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Linda Eagle v. Sandi Morgan

March 12, 2013

LINDA EAGLE, PLAINTIFF,
v.
SANDI MORGAN, HAITHAM SAEAD, JOSEPH MELLACI, ELIZABETH SWEENEY, LISA ARNSPERGER, QAMAR ZAMAN, AND EDCOMM, INC., DEFENDANTS.



The opinion of the court was delivered by: Buckwalter, S . J.

MEMORANDUM

I. FINDINGS OF FACT

The following consists of the facts of this case upon which Part II, the Conclusions of Law, are based.

Plaintiff Linda Eagle is a resident of the State of New York and received her triple doctorate in communications, business, and psychology from Temple University in 1980. (Stipulation 6; N.T. 20:13--16.) Together with Clifford Brody, she founded Defendant Edcomm, Inc. ("Edcomm"), which is a banking education company that provides services on-line and in person to the banking community. David Shapp was also a shareholder. (N.T. 40:5--22; 43:13--44:17.) Defendant has admitted that Dr. Eagle was well-published in banking industry publications, was quoted in newspapers and magazines, and presented at industry conferences around the world. (N.T. 17:3--11.) Further, Clifford Brody testified as to Plaintiff's extensive experience with multiple corporations in the banking education industry and about her repeated generation of substantial annual sales. (N.T. 107:2--112:6.)

On October 7, 2010, a company named Sawabeh information Services Company ("SISCOM") entered into a term sheet with Eagle, Brody and Shapp wherein SISCOM purchased all of the outstanding common shares of Edcomm. The three individuals remained employed by Edcomm as executives, but they were involuntarily terminated by defendant Haitham Saead on June 20, 2011. (N.T. 54:2--17.) This lawsuit followed soon thereafter, the principal thrust of which is the alleged illegal use of Eagle's LinkedIn account by Edcomm, to her economic detriment.

The background of this allegation essentially starts with Brody's decision, made sometime in or before May of 2009, to use LinkedIn as a sales and marketing tool for the Edcomm business. LinkedIn is a business-oriented social networking site accessible through the internet for contacting current and potential business acquaintances and allowing users to invite other LinkedIn users to "connect" and communicate directly via e-mail. (N.T. 100:3--101:11; 105:19--25.) As the CEO at the time, Brody found that "LinkedIn was awesome" for marketing, and he testified enthusiastically about it. (N.T. 100:7--23; 101:3--11.) On May 3, 2009, Plaintiff created her own LinkedIn account using her Edcomm e-mail address. (N.T. 49:18--51:5.) Per the LinkedIn "User Agreement," however, the account belonged to Eagle alone and she was individually bound by the User Agreement.*fn1 (Defs.' Ex. E.)

As time passed, it became the policy for Edcomm not only to urge employees to create LinkedIn accounts, but also to become involved in the account content. (N.T. 128:2--9; 130:23--131:23.) To this end, Edcomm developed employee policies covering on-line content. Notably, however, Edcomm did not require that employees have LinkedIn accounts. (N.T. 125:10-117.) Moreover, at no time did Edcomm pay for its employees'- including Dr. Eagle's-LinkedIn accounts. (N.T. 124:13--125:9.) In other words, although Edcomm did not require employees to maintain LinkedIn accounts or subsidize the maintenance of such accounts, it provided guidelines if an employee wanted to participate. (N.T. 132:11--18.) It is also clear that Edcomm became concerned about LinkedIn accounts and former employees. An email chain on March 2, 2010, encapsulates this concern:

From: Cliff Brody

Sent: Tuesday, March 2, 2010 1:36 PM To: Linda Eagle; David Shapp; Kathy Luczak Subject: few loose ends David....

Can you look into what our requirements/responsibilities are as far as LinkedIn accounts and former employees.

CB Clifford G. Brody Founder & Chief Executive Officer The Edcomm Group Banker's Academy

From: David Shapp

Sent: Tuesday, March 2, 2010 2:17 PM To: Cliff Brody; Linda Eagle; Kathy Luczak Subject: few loose ends I think we can leave it up forever and mine the information contained within as long as we do not pretend to be her. The company/employer owns all data on its hardware, including email archives. The employee has no rights at all in his email identity. Ordinarily, as a courtesy, employers tend to keep old accounts active for a limited time in order to avoid rejecting business-related communications, and forward personal emails to the former employee. There would potentially be an issue if the employer used the former employee's email to perpetuate a false impression that the employee remained with the company, but simply mining the incoming traffic is certainly within the employer's rights. David David Shapp Partner & Senior Vice President The Edcomm Group Banker's Academy From: Cliff Brody

Sent: Tuesday, March 2, 2010 3:23 PM To: David Shapp; Linda Eagle; Kathy Luczak Subject: few loose ends What about LinkedIn -- not on our hardware. The question is who really owns that account? Ideally it would be us. We could leave it up as-is and she would have to create a new one.

CB Clifford G. Brody Founder & Chief Executive Officer The Edcomm Group Banker's Academy

From: David Shapp

Sent: Tuesday, March 2, 2012 3:53 PM To: Cliff Brody; Linda Eagle; Kathy Giola Subject: few loose ends We do. It was created with an email account that is ours, on our computers, on our time and at our direction. She cannot use that account because she does not own the email address that opened it. I think as long as we just read from it and do not write to it, we are not breaking any laws. Same thing with her email account -- as long as we only read and do not write, we are within our rights to do so.

David David Shapp Partner & Senior Vice President The Edcomm Group Banker's Academy

(Defs.' Ex. T.)

While these emails and other Edcomm actions evidence an intense interest in the issue involving ownership of LinkedIn accounts, it is clear that on June 20, 2011-the day on which Edcomm terminated Dr. Eagle-no policy had been adopted to inform the employees that their LinkedIn accounts were the property of the employer. Whether such a policy would be legally valid under the contract created between LinkedIn customer and an individual user is obviously not an issue before the Court in light of the finding made in this case that no such policy existed.

Sometime prior to her termination, Dr. Eagle gave her password to the LinkedIn account to certain Edcomm employees.*fn2 (N.T. 58:24--59:17.) The primary purpose of sharing her password seems to have been to enable those employees to respond to certain matters in Dr. Eagle's account, such as invitations, and also to permit updating of the account. (N.T. 57:21--58:14.) When Dr. Eagle was terminated, Edcomm employees accessed her LinkedIn account and changed its password, effectively locking her out of the account. The parties stipulated that from June 20, 2011 to July 6, 2011, Edcomm had full control of the account. (Stipulation 2.) On July 7, 2011, LinkedIn took over the account and, by July 14, 2011, Dr. Eagle had regained access to the account. (Stipulation 3.) It appears, however, that, due to some unknown events occurring while the account was in the hands of LinkedIn, Eagle lost messages from June 20, 2011 to October 7, 2011, although this is not totally clear. (N.T. 63:2--15; 69:7--13.) Dr. Eagle's Exhibit 9 contains a self-serving statement from her claiming she had not received messages since July. (Pl.'s Ex. 9.) This conflicts somewhat with the stipulation that, while LinkedIn did in fact take control of the account on July 7, 2011, and neither Edcomm or Eagle could use it, LinkedIn provided access to the account to Eagle by July 14, 2011. (N.T. at 14:7--11.) In any event, neither party disputes that, from at least October 7, 2011, Plaintiff has had full access to and control over her LinkedIn account. (N.T. 93:8--16.)

It is clear that Edcomm gave public notice that Eagle was no longer affiliated with the company within a week of her termination. (Defs.' Ex. H; N.T. at 54:2-11.) This information, however, did not appear on what had been Dr. Eagle's LinkedIn account. Although it is not entirely clear from the testimony or the Exhibits what someone accessing Dr. Eagle's LinkedIn page saw when Edcomm had control of the LinkedIn account from June 20, 2011 to July 6, 2011, both parties appeared to concede that the page reflected the name, picture, education, and experience of Sandi Morgan, the newly-appointed Interim CEO of Edcomm. (Pl.'s Ex. 51.) The evidence reflects, however, that some information related to Dr. Eagle had not been fully deleted from the site, such as her honors and awards. (N.T. 72:5--10.) It further appears that either a Google search for "Linda Eagle" or a search for "Linda Eagle" on LinkedIn during the time Edcomm had control of the account would direct the searcher to a LinkedIn account named "Linda Eagle" at the URL "http://www.linkedin.com/in/ lindaeagle." Clicking on that link would bring the user to Eagle's LinkedIn account, which now bore the name, picture, and credentials of Sandi Morgan. (Pl.'s Ex. 49, 50, & 51; N.T. 72:23--73:4.)

Ultimately, as referred to previously, Edcomm had exclusive control of the Linda Eagle LinkedIn account from June 20, 2011 to July 6, 2011. In the Conclusions of Law which follow, the significance of such conduct by Edcomm will be discussed.

By way of explaining her damages, Eagle offered testimony of Clifford Brody to explain her average number of sales over the past five years and how, even using the lowest number, she would have damages of $248,000 (see generally N.T. 114--121). Specifically, the following exchange constitutes the extent of Plaintiff's effort to quantify the damages causally related to Edcomm's tortious actions:

Q. So, Mr. Brody, before lunch we were talking about my sales, and now I want to go back to my sales numbers for a moment and ask you to tell the court what my average sales per year were for about the last five years.

A. Your average sales over the last five years-

Q. Annual sales, right.

A. -was over $3 million a year.

Q. Okay. And I'm going to ask you how you know this. Where you get this number from for the record, please?

A. That's my job to know. I analyzed our sales numbers on a weekly basis, and you were, of course, our, by far leading sales person, and so I do know.

Q. Do you have a recollection of what my strongest year; my highest year looked like?

A. Yes, I do. It was $6.6 million.

Q. Okay. So you have a recollection of what my lowest year, looking at the last five years was?

A. $1.6 million.

Q. And do you have-and I know that this is something that was tracked, but do you know in those sales, what percentage was to existing clients as opposed to non-existing clients?

A. Yes, I do.

Q. Or contacts, let me not even say clients.

A. Yes, I do. Your sales to existing contacts was over 70% of our total sales.

Q. Okay. And how do you know that?

A. Again, as you said, we track that very closely because that tells us exactly how we should be reaching out; whether we should be reaching out primarily to new clients-or to new contacts, to existing contacts.

Q. Thank you. And I ask that specifically-you're not just pulling a number, you're stating something that was tracked?

A. That's correct.

Q. So, then, if I were to say that I was averaging 70%, just using our number, of 3 million per year to existing contacts, that would be 2.1 million ...


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