December 17, 2009

Employer Ownership of Employee Social Media Accounts

Posted in Best practices, Courts and social media, Employee issues, Facebook, LinkedIn, Productivity, Social networking policy, Twitter, Uncategorized, Web 2.0 tagged , , , , , , , , , , at 1:13 pm by bizlawblog

Over the last 35 years, I’ve spent a lot of time dealing with disputes between employees and their employers. I’ve been on both sides of the table, drafting and enforcing non-compete agreements, and helping employees break those, which did not adhere to legal or moral principles.

In “the old days,” some of the primary issues related to whether the employer could keep an employee, or former employee, from using information the employer said was “proprietary” and, in many cases, whether the now departed employee had been using that information, while still employed, to set up or assist a competitor. With the onset of social media, many “prospectors” are now using social media to find business prospects and to maintain a relationship with them.

In some cases, the employer will mandate that employee are to engage in using social media channels, such as LinkedIn and Facebook to hunt for prospects or deal with customer service issues. In some cases, it is the employee who suggests this tactic or uses it, often outside of the office environment, to do the prospecting. As is the case with the enforceability of non-compete agreements, there is a great deal of misinformation and confusion about what the law says about all this. As is also the case with non-compete agreements, what the law says may be different in different jurisdictions. In Kentucky, for instance, the case law has matured in different directions on some non-compete issues, between the state court system and the federal courts in Kentucky. This is great for lawyers, but not necessarily so for those trying to find their way.

The relatively new world of social media adds a new layer of complexity to this, and the ownership of social media accounts, as well as ownership of the contacts and other data contained therein, has become an increasing source of questions for employers and their lawyers. Many employers ban the use of social media, on site or off, and particularly prohibit unauthorized references to the employer, brands, other employees, “the boss,” etc. Some of these fears, as described in David Kelleher’s article, 5 Problems with Social Networking in the Workplace, are well deserved, and some are not. Fortunately for employers, most, if not all of this is easily clarified with some basic but well drafted documents.

Long before the advent of the social media age, employers routinely required employees to sign non-compete and non-disclosure agreements. If properly drawn, these agreements defined what intellectual property, including clients, prospects, and other proprietary or “sensitive” information belonged to the employer and was prohibited for post employment or other unauthorized use. Likewise, courts have dealt for many years with the issue of the employer’s right to monitor and screen employee communications, including e-mail.

What is relatively new these days is the ownership of social media accounts and content. I have represented many client groups, such as those in the insurance business, where it is relatively common for agents to take their “book of business” or client accounts with them from agency to agency. In many cases there are non-compete agreements binding the parties. Since moving around is so common, however, many agencies will agree to allow a well-networked agent to come in, with the option to take their “book of business” with them upon departure. Only new clients generated at the new agency, or other particular “house accounts” might be protected, in order to induce a successful agent to come on board. This too can be easily defined, and I’ve drawn up hundreds of these agreements over the years.

The ownership of an employee’s “personal” LinkedIn accounts and contacts, however, has not been well defined by the courts, at least on a specific basis. Likewise, Facebook and Twitter accounts are becoming some of the most valuable tools in the hunt for prospects and retention efforts to maintain current business. In many cases, these accounts have been created by an individual prior to the employment situation in which they are used. In some cases, it is the employer which provides the basics, and may even be setting up the account used by the employee. Witness the note from Tony Hsieh, CEO of Zappos.com, providing employees with a Beginner’s Quick Start Guide and Tutorial to Using Twitter. Once again, a clear employee use policy and non-compete agreement and NDA can resolve the issues to avoid most disputes and win the rest. Having a well thought out damage control procedure is also helpful.

For those not endowed with good legal and HR backup in these areas, social media sources can provide the answer to the many of the problems involved in their use. Typically, the cases involving confidentiality revolve around the expectation of privacy. A subset of this issue relates to whether a policy is in place, existence of password use, and other indications the social media content would normally and reasonably be anticipated to be private or something in which the employer had an interest. This has been the primary rule on e-mail accounts and content for many years and has been often litigated, even prior to the relatively new federal rules on e-discovery. This is not much different from court decisions indicating an employer can secretly videotape an employee on the job.

Beth Harte’s nice article on this, Who owns your Twitter or Facebook Connections?, is a good start. As she points out:

You might not like what I am about to say here, but I believe that if a company is paying you to connect with people online on their behalf…they own those connections…

Take my Twitter/Facebook accounts, I am Beth Harte on both. If I were to join a company in marketing capacity and continue to increase my connections while they are paying me, I believe those connections are the property of my employer. Or are they?

How do we address this potential issue? Here’s one thought…

Prior to accepting a job, negotiate that all followers/friends (existing or new) will remain your property and that the company has the right to “borrow” your accounts and connections for the period of your employment.

Using the example of my insurance agency clients, Harte’s suggestion would probably be:

Prior to accepting a job, negotiate that all followers/friends (existing or new) will remain your property and that the company has the right to “borrow” your accounts and connections for the period of your employment.

Does that work? Would employers buy into that? Would we need to prove the value of our accounts before they would accept those negotiating terms?

Blogging provides an even more interesting set of problems. Some, such as Chris Gatewood, feel “Employers cannot control their employees’ online conduct away from the office, and for the most part, they should not try.” In many cases, employee blogs are primarily personal, but may contain statements about their employer, the employer’s products or services, and sometimes about policies, other employees, etc. Likewise, it is easy for a current or former employee to “slip” and post something about a new technology the person has worked on, or other information the employer would consider proprietary. Once again, a good non-disclosure agreement can deal with these issues in advance.

Joshua-Michele Ross points out in his article, A Corporate Guide For Social Media:

Big corporations are scratching their heads trying to figure out how to harness the benefits of increased employee participation while mitigating the risks. Clearly there is no one-size-fits-all: If you are in financial services you have unique concerns for privacy, if you are part of the YMCA, you must be aware that having counselors “friend” teenagers is not appropriate, etc.

While there are possible negatives involved in having employees on the social Web, most employees have common sense. Begin with a set of possibilities first (increasing awareness, improving customer service, gaining customer insight and so on) then draw up a list of worst-case scenarios (bad mouthing the company, inappropriate language, leaking IP, to name a few). Modify the guiding principles for your employees below to help mitigate the risks you’ve identified.

Once you embrace having your employees participate in the social Web, give them a few basic guiding principles in how they conduct themselves.

While issues related to ownership of social media accounts and content are relatively well defined, in those cases where there are clear policies and agreements in place, as well as where the activity is clearly sponsored or encouraged by the employer, and the employee is using the employer’s resources to engage in such activities, the law is less settled in the case of pre-existing “personal” accounts used with a new employer, or used without the employer’s knowledge or resources. These can likewise be resolved easily with a good agreement, but we lawyers are waiting to pay our kids’ college tuition, dealing with those cases where the employer or employee has not been perceptive enough to resolve this in advance with a basic set of written agreements and policies.

This area of the law is rapidly changing and newer technologies, such as Twitter, and concepts such as “followers,” will provide the need for professional assistance to help manage these issues, and the risks they entail, for many years to come. Yesterday’s non-compete and non-disclosure agreement, as John Jantsch points out in his article, Do You Have a Social Media Non-Compete?, may not work tomorrow, unless it is particularly well drawn to provide for such new technologies and concepts.

I try hard to be proactive with my clients, but I “love” clients who get their legal advice, and forms, online and then have to make “The Call” to the lawyer to seek help. I believe it may have been GM’s Mr. Goodwrench commercials, which proclaimed, “pay me now or pay me later.” In these cases, the pay is much better for the lawyers “later” and for the parties, earlier.

That’s what I think. Please leave a comment and let us know what you think.

If you are really interested, I just started yet another free group on LinkedIn, Social Media Search and Forensics. Many of these articles and discussion about them are posted there. Please join us.

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October 30, 2009

What Are Your Employees Doing with Social Networking tools?

Posted in Best practices, Courts and social media, Criminal activity, Employee issues, Productivity, Social Media Tools, Web 2.0 tagged , , , , , , , , , , , , , , , , at 1:47 am by bizlawblog

It seems hard to find anything these days where there are not arguments for and against the proposition under consideration. Using the words “employee” and “social networking” in the same sentence conjures up both, and often with strong opinions.

In one camp, you have arguments, such as those expressed in Rebecca Kelley’s article, Why Companies Shouldn’t Block Social Media in the Workplace. She accurately points out that allowing employees to engage in social media on the employer’s nickel, as it were, can be good for morale, and even result in great marketing for the company. Pointing out the ambivalence of many employers, she says:

Ironically, according to a study cited in the article, “94% of companies are continuing to invest in online communities and social media.” Over half of U.S. businesses block social media sites at work, yet 94% of businesses are acknowledging the importance of social media and are starting to invest in it? It’s kind of like being a retail business that doesn’t let its employees buy anything.

I’m likely biased because I get paid to tinker around on social media and networking sites, but I do think that businesses should allow responsible and periodical usage of social media at work …

Employers can learn, the hard way, how quickly this seemingly good thing can become a bad one.

Jenna Wortham’s article, Internet Protocol: Overzealous Friending and IMing With the Boss points out that “the same rules don’t apply online as they do in the real world.” Although there is an ever-increasing number of articles, such as Blaine Bullman’s 6 Benefits Of Social Networking, espousing the virtues of allowing or even mandating employee use of social media on company time and with company resources, there is certainly another side to this for the employer. While Bullnan’s article talks about employees building meaningful relationships, engaging with your target audience and finding new insights from the experience, employers must be wary of what employees might be doing with those “meaningful relationships.”

A recent NewScientist article by Ewen Callaway, Brain scanners can tell what you’re thinking about, gives us hope (or fear) that some day soon, scientists will perfect “mind reading” technologies currently in development, which neuroscientists are using to combine brain scans with pattern-detection software to “pry open a window into the human mind.” They say the benefits of this technology should include “gaining a better understanding of the brain and improved communication with people who can’t speak or write, such as stroke victims or people with neurodegenerative diseases. There is also excitement over the possibility of being able to visualize something highly graphical that someone healthy, perhaps an artist, is thinking.” Acknowledging, “it’s an idea that’s as tantalizing as it is creepy,” Callaway notes “despite – or perhaps because of – the recent progress in the field, most researchers are wary of calling their work mind-reading. Emphasizing its limitations, they call it neural decoding.”

If you think this is science fiction, rather than science:

  1. Check out my reference to William Shatner’s book in the last post on this blog; and
  2. 2. Read Colin Barras’ article, Super slow-motion camera can follow firing neurons, describing development of a camera sensor able to film action at 1 million frames per second. That means it can “capture impulses hurtling through firing nerve cells, and its resolution is good enough to film the microsecond-long pulse-like nerve signals that speed through networks of neurons at up to 180 kilometres per hour.”

Bill Gates, in his 1999 classic book, Business @ the Speed of Thought, tried to answer the question, somewhat rhetorically, “So where do you want to go tomorrow?” His answer, not surprisingly, was that, thanks to technology, the speed of business is accelerating at an ever-increasing rate, and to survive, it must develop an infrastructure–a “digital nervous system”–that allows for the unfettered movement of information inside a company.

These days, we might look at this and say, “that is so ten years ago!” If we’re at the point where we have cameras which can shoot pictures at such a slow speed they can literally capture the speed of thought, as brain neurons fire off our thoughts, we’re at least well down the path of developing a “digital nervous system.” Add to that the developing technology which allow us to engage in neural decoding, a/k/a “mind reading,” then, as Dorothy said in The Wizard of Oz, we’re not in Kansas any more.

While Rebecca Kelley’s article may say social networking employees are a good thing, others, like Jim Singer, in his article, Employee Blogging and Use of Social Media – Managing the Risk, acknowledge there can be a downside to this. Granted, there are typically ways that employers can harvest benefits while minimizing risk, but when your employees are connected to the “outside world” on a pretty much continuous basis, both at work and outside of it, there would seem to be little chance of employers not getting slammed by them periodically.

I will explore this topic in much greater depth and in all its many facets, in later posts on this blog. I hope that most employers have at least heard of some of the headaches employees can generate for their current or former employers, through their communications online. Perhaps the oldest and steadiest of these is the damage of the disgruntled employee.

Such disgruntled employees may still be working for you, without your knowledge they are, in fact “disgruntled.” Since we’re apparently still a few neurons short of a full deck on the “neural decoding thing,” we probably can’t expect management staff to always detect just how unhappy a current employee may be, but we may get an eye full after they leave.

Web sites, such as Glassdoor.com are popping up all over. That particular site, referenced by Daniel Schwartz in his article, Dirty Laundry: Airing Employee Grievances Online…And Around the World, in the Connecticut Employment Law Blog, gives us a picture of how bad this can get. In fact, to test this, I just checked Glassdoor.com, using a Fortune 500 employer one of my sons had worked for as the sample. Here are just a few of the comments I found on this employer:

  • “Maybe it was a great place once, but I hate it here now.” (technical staff)
  • “Great People, Great Ideas, but no leadership to deliver” product marketing manager
  • “really sucks no opportunity” (sales, two years ago)

No doubt, if you’re trying to recruit the best and brightest, you’ve got a problem when those folks are checking such sites before even contacting your company for an interview. It gets worse.

John Jantsch’s article, Do You Have a Social Media Non-Compete? certainly poses a very valid question. Jantsch says:

This is probably a touchy subject in some circles, but as more and more companies encourage social media participation from employees and even create job titles such as Director of Community, it’s something that marketers are going to need to deal with. Many companies have created social media policies and strategies to address things like who can represent the company and what they can and can’t say, but as companies put real faces, not company logos, on the profiles of their staff and those real faces connect and build relationships, the growing question is – who owns the content, profile and even followers?

As with most question these days regarding social media, ask a question and you’ll get a million answers. Beth Harte has one for this question in her article, Who owns your Twitter or Facebook Connections? She says:

As you know, I’ve been reviewing and questioning personal branding lately and I have one final question (or in this case, lots of questions) for you all. Quite simply, from a “You 2.0″ perspective, if you work for a company and you build up your Twitter Followers or Facebook friends from the hours of 8am-5pm (or whatever your daily work hours are)…who owns those connections made during those hours? And as you know, you don’t need to use the company network to Twitter or Facebook, so then what?

You might not like what I am about to say here, but I believe that if a company is paying you to connect with people online on their behalf…they own those connections. Even if the accounts are under your name. I mean, they paid you, right? Or is that wrong? Or is it both? What are the ethics?

Frankly, if you get to the point of even being able to talk about ethics in this situation, you’re probably ahead of the game. In my thirty-five or so years of practicing law, I’ve done quite a bit of corporate work for insurance companies. Historically, small insurance agencies become bigger companies buy buying the “book of business” of retiring or less successful agencies. In negotiating these deals, I often find my clients, and others, offering deals that would not fly in other industries.

Sometimes I find that, to make the deal work, the growing company will acquire an agency with a buy-back provision of some sort. What this means, quite often, is that the smaller agency retains some sort of residual right to the client base it brings into the acquiring agency. In case things don’t work out down the road with the “merger,” the acquired agency may very well have the right to take the client base it brought into the deal, and detach it to play the game another day, either on its own, or with another hungry, acquiring agency.

This sort of dangerous cat and mouse game is not confined to insurance agencies, but can certainly provide some college tuition for your kids if you’re one of the lawyers involved in representing the parties. One can definitely anticipate the various parties will be trying to get their best hold on the “juicy” clients during the merged period, knowing, full well, that the norm involves periodic docking and undocking from various competitors.

Sometimes it is easy to detect that somebody is playing games with you. An article too funny to let me avoid inserting it here is Michael Arrington’s Schwarzenegger Gives California Legislature A Hidden Finger.

Often, the “game” is more sinister and the results to the employer far deeper, as Carlye Adler’s article, ‘A rival stole my staff,’ indicates.

In 2004, 10 employees — or one-third of the mortgage broker’s staff — left to work for CTX Mortgage, a much larger rival. Killian claimed the employees stole 150 pending loans, worth nearly $1 million in fees, along with customer lists and boxes of confidential files. Between 2004 and 2005, Charter Oak’s revenues plummeted from more than $3.5 million to $300,000.

Charter Oak sued CTX and the 10 defectors, claiming conspiracy, unfair trade practices and misappropriation of trade secrets. Four years and some $500,000 in legal bills later, the verdict arrived in July: Charter Oak lost on all counts.

The lesson for other small businesses? Get your paperwork in order.

“Charter Oak didn’t have confidentiality agreements and noncompete contracts,” says Milford, Conn., attorney Tim Bishop, who represented Charter Oak in the original lawsuit. “They were a typical small business that grew faster than expected.”

Noncompete agreements are by their nature, essentially anti-social, in that they are designed to prevent employees and others from “socializing” with others. This would seem to be the antithesis of social networking, which, of course, is designed to facilitate folks getting together. While there certainly may be an advantage or even a necessity for employee use of social networking tools during and after work, the prudent entrepreneur must be aware of the many opportunities for mischief.

That’s what I think. Please leave a comment and let us know what you think.

October 26, 2009

A Second Life for Twittering Spies

Posted in Best practices, Courts and social media, Criminal activity, Productivity, Social Media Tools tagged , , , , , , , , , , , , , , , at 12:46 pm by bizlawblog

Social networking is apparently taking on a second life, no put intended. Social networks are obviously fertile resources for spies of all sorts. In fact, Noah Shachtman reports, in an article for Wired Danger Room:

America’s spy agencies want to read your blog posts, keep track of your Twitter updates — even check out your book reviews on Amazon.

In-Q-Tel, the investment arm of the CIA and the wider intelligence community, is putting cash into Visible Technologies, a software firm that specializes in monitoring social media. It’s part of a larger movement within the spy services to get better at using ”open source intelligence” — information that’s publicly available, but often hidden in the flood of TV shows, newspaper articles, blog posts, online videos and radio reports generated every day.

U.S. Spies Buy Stake in Firm That Monitors Blogs, Tweets

One must ask, is it a good thing that government agencies, such as the CIA, are possibly monitoring the social media networks that seem to be rapidly replacing other channels as our primary method of communication? Part of the answer may come from another article by Shachtman:

Could Twitter become terrorists’ newest killer app? A draft Army intelligence report, making its way through spy circles, thinks the miniature messaging software could be used as an effective tool for coordinating militant attacks.

For years, American analysts have been concerned that militants would take advantage of commercial hardware and software to help plan and carry out their strikes. Everything from online games to remote-controlled toys to social network sites to garage door openers has been fingered as possible tools for mayhem.

This recent presentation — put together on the Army’s 304th Military Intelligence Battalion and found on the Federation of the American Scientists website — focuses on some of the newer applications for mobile phones: digital maps, GPS locators, photo swappers, and Twitter mash-ups of it all.

Spy Fears: Twitter Terrorists, Cell Phone Jihadists

Ken Monro, however, shows us another side of the impact of social networking on spies. In his article for SC Magazine, he gives us all a lesson about  what we post online. We know that colleges, employers, and many others regularly look for facebook or LinkedIn profile information before making decisions important in our lives. Typically, we don’t even know just how much they know about us before reviewing that key application for college, making a hiring decision, or attending an important business meeting with us.

For spies, this can be a life and death situation. Monro’s article even points out:

…if you’re planning on having a second identity for undercover work, it doesn’t help if your photos, friends and real name are splattered all over various social networking sites. Try finding a student at a university who hasn’t done just that.

The UK’s intelligence agencies are worried. From schoolchildren on Bebo, through Facebook-obsessed young professionals, to well-networked CEOs on LinkedIn, having an online presence is a must in this day and age. But with the explosion of social networking sites, it has become virtually impossible to find recruits who don’t have some sort of an online trail.

Pandora’s box is well and truly opened, so how do you go about suppressing your online identity?

Social networking websites make recruiting spies difficult

Let’s add another twist to this. How do spies, or anyone else for that matter, know what is real when they snoop online? Spies are, of course, trained professionals and are presumably much better at this than the average college admission office employee or Fortune 500 employer. On hand, how do we know what a potential business partner, banker, or friend might pick up about us online?

What do we even know about our current president? The title of Jason Linkin’s recent Huffington Post article, Fake Obama Thesis Story Goes Viral, Because Of Stupidity, could give us a clue.

We know many companies are under siege from disgruntled employees and competitors, sometimes without even knowing it. Faked reports about a company’s customer service or product reliability, represent an increasing form of commercial terrorism, often communicated via blogs and other forms of social media. Social media infringement on intellectual property rights appears rampant, with defensive tools lagging well behind those used by the abusers. If you don’t believe it, check out Willis Wee’s article, 10 Brands Claimed By Twitter Cybersquatters.

Where is all this leading? Keep reading. Tracking that is a primary reason for this blog.

That’s what I think. Please leave a comment and let us know what you think.