continue Reading Employer Access to Employee Social Media: Applicant Screening, ‘Friend’ Requests and Workplace Investigations

The latest issue of our Socially Aware newsletter is now available here.

In this issue of Socially Aware, our Burton Award-winning guide to the law and business of social media, we summarize the FFIEC’s recently-issued final guidance on social media use by financial institutions; we report on a new NLRB decision holding that particularly egregious social media postings by employees may fall outside the protections of the NLRA; we provide an update on the California Attorney General’s guidance regarding compliance with the state’s “do-not-track” disclosure requirements for websites; we discuss a recent case that calls into question the status of domain names as intangible property; we take a look at the latest in a string of cases exploring the First Amendment status of social media activity by government employees; and we highlight an important FTC settlement with a mobile app publisher related to data collection and sharing disclosures. All this plus a collection of surprising statistics about the most popular people, videos, tweets and hashtags of 2013.

Our global privacy + data security group’s Data Protection Masterclass Webinar series is turning the spotlight on social media marketing and policies in January.

Please join Socially Aware contributors Christine Lyon and Karin Retzer, along with Ann Bevitt in our London office for a webinar that will examine the laws and regulations in the United States and Europe relating to consumer-facing issues that arise from the use of social media in advertising and marketing. This presentation will also address the challenges that employers and employees face resulting from the use of social media in the workplace and in the recruitment process.

Topics Will Include:

  • Privacy issues for social media advertising, blogging and tweeting
  • Data sharing in relation to social plug-ins
  • Data protection requirements for social media market research
  • Targeting and analytics
  • Social media policies
  • Monitoring of social media use, including misuse of social media by employees
  • Use of social media in the application process

Date & Time:

Tuesday, January 21, 2014

4:30 p.m. – 6:00 p.m. GMT
11:30 a.m. – 1:00 p.m. EST
8:30 a.m. – 10:00 a.m. PST

Speakers:

Registration:

To register for this webinar, please click here.

For more information, please contact Kay Burgess at kburgess@mofo.com or +44 20 7920 4067.

Social media platforms have become an increasingly important means for companies to build and manage their brands and to interact with their customers, in many cases eclipsing companies’ traditional “.com” websites. Social media providers typically make their platforms available to users without charge, but companies nevertheless invest significant time and other resources to create and maintain their presences on those providers’ platforms. A company’s social media page or profile and its associated followers, friends and other connections are often considered to be valuable business assets.

But who owns these valuable assets – the company or the individual employee who manages the company’s page or profile? Social media’s inherently interactive nature has created an important role for these individual employees. Such an employee essentially acts as the “voice” of the company and his or her style and personality may be essential to the success and popularity of that company’s social media presence. As a result, the lines between “company brand” and “personal brand” may become blurred over time. And when the company and the individual part ways, that blurring can raise difficult issues, both legal and logistical, regarding the ownership and valuation of business-related social media accounts.

Such issues have arisen in a number of cases recently, several of which we discuss below. Although these cases leave open a number of questions, the message to companies who use social media is loud and clear: it is imperative to proactively establish policies and practices that address ownership and use of business-related social media accounts.

PhoneDog v. Kravitz

A recently settled California case, PhoneDog v. Kravitz, Case No. C 11-03474 (N.D. Cal.), raised a number of interesting issues around the ownership and valuation of social media accounts. The defendant, Noah Kravitz, worked for the plaintiff, PhoneDog, a mobile news and reviews website. While he was employed by PhoneDog, Kravitz used the Twitter handle “@PhoneDog_Noah” to provide product reviews, eventually accumulating 17,000 Twitter followers over a period of approximately four and a half years. Kravitz then left PhoneDog to work for one of its competitors but he maintained control of the Twitter account and changed the account handle to “@noahkravitz.” When Kravitz refused PhoneDog’s request to relinquish the Twitter account that had been previously associated with the “@PhoneDog_Noah” handle, PhoneDog filed a complaint against Kravitz asserting various claims, including trade secret misappropriation, conversion, and intentional and negligent interference with economic advantage.

Kravitz filed a motion to dismiss the complaint based on a number of arguments, including PhoneDog’s inability to establish that it had suffered damages in excess of the $75,000 jurisdictional threshold. Kravitz also disputed PhoneDog’s ownership interest in either the Twitter account or its followers, based on Twitter’s terms of service, which state that Twitter accounts belong to Twitter and not to Twitter users such as PhoneDog. Finally, Kravitz argued that Twitter followers are “human beings who have the discretion to subscribe and/or unsubscribe” to the account and are not PhoneDog’s property, and asserted that “[t]o date, the industry precedent has been that absent an agreement prohibiting any employee from doing so, after an employee leaves an employer, they are free to change their Twitter handle.”

With respect to the amount-in-controversy issue, PhoneDog asserted that Kravitz’s continued use of the “@noahkravitz” handle resulted in at least $340,000 in damages, an amount that was calculated based on the total number of followers, the time during which Kravitz had control over the account, and a purported “industry standard” value of $2.50 per Twitter follower. Kravitz argued that any value attributed to the Twitter account came from his efforts in posting tweets and the followers’ interest in him, not from the account itself. Kravitz also disputed PhoneDog’s purported industry standard value of $2.50 per Twitter follower, and contended that valuation of the account required consideration of a number of factors, including (1) the number of followers, (2) the number of tweets, (3) the content of the tweets, (4) the person publishing the tweets, and (5) the person placing the value on the account.

With respect to the ownership issue, PhoneDog claimed that it had an ownership interest in the account based on the license to use and access the account granted to it in the Twitter terms of service, and also that it also had an ownership interest in the content posted on the account. PhoneDog also pointed to a purported “intangible property interest” in the Twitter account’s list of followers, which PhoneDog compared to a business customer list. Finally, PhoneDog asserted that, regardless of any ownership interest in the account, PhoneDog was entitled to damages based on Kravitz’s interference with PhoneDog’s access to and use of the account, which (among other things) purportedly affected PhoneDog’s economic relations with its advertisers.

The court determined that the amount-in-controversy issue was intertwined with factual and legal issues raised by PhoneDog’s claims and, therefore, could not be resolved at the motion-to-dismiss stage. Accordingly, the court denied without prejudice Kravitz’s motion to dismiss for lack of subject matter jurisdiction. The court also denied Kravitz’s motion to dismiss PhoneDog’s trade secret and conversion claims, but granted Kravitz’s motion to dismiss PhoneDog’s claims of interference with prospective economic advantage.

The parties subsequently settled the dispute, so, unfortunately, we will never know how the court would have ruled on the variety of interesting issues that the case presented. Interestingly, although the terms of the settlement remain confidential, as of mid-September, Kravitz appears to have kept control of the Twitter account and its attendant followers. It is worth noting that the case might have been more straightforward—and the result more favorable to the company—had PhoneDog established clear policies regarding the ownership of business-related social media accounts.

Ardis Health, LLC et al. v. Nankivell

A New York case, Ardis Health, LLC et al. v. Nankivell, Case No. 11 Civ. 5013 (S.D.N.Y.), more clearly illustrates the fundamental point that companies should proactively establish policies and practices that address the ownership and use of business-related social media accounts.

The plaintiffs in Ardis Health were a group of closely affiliated online marketing companies that develop and market herbal and beauty products. The defendant was a former employee who had held a position at Ardis Health, LLC as a “Video and Social Media Producer.” Following her termination, the defendant refused to turn over to the plaintiffs the login information and passwords for the social media accounts that she had managed for the plaintiffs during her employment. The plaintiffs then filed a lawsuit against the defendant and sought a preliminary injunction seeking, among other things, to compel her to provide them with that access information.

Fortunately for the plaintiffs, they had required the defendant to execute an agreement at the commencement of her employment that stated in part that all work created or developed by defendant “shall be the sole and exclusive property” of one of the plaintiffs, and that required the defendant to return all confidential information to the company upon request. This employment agreement also stipulated that “actual or threatened breach . . . will cause [the plaintiff] irreparable injury and damage.” On these facts, the court noted that “[i]t is uncontested that plaintiffs own the rights to” the social media account access information that the defendant had refused to provide. Interestingly, the court held that the plaintiffs were likely to prevail on their conversion claim, effectively treating the disputed social media account access information as a form of intangible personal property. The court also determined that plaintiffs were suffering irreparable harm as a result of the defendant’s refusal to turn over that access information. Accordingly, the court granted the plaintiffs’ motion for a preliminary injunction ordering the defendant to turn over the disputed login information and passwords to the plaintiffs.

As far as we can tell from the reported decision in Ardis Health, the defendant’s employment agreement did not expressly address the ownership or use of social media accounts or any related access information. Nonetheless, even the fairly generic work product ownership and confidentiality language included in the defendant’s employment agreement, as noted above, appears to have been an important factor in the favorable outcome for the plaintiffs, which illustrates the advantages of addressing these issues contractually with employees—in advance, naturally. And as discussed below, companies can put themselves in an even stronger position by incorporating more explicit terms concerning social media into their employment agreements.

Eagle v. Morgan and Maremont v. Fredman

Former employers aren’t always the plaintiffs in cases regarding the ownership of business-related social media accounts.  In an interesting twist, two other cases – Eagle v. Morgan, Case No. 11-4303 (E.D. Pa.), and Maremont v. Fredman, Case No. 10 C 7811 (N.D. Ill.) – were brought by employees who alleged that their employers had taken over and started using social media accounts that the employees considered to be personal accounts.

Eagle began as a dispute over an ex-employee’s LinkedIn account and her related LinkedIn connections. The plaintiff, Dr. Linda Eagle, was a founder of the defendant company, Edcomm. Dr. Eagle alleged that, following her termination, Edcomm personnel changed her LinkedIn password and account profile, including by replacing her name and photograph with the name and photo of the company’s new CEO. Among the various claims filed by each party, in pretrial rulings, the court granted Dr. Eagle’s motion to dismiss Edcomm’s trade secret claim and granted Edcomm’s motion for summary judgment on Dr. Eagle’s Computer Fraud and Abuse Act (CFAA) and Lanham Act claims.

Regarding the trade secret claim, the court held that LinkedIn connections did not constitute trade secrets because they were “either generally known in the wider business community or capable of being easily derived from public information.” Regarding her CFAA claims, the court concluded that the damages Dr. Eagle claimed she had suffered – putatively arising from harm to reputation, goodwill and business opportunities – were insufficient to satisfy the “loss” element of a CFAA claim, which requires some relation to “the impairment or damage to a computer or computer system.” Finally, in rejecting the plaintiff’s claim that Edcomm violated the Lanham Act by posting the new CEO’s name and picture on the LinkedIn account previously associated with Dr. Eagle, the court found that Dr. Eagle could not demonstrate that Edcomm’s actions caused a “likelihood of confusion,” as required by the Act.

Eventually, the Eagle case proceeded to trial. The court ultimately held for Dr. Eagle on her claim of unauthorized use of name under the Pennsylvania statute that protects a person’s commercial interest in his or her name or likeness, her claim of invasion of privacy by misappropriation of identity, and her claim of misappropriation of publicity. The court also rejected Edcomm’s counterclaims for misappropriation and unfair competition. Meanwhile, the court held for the defendants on Dr. Eagle’s claims of identity theft, conversion, tortious interference with contract, civil conspiracy, and civil aiding and abetting. Although the court’s decision reveals that Edcomm did have certain policies in place regarding establishment and use of business-related social media accounts by employees, unfortunately for Edcomm, those policies do not appear to have clearly addressed ownership of those accounts or the disposition of those accounts after employees leave the company.

In any event, although Dr. Eagle did prevail on a number of her claims, the court concluded that she was unable to establish that she had suffered any damages. Dr. Eagle put forth a creative damages formula that attributed her total past revenue to business generated by her LinkedIn contacts in order to establish a per contact value, and then used that value to calculate her damages for the period of time when she was unable to access her account. But the court held that Dr. Eagle’s damages request was insufficient for a number of reasons, primarily that she was unable to establish the fact of damages with reasonable certainty. The court also denied Dr. Eagle’s request for punitive damages. Therefore, despite prevailing on a number of her claims, Dr. Eagle’s victory in the case was somewhat pyrrhic.

In Maremont, the plaintiff, Jill Maremont, was seriously injured in a car accident and had to spend several months rehabilitating away from work. While recovering, Ms. Maremont’s employer, Susan Fredman Design Group, posted and tweeted promotional messages on Ms. Maremont’s personal Facebook and Twitter accounts, where she had developed a large following as a well-known interior designer. Although Ms. Maremont asked her employer to stop posting and tweeting, the defendant continued to do so. Ms. Maremont then brought claims against Susan Fredman Design Group under the Lanham Act, the Illinois Right of Publicity Act, and the Stored Communications Act, as well as a common law right to privacy claim. The parties filed cross-motions for summary judgment, which the court denied with respect to the Lanham Act and Stored Communications Act claims, largely due to lack of evidence on whether or not Ms. Maremont suffered actual damages as a result of her employer’s actions. The court granted Susan Fredman Design Group’s motion for summary judgment with respect to Ms. Maremont’s right of publicity claim, based on the fact that the defendant did not actually impersonate Ms. Maremont when it used her accounts. The court also granted Susan Fredman Design Group’s motion for summary judgment with respect to Ms. Maremont’s right of privacy claim because the “matters discussed in Maremont’s Facebook and Twitter posts were not private and that Maremont did not try to keep any such facts private.”

Proactive Steps

Considering how vital social media accounts are to today’s companies, and given the lack of clear applicable law concerning the ownership of such accounts, companies should take proactive steps to protect these valuable business assets.

For example, companies should consider clearly addressing the ownership of company social media accounts in agreements with their employees, such as employee proprietary information and invention assignment agreements. Agreements like this should state, in part, that all social media accounts that employees register or manage as part of their job duties or using company resources – including all associated account names and handles, pages, profiles, followers and content – are the property of the company, and that all login information and passwords for such accounts are both the property and the confidential information of the company and must be returned to the company upon termination or at any other time upon the company’s request. In general, companies should not permit employees to post under their own names on company social media accounts or use their own names as account names or handles. If particular circumstances require an employee or other individual to post under his or her own name – for example, where the company has engaged a well-known industry expert or commentator to manage the account – the company might want to go a step further and include even more specific contractual provisions that address ownership rights to the account at issue.

In parallel, companies should implement and enforce social media policies that provide employees with clear guidance regarding the appropriate use of business-related social media accounts, including instructions on how to avoid blurring the lines between company and personal accounts. (Keep in mind, however, that social media policies need to be carefully drafted so as not to not run afoul of the National Labor Relations Act, state laws restricting employers’ access to employees’ personal social media accounts, or the applicable social media platforms’ terms of use.) Finally, companies should control employee access to company social media accounts and passwords, including by taking steps to prevent individual employees from changing account usernames or passwords without authorization.

2012 was a momentous year for social media law. We’ve combed through the court decisions, the legislative initiatives, the regulatory actions and the corporate trends to identify what we believe to be the ten most significant social media law developments of the past year–here they are, in no particular order:

Bland v. Roberts – A Facebook “like” is not constitutionally protected speech

Former employees of the Hampton Sheriff’s Office in Virginia who were fired by Sheriff B.J. Roberts, sued claiming they were fired for having supported an opposing candidate in a local election. Two of the plaintiffs had “liked” the opposing candidate’s Facebook page, which they claimed was an act of constitutionally protected speech. A federal district court in Virginia, however, ruled that a Facebook “like” “…is insufficient speech to merit constitutional protection”; according to the court, “liking” involves no actual statement, and constitutionally protected speech could not be inferred from “one click of a button.”

This case explored the increasingly-important intersection of free speech and social media, with the court finding that a “like” was insufficient to warrant constitutional protection. The decision has provoked much criticism, and it will be interesting to see whether other courts will follow the Bland court’s lead or take a different approach.

New York v. Harris – Twitter required to turn over user’s information and tweets

In early 2012, the New York City District Attorney’s Office subpoenaed Twitter to produce information and tweets related to the account of Malcolm Harris, an Occupy Wall Street protester who was arrested while protesting on the Brooklyn Bridge. Harris first sought to quash the subpoena, but the court denied the motion, finding that Harris had no proprietary interest in the tweets and therefore did not have standing to quash the subpoena. Twitter then filed a motion to quash, but the court also denied its motion, finding that Harris had no reasonable expectation of privacy in his tweets, and that, for the majority of the information sought, no search warrant was required.

This case set an important precedent for production of information related to social media accounts in criminal suits. Under the Harris court’s ruling, in certain circumstances, a criminal defendant has no ability to challenge a subpoena that seeks certain social media account information and posts.

The National Labor Relations Board (NLRB) issued its third guidance document on workplace social media policies

The NLRB issued guidance regarding its interpretation of the National Labor Relations Act (NLRA) and its application to employer social media policies. In its guidance document, the NLRB stated that certain types of provisions should not be included in social media policies, including: prohibitions on disclosure of confidential information where there are no carve-outs for discussion of an employer’s labor policies and its treatment of employees; prohibitions on disclosures of an individual’s personal information via social media where such prohibitions could be construed as limiting an employee’s ability to discuss wages and working conditions; discouragements of “friending” and sending unsolicited messages to one’s co-workers; and prohibitions on comments regarding pending legal matters to the degree such prohibitions might restrict employees from discussing potential claims against their employer.

The NLRB’s third guidance document illustrates the growing importance of social media policies in the workplace. With social media becoming an ever-increasing means of expression, employers must take care to craft social media policies that do not hinder their employees’ rights. If your company has not updated its social media policy in the past year, it is likely to be outdated.

Fteja v. Facebook, Inc. and Twitter, Inc. v. Skootle Corp. – Courts ruled that the forum selection clauses in Facebook’s and Twitter’s terms of service are enforceable

In the Fteja case, a New York federal court held that a forum selection clause contained in Facebook’s Statement of Rights and Responsibilities (its “Terms”) was enforceable. Facebook sought to transfer a suit filed against it from a New York federal court to one in Northern California, citing the forum selection clause in the Terms. The court found that the plaintiff’s clicking of the “I accept” button when registering for Facebook constituted his assent to the Terms even though he may not have actually reviewed the Terms, which were made available via hyperlink during registration.

In the Skootle case, Twitter brought suit in the Northern District of California against various defendants for their spamming activities on Twitter’s service. One defendant, Garland Harris, who was a resident of Florida, brought a motion to dismiss, claiming lack of personal jurisdiction and improper venue. The court denied Harris’s motion, finding that the forum selection clause in Twitter’s terms of service applied. The court, however, specifically noted that it was not finding that forum selection clauses in “clickwrap” agreements are generally enforceable, but rather “only that on the allegations in this case, it is not unreasonable to enforce the clause here.”

Fteja and Skootle highlight that potentially burdensome provisions in online agreements may be enforceable even as to consumers; in both cases, a consumer seeking to pursue or defend a claim against a social media platform provider was required to do so in the provider’s forum. Both consumers and businesses need to be mindful of what they are agreeing to when signing up for online services.

Six states passed legislation regarding employers’ access to employee/applicant social media accounts

California, Delaware, Illinois, Maryland, Michigan and New Jersey enacted legislation that prohibits an employer from requesting or requiring an employee or applicant to disclose a user name or password for his or her personal social media account.

Such legislation will likely become more prevalent in 2013; Texas has a similar proposed bill, and California has a proposed bill that would expand its current protections for private employees to also include public employees.

Facebook goes public

Facebook raised over $16 billion in its initial public offering, which was one of the most highly anticipated IPOs in recent history and the largest tech IPO in U.S. history. Facebook’s peak share price during the first day of trading hit $45 per share, but with a rocky first few months fell to approximately $18—sparking shareholder lawsuits. By the end of 2012, however, Facebook had rebounded to over $26 per share.

Facebook’s IPO was not only a big event for Facebook and its investors, but also for other social media services and technology startups generally. Many viewed, and continue to view, Facebook’s success or failure as a bellwether for the viability of social media and technology startup valuations.

Employer-employee litigation over ownership of social media accounts

2012 saw the settlement of one case, and continued litigation in two other cases, all involving the ownership of business-related social media accounts maintained by current or former employees.

In the settled case of PhoneDog LLC v. Noah Kravitz, employer sued employee after the employee left the company but retained a Twitter account (and its 17,000 followers) that he had maintained while working for the employer. The terms of the settlement are confidential, but news reports indicated that the settlement allowed the employee to keep the account and its followers.

In two other pending cases, Eagle v. Edcomm and Maremont v. Susan Fredman Design Group LTD, social media accounts originally created by employees were later altered or used by the employer without the employees’ consent.

These cases are reminders that, with the growing prevalence of business-related social media, employers need to create clear policies regarding the treatment of work-related social media accounts.

California’s Attorney General went after companies whose mobile apps allegedly did not have adequate privacy policies

Starting in late October 2012, California’s Attorney General gave notice to developers of approximately 100 mobile apps that they were in violation of California’s Online Privacy Protection Act (OPPA), a law that, among other things, requires developers of mobile apps that collect personally identifiable information to “conspicuously post” a privacy policy. Then, in December 2012, California’s Attorney General filed its first suit under OPPA against Delta, for failing to have a privacy policy that specifically mentioned one of its mobile apps and for failing to have a privacy policy that was sufficiently accessible to consumers of that app.

Privacy policies for mobile applications continue to become more important as the use of apps becomes more widespread. California’s OPPA has led the charge, but other states and the federal government may follow. In September, for instance, Representative Ed Markey of Massachusetts introduced The Mobile Device Privacy Act in the U.S. House of Representatives, which in some ways would have similar notice requirements as California’s OPPA.

Changes to Instagram’s online terms of service and privacy policy created user backlash

In mid-December 2012, Instagram released an updated version of its online terms of service and privacy policy (collectively, “Terms”). The updated Terms would have allowed Instagram to use a user’s likeness and photographs in advertisements without compensation. There was a strong backlash from users over the updated Terms, which ultimately led to Instagram apologizing to its users for the advertisement-related changes, and reverting to its previous language regarding advertisements.

Instagram’s changes to its Terms, and subsequent reversal, are reminders of how monetizing social media services is often a difficult balancing act. Although social media services need to figure out how they can be profitable, they also need to pay attention to their users’ concerns.

The defeat of the Stop Online Piracy Act (SOPA) and the PROTECT IP Act (PIPA)

Two bills, SOPA and PIPA—which were introduced in the U.S. House of Representatives and U.S. Senate, respectively, in late 2011—would have given additional tools to the U.S. Attorney General and intellectual property rights holders to combat online intellectual property infringement. A strong outcry, however, arose against the bills from various Internet, technology and social media companies. The opponents of the bills, who claimed the proposed legislation threatened free speech and innovation, engaged in various protests that included “blacking out” websites for a day.  These protests ultimately resulted in the defeat of these bills in January 2012.

The opposition to and subsequent defeat of SOPA and PIPA demonstrated the power of Internet and social media services to shape the national debate and sway lawmakers. With prominent social media services such as Facebook, YouTube, Twitter, LinkedIn and Tumblr opposed to the bills, significant public and, ultimately, congressional opposition followed.  Now that we’ve witnessed the power that these services wield when acting in unison, it will be interesting to see what issues unite them in the future.

On September 27, 2012, California Governor Jerry Brown signed a bill that restricts employer access to the “personal social media” of employees and applicants for employment.

Assembly Bill 1844 (“AB 1844”) adds to the California Labor Code new section 980.  Under this section, an employer may not “require or request” an employee or applicant to do any of the following:

  • Disclose a username or password for the purpose of accessing personal social media;
  • Access personal social media in the employer’s presence; or
  • Divulge any personal social media, except in connection with the investigation of allegations of an employee’s misconduct or violation of applicable laws.

The exception for employee investigations applies if the employer reasonably believes that the personal social media is relevant to the investigation or to a related proceeding, and does not use the personal social media for any other purpose.

AB 1844 does not preclude an employer from requiring or requesting an employee “to disclose a username, password, or other method for the purpose of accessing an employer-issued electronic device.”

AB 1844 expressly prohibits retaliation against an employee or applicant who declines to comply with a request that violates the terms of AB 1844, but it does not immunize the individual from any adverse action that is otherwise permitted by law.

Notably, the state Labor Commissioner is not required to investigate or determine violations of AB 1844.

AB 1844, which passed in both the California Senate and Assembly by wide margins, is similar to recently enacted laws in Delaware, Maryland, and Illinois.  During this legislative season, at least 13 states have proposed legislation restricting employer access to employee social media accounts, including Massachusetts, Michigan, Minnesota, New Jersey, New York, Ohio, Pennsylvania, South Carolina, and Washington.