Nasir and Matt talk about what to do when someone outside of your business takes control of your social media. They also answer the question, "Who can sign off on an agreement for a specific type of entity?"
NASIR: Welcome to Legally Sound Smart Business. This is… Matt Staub.
NASIR: And Nasir Pasha.
MATT: I would like to be introduced first one time, I guess. We’re only 89 episodes in, it’s still yet to happen, but…
NASIR: One day.
MATT: You never know. Actually, no, the one time you weren’t there, I introduced myself first.
NASIR: Oh, that’s right.
MATT: I forgot about that.
NASIR: Oh, because it was a best of episode. You like to talk about that time that you did it by yourself. That’s interesting.
MATT: It was only, like, a minute long at most.
NASIR: All right. Well, welcome to the business law podcast. This is where we cover business in the news and also answer some of your business legal questions that you, the listener, can send in to firstname.lastname@example.org.
MATT: Or you can send direct tweets or direct messages through Twitter @askbizlaw.
MATT: I wonder how we got that name. It seems like that would have been taken.
NASIR: I was going to put email@example.com or @smartbusiness but it was so long and I didn’t want to put the acronym because that didn’t really look right, and “Legally Sound” was too long too or something, I don’t remember.
MATT: Yeah, we left out.
NASIR: Yeah, it was a good one.
MATT: So, what do we have on the docket today? We’re talking about Facebook.
NASIR: On the docket, I like that.
MATT: Yeah, and we’re talking about Facebook likes specifically. I know our Legally Sound Facebook page has hundreds of thousands of likes because we’ve paid lots of money for that.
NASIR: About a dollar.
MATT: No, just joking.
NASIR: All international.
MATT: Let’s talk about in the story $500 for 10,000 likes, it seems like a good deal, I guess.
NASIR: I think that’s for US likes, though, right?
MATT: For $500, you get 10,000 likes in the US. There’s a cheaper rate for international.
NASIR: What does it matter where it comes from if you’re just paying for likes? It’s still just a number. No one can see – or maybe they can, I don’t know.
MATT: Anyways, well, I guess we’re not getting off-topic because that’s kind of the story here.
NASIR: Let’s not talk about Facebook likes anymore, that’s off-topic.
MATT: Who owns these Facebook likes? That’s really the question that it comes down to and this all came about because I guess there was a show that was on BET which I’m not really familiar with the show.
NASIR: Called “The Game.” I’ve never heard of it myself.
MATT: The Game, yeah. They started a show, it went off-air, but their Facebook page lived on and they ended up getting two million likes on this Facebook page for this show. So, BET was trying to say, “Hey, you need to give us these likes,” I guess. I’m not even sure how this works. Because they have the likes, do they have the information for all those people? Is that what it’s boiling down to?
NASIR: I’m trying to think about it. I don’t think you have very much information. But this case comes with a story, just like any court case. I think it’s semi-interesting that, even though this fan page came out when the show came out, the person who ran it was not an employee or even associated with the show. So, it wasn’t an actual official page. But, after the show went off-air, it continued to just get more likes and I think people missed it or whatever – who knows? And then, when it came back, instead of the game, the show BET creating their own new page, they were like, “Okay, well, this page is still out there, let’s just use hers. This is just some fan.” And so, they entered into some kind of contract agreement where she’d post for her and she’d be paid like, $3,000 or $4,000 per month, and there are some different terms in there. But then, she wanted more money. And so, long story short, one of the terms of the agreement was that she would give BET administrative rights to the actual fan page, and she revoked them. And so, now, BET is locked out of their own Facebook page for their show and now they’re in a dispute. And so, then they filed a complaint with Facebook – and this is a very easy process, by the way – if you have somebody else that’s using your copyrighted material – which, in this case, they were – Facebook will actually shut that page down. But, in this case, I’ve never heard of this, they requested Facebook not only to shut it down but transfer the likes to the new Facebook page which I didn’t even know that they could do that and Facebook would be willing to do so but apparently it did. Of course, that woman, that fan sues for a number of things including breach of contract and so forth but also for what’s called conversion. Conversion is like the civil equivalent to theft. Basically, she says, “They stole my likes.”
MATT: Right, sued for breach of contract and when she breached it first, but that’s fine.
MATT: I guess that’s how it works. There’s a previous case – and I think this one’s dealing with Twitter as well but – an employer-employee, this ended up settling out so we don’t know how it ultimately would have fallen down but a former employee of a company changed the Twitter handle from the name of the company – you know, it was the name of a company, I’ll just say it, Phonedog_Noah.
NASIR: Great company name.
MATT: Which PhoneDog was the name of the company, I guess, and Noah was his name. He changed it then to NoahKravitz which is just his full name when he quit which is obviously a problem because it’s the employer’s Twitter that was under that.
NASIR: It’s an interesting topic because, basically, the value is in those followers, right? Usually, if the account is created within the capacity as an employee and so forth, but a lot of times what happens is people will still retain their personal account but they use it to promote company stuff and then it becomes a little bit more ambiguous.
MATT: I mean, this situation, I imagine the employer told him to do this so I would assume it’s going to be in the employer’s property in this case. But then, it’s interesting the employer valued it at $2.50.
NASIR: Per follower, right?
MATT: Each follower per month.
NASIR: That seems like crap. I mean, we have tons of followers and half of them are probably bought and not even real people, frankly. I wish someone would pay me that much per follower, frankly. But, beyond that, what’s interesting is that you even said it, too. You mentioned the followers as property. According to this court – I don’t know if I’d agree with it but this court in Florida – because conversion is an allegation that you stole property, the court says Facebook likes aren’t property and, if they are property, they’re not the property of this fan page woman. To me, it’s a strange argument and it’s very difficult. This is, again, where there may not be a perfect legal remedy to this circumstance because it’s new technology. But, if you think about it, all a “like” is, to me, someone subscribing to a page saying that, “Okay, I want to see updates and also I’m liking it to show other people that I’m interested in this topic,” or whatever, right?
NASIR: But is that property? I don’t know, but it has value too, right?
NASIR: The fact that it’s been transferred is a big deal and, all of a sudden, that opportunity, that business opportunity to utilize those subscribers to do something else. But, at the same time, I don’t really have… that person is still infringing upon the copyrighted material from their fan page. Does that mean that she has to lose all of her likes? It doesn’t seem necessarily 100 percent fair.
MATT: Yeah, I’m trying to look up the show right now. I’m not familiar with it – not that it really matters.
NASIR: No, I think it definitely matters because, if I like it, then I’m going to be against this fan person.
MATT: My opinion changes.
NASIR: I remember The Game with Michael Douglas, right? That was a good movie.
MATT: I don’t think it’s the same thing.
NASIR: No, this looks very different. This is some kind of… I can’t even explain it.
MATT: I tried to go to the Facebook page. It’s not loading. I don’t know if that’s intentional.
NASIR: That’s interesting, actually. Oh, here’s the Wikipedia page. This’ll tell us what this is. It’ll give a synopsis. “The Game is an American comedy-drama television series created by Mara Brock Akil,” and I guess that’s all we need to know – a comedy-drama television series. I thought it seemed like a reality show to me.
MATT: On their Facebook page right now, it has 7.17 million likes – way more than the 2 million.
NASIR: Are you serious?
NASIR: Yeah, it originally had 2 million. That’s a big deal.
NASIR: That’s about 300,000 more than we have.
MATT: Yeah, I know. Crazy!
NASIR: Crazy world we live in.
MATT: All right. Well, we’ll jump into Question of the Day.
NASIR: Jump into it.
MATT: “Who can sign off on an agreement for a specific type of entity?”
I’m guessing they’re trying to choose what type of entity they want to be and they’re basing their decision on who can sign off on an agreement.
NASIR: Yeah, exactly.
You know, what’s interesting about this question is I don’t know how many times I’ve seen just random people in an organization signing contracts.
MATT: That’s a good point.
NASIR: What people don’t realize is that – I’m not talking about the company itself but let’s say that one of your companies has a contract with another company and some lower-level employee is the one that’s signing it – the problem with that from your end is enforceability because there are issues with whether or not you’ve actually entered into a contract whether the person was authorized to do so and so you kind of have to depend upon whether or not you had reason to believe that they had authority to. Then, when you’re dealing with corporations in general, it’s only the president and vice-president that’s typically authorized to sign and executive such agreements – not the secretary, not the treasurer necessarily. But, I mean, of course, they can actually give such authorization and it doesn’t necessarily have to be very formal in all cases as well.
MATT: Usually, you can figure it out. It’s pretty logical and common sense. You can figure it out. But, you know, you look at your governing documents, too. If the articles or the bylaws say these people have authority to sign off on things then that’s what it is.
NASIR: Yeah, and a lot of times too they’ll have some kind of general statement and then the board of directors or the managers will specify officers that are authorized. A lot of times, if you see a contract, any kind of major contract with significant economic impact will have either two things – either they’ll (1) have some kind of statement that says that those that are signing are representing the fact that they actually are authorized to sign, et cetera; or (2) especially like in a sales of an acquisition of a company or something really major like that, what they’ll do is they’ll require an actual company resolution saying that the company is authorizing the sale of the business, et cetera, or the property. Even the title companies and escrow will be very diligent to make sure that the proper signatures are there, find out who the officers are, who the shareholders are, who the members are, even in some cases where they want all of the shareholders or all of the members or all of board of the directors signing the document. That’s just simple due diligence but, as far as what the minimum is, it just depends on the transaction.
MATT: Yeah, exactly. All right. Well, I think we gave them a good answer for that one.
NASIR: I think so. All right. Well, thanks for joining us, and keep it sound and keep it smart.
MATT: Ah, just steal my line.
NASIR: I don’t have a line.
MATT: Keep it sound and keep it smart.