The Evolution of Customer Lists: Social Media Connections and Trade Secret Protection

Social Media has provided tremendous advantages to businesses and business owners since its inception. The fact that Social Media has only been around since 2003 gives rise to a significant number of legal issues ranging from privacy laws to discrimination and trade secrets. Courts have only recently started addressing many of these ever-changing legal questions and the decisions vary. This article will first explore whether courts consider social media connections to be trade secrets and second, what companies can do to protect themselves and their client lists.

Social media presents unique challenges to demonstrating that a client or customer connection through social media sites is a protectable trade secret. Prior to the widespread use of the internet, a company’s customer list would have undoubtedly been considered a trade secret, but the availability of information on the internet has changed how courts view such information.[1]

Whether an employee’s social media contacts, such as LinkedIn connections, Twitter followers, or MySpace and Facebook friends are an employer’s trade secrets is an issue on which courts are divided.[2] In 2010 the federal court in the Eastern District of New York held that a database of contact information for potential clients at a recruiting firm was widely available to the public through social media such as Facebook and LinkedIn, and therefore was not a trade secret.[3] More recently, the federal court in the Eastern District of Pennsylvania held that LinkedIn connections are not trade secrets because the employer’s customers were listed on the company website and the customers’ contact information was either largely known in the business community or could easily be acquired from public information.[4] In contrast, in 2012 a federal court in Colorado held that the expense and time spent creating a MySpace friend list, in addition to the non-public information included within the list, was sufficient to survive the defendant’s motion to dismiss.[5] The defendant in that case argued that the Myspace friend list was available to the public via the social media site and could not be considered a trade secret.[6]

Employers wanting to utilize and incorporate social media into their businesses run the risk of facing this kind of dilemma upon the termination or resignation of an employee. However, there are ways employers can protect themselves. First, employers should establish a written agreement specifically addressing social media.[7] Employers should also include social media guidelines in their non-disclosure agreements.[8] Second, employers should create any social media accounts in which, upon termination or resignation of an employee, the employer wants to maintain an ownership-interest.[9] By signing up for the account, the employer is representing that they have an ownership stake in the account.[10] Third, employers should know the password for the social media account at all times and change it as soon as an employee leaves. [11]

Ultimately, the parties are fighting over friends, followers, and connections and courts must decide how to place a value on such entities. In the meantime, employers should put the proper guidelines in place to ensure they are protected if they find themselves in this kind of situation.

[1] Gordon v. Landau, 321 P.2d 456 (1958); Sasqua Grp., Inc. v. Courtney, No. 10-528, 2010 WL 3613855 (E.D.N.Y. Aug. 2, 2010).

[2] See Gordon v. Schwartz, 305 P.2d 117 (1956) (finding that a list of customers that is not ordinarily entitled to judicial protection may become a trade secret if the list includes confidential information pertaining to the value of the customers); but see Dowell v. Biosense Webster, Inc., 102 Cal. Rptr. 3d 1 (2009) (affirming the trial court’s holding that a customer list is not a trade secret because the customers are easily identifiable from a number of public directories and resources).

[3] See Sasqua, supra note 1.

[4] Eagle v. Morgan, No. 11-4303, 2011 WL 6739448 (E.D. Pa. Dec. 22, 2011).

[5] Christou v. Beatport, LLC., 849 F. Supp. 2d 1055 (D. Colo. 2012).

[6] Id.

[7] Eric B. Meyer, Who owns the LinkedIn account you maintain for an employee?, The Employer Handbook (Jan. 5, 2012, 7:00 AM),

[8] Id.

[9] Id.

[10] Id.

[11] Id.

Author: Meredith Doherty

Meredith Doherty is the Managing Projects Editor of the Rutgers Computer and Technology Law Journal. This past summer, she was the Legal & Compliance Intern for Palisade Capital Management in Fort Lee, New Jersey. Meredith has also worked as a Judicial Intern for the Honorable Carolyn E. Wright in Essex County Superior Court and as a Law Clerk for the Law Office of Kirsten Scheurer Branigan in Nutley, New Jersey. Prior to law school, she was the Director of Operations for Northwestern Mutual Financial Network. A native of Dallas, Texas Meredith received her undergraduate degree from the University of North Texas in 2007. Following graduation in 2015, she plans to pursue a legal career in the financial regulatory and compliance field. In her spare time, Meredith enjoys running, art auctions and she is an avid Dallas Mavericks fan.

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