Employee Social Media Account as Stolen Property?

In some recent articles, we have written about a dispute between sports reporter Andy Bitter and the owners of the Roanoke Times media outlet. As we have discussed, Mr. Bitter was, until recently, a reporter covering the Virginia Tech Hokies sports teams for the Roanoke Times. The dispute centers around the ownership of the Twitter account used by Mr. Bitter. The Roanoke Times has sued Mr. Bitter because he has refused to turn over access to the account and, in so refusing, Mr. Bitter is accused of misappropriated trade secrets owned by the Roanoke Times. See Washington Post news report here.

A recent case here in California interpreting the Penal Code raises an interesting question of whether efforts to take control of an employee’s twitter account or any other social media account might constitute “receiving stolen property.” See Cal. Penal Code, §496. Under the Penal Code, any person may sue another, including an employer, for receiving stolen property. The act allows the plaintiff to recover statutory damages, costs, and reasonable attorney’s fees. Such a private right of action is in addition to any action that might be filed by California governmental authorities. The case in question involved an employee’s labor. See Lacagnina v. Comprehend Systems, Inc., Case No. A147559 (Cal. App. 1st Dist. Aug. 3, 2018).

The case brought to mind other things that a creative lawyer might argue constitutes stolen “property.” Fortunately for San Diego employers, the Lacagnina court held that an employee’s labor is NOT considered “stolen property.” Here is a quick rundown of the case.

San Diego Corporate Law: Lacagnina Fails in Efforts to Have Labor Deemed “Stolen Property”

The Lacagnina case involved a dispute between an employer and one of its employees who was fired. The employee filed suit for breach of contract and other legal claims, asserting that he lost wages and benefits in excess of $2.25 million plus other damages. He also made a claim under section 496 of the Penal Code that his labor was stolen and, as such, the employer had received “stolen property.” The employee sought statutory damages (three times his damages), plus costs and attorneys’ fees. Needless to say, the employer vigorously challenged the idea that it had received “stolen property.”

At the trial level, the employee was victorious after a 10-day jury trial. However, the trial judge denied the claims made under the Penal Code. That is, the trial judge refused to award Lacagnina triple the damages awarded by the jury.

The California Court of Appeals affirmed. The court deemed that, in a wage dispute, the argument that labor was “stolen property” was inconsistent with the language of the penal code, the relevant labor laws, and the intent expressed by the California General Assembly. Moreover, Lacagnina’s labor was not “stolen” at the time that the wage dispute arose. Penal Code §496 deals with receiving “stolen property” and the two words must be read together. For those and other reasons, the Court of Appeals affirmed.

San Diego Corporate Law: Can Social Media Accounts be “Stolen Property?”

With respect to Twitter and social media accounts, it would not be surprising to see creative lawyers argue that such accounts are “property” subject to statutes like the Penal Code §496. Logically, social media accounts are more like “property” than an employee’s labor. Clearly, such “property” can be stolen and received by another. Could an employer’s efforts to seize control of such accounts be considered efforts to receive “stolen property?” Could an employee’s refusal to turn over control of an account — like Mr. Bitter — be considered an EMPLOYEE’s receipt of stolen property?

While not yet settled at the time of this writing, it is our expectation that Section 496 of the Penal Code will not be extended to issues like social media accounts. While the Lacagnina court dealt specifically with a wage dispute, the court did caution that allowing the section 496 claim would convert every “run-of-the-mill commercial dispute” into a “theft claim.” The Court of Appeal clearly expressed a negative view of that result.

Contact San Diego Corporate Law

If you would like more information, contact attorney Michael Leonard, Esq., of San Diego Corporate Law. Mr. Leonard provides legal services related to business law, private securities offerings/sales, the sale/purchase of a business, and for mergers and acquisitions. Mr. Leonard can also assist with setting up a new corporate entity, annual corporate maintenance, and reviewing and drafting business contracts. Mr. Leonard was recently named as “Best of the Bar” by the San Diego Business Journal for 2018. Mr. Leonard has received that honor for the past four years. Mr. Leonard can be reached at (858) 483-9200 or via email.

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