Employee fired for claiming copyright in website can get unemployment benefits

Update: This decision was reversed by the North Carolina Supreme Court at Binney v. Banner Therapy Products, Inc., — S.E.2d —-, 2008 WL 2370887 (N.C., June 12, 2008).

Christina Binney was one of the founders of Banner Therapy Products, and worked as the company’s treasurer. She was also responsible for Banner’s computers, and designed its catalog and website. In April 2003, she was fired for taking her computer’s hard drive home over the weekend, and because she had named herself in copyright notices appearing in the company’s catalogs and on its website.

She sought unemployment benefits, and the North Carolina Employment Security Commission (“ESC”), denied her claim. The ESC determined that the denial of benefits was proper because Binney had been terminated for employment-related misconduct.

Binney appealed the ESC’s determination to a North Carolina trial court, but that court affirmed the denial of benefits. She tried again with the state’s appellate court, which reversed the denial of benefits. The appellate court held that given Binney’s position and responsibilities in the company, and the reasonableness of her conclusions as to ownership of copyright, her actions did not rise to the level of misconduct that warranted a denial of benefits.

In determining that it was okay for Binney to have taken her hard drive home for the weekend, the court emphasized the she was the one primarily responsible for the company’s computer equipment. There was no formal policy to prohibit her from removing the hard drive, and there was no evidence that her use of the drive over the weekend to prepare for a meeting on Monday morning was improper. Moreover, there was no evidence that the removal of the hard drive inconvenienced Banner in any way.

As for whether it was misconduct for Binney to have claimed ownership in the company’s catalog and website which she created, the court observed that there was no evidence that Binney acted in bad faith. She had created the original version of the catalog before the company was incorporated, and, relying on legal research she had conducted herself, she believed she owned rights in subsequent versions as derivative works. Without any evidence that Binney’s belief about her copyright ownership was not genuine, and without any evidence that Banner incurred any detriment, the court held that Banner failed to meet its burden of demonstrating misconduct sufficient to warrant a denial of benefits.

Binney v. Banner Therapy Products, — S.E.2d —, 2006 WL 2022223 (N.C.App., July 18, 2006).