In an order granting a motion for preliminary injunction, Judge Naomi Reice Buchwald of the Southern District of New York ordered defendant, a former employee of plaintiffs,to return account passwords and login information for plaintiffs’ websites, email accounts, social media accounts, and third-party servers.
Defendant Ashleigh Nankivell was hired as Video and Social Media Producer by Plaintiffs, a group of related companies that market beauty products online. Ms. Nankivell’s duties included maintaining websites, blogs, and social media pages in connection with the online marketing of plaintiffs’ products. As part of her responsibilities, she maintained passwords and other login information for plaintiffs’ websites, email accounts, and social media accounts, as well as for third-party servers where plaintiffs stored content (collectively, “Access Information”). Nankivell was subsequently fired from her job by plaintiffs, but refused to give her former employers the Access Information. Plaintiffs then moved for a preliminary injunction against Nankivell requiring her to return their login information.
The court granted the preliminary injunction, ruling that plaintiffs showed both a likelihood of irreparable harm in the absence of the injunction, and a likelihood of success on the merits. Regarding irreparable harm, the court noted:
Plaintiffs depend heavily on their online presence to advertise their businesses, which requires the ability to continuously update their profiles and pages and react to online trends. The inability to do so unquestionably has a negative effect on plaintiffs’ reputation and ability to remain competitive, and the magnitude of that effect is difficult, if not impossible, to quantify in monetary terms. Such injury constitutes irreparable harm.
The court did not accept Nankivell’s argument that because the websites and blogs to which the information pertained had not been used for the two years preceding her termination, the plaintiffs would not be irreparably harmed if they did not receive the Access Information. According to the court, “past failure to utilize the websites does not preclude a finding of irreparable harm.” This is because “[n]ew opportunities may arise that plaintiffs are unable to take advantage of as a result of defendant’s withholding the Access Information.” The court pointed out that plaintiffs had recently been participating in “daily deal” promotions, the success of which depended heavily on tie-ins with social media.
Regarding likelihood of success on the merits, the court noted that it was uncontested that plaintiffs owned the rights to the Access Information. In light of that, Nankivell’s “unauthorized retention of theinformation may therefore form the basis of a claim of conversion.”
Ardis Health shows that courts are willing to rule that loss of login credentials can amount to irreparable injury, thus supporting a preliminary injunction ruling, even when the plaintiff had not previously been using the accounts associated with them. It’s worth noting also that in Ardis Health, the plaintiff had an employment contract with the defendant setting forth that the work created or developed by the defendant “shall be the sole and exclusive property of [the plaintiffs]” and that defendant’s work was “prepared as ‘work-for-hire.'” Such a contract can only help to bolster a claim for likelihood of success on the merits of a conversion claim.
Full decision available here.