January 17, 2014

Don’t lose out on LinkedIn

An employee who actively uses LinkedIn will create a list of business contacts, which is likely to include a significant number of the employer’s clients or customers. The list may also include genuinely new contacts that the employee has established during their employment as well as existing contacts that the employee had prior to joining.

This activity creates a raft of potential headaches for the employer, particularly when an employee decides to move on and join a new organisation or set up in business on their own. Questions arise as to who owns the list of contacts.
•   What if the list contains a mixture of the employer and the employee’s own contacts?
•   Are the contacts still confidential once customer details are made public in this way?
•   And what if an employee uses LinkedIn after employment to contact clients or suppliers, does that breach post-termination restraints aimed at non-solicitation?

Unhelpfully, it’s an area of law where there is very little case law to assist. The terms of LinkedIn’s user agreement are clear that any account belongs to the individual. The registration process creates a contractual relationship between the individual user and LinkedIn, so it would be difficult for an employer to argue that the company ‘owns’ the account in the traditional sense of the word.

However, there are certainly times when the lines are blurred and the information on an employee’s LinkedIn profile is as much the company’s as it is the employee’s. If the account is being operated according to strict company guidelines, it might be possible to argue that account was being operated by the employee as the company’s agent. Some employers might not be concerned about whether they own the actual account, as long as they own the content, and they would argue they do as the contacts were built up in the course of the employee’s employment.

The case law

In the case of  Hays Specialist Recruitment Holdings Ltd v Ions, Mr Ions was alleged to have transferred the company’s contacts on to his LinkedIn account in the month before he resigned. Also in the month before he resigned, he set up his own company with a view to working in competition with Hays. Mr Ions argued that the transfer of contacts was carried out with Hays’ consent as he had been encouraged to have a LinkedIn account and that once the contact had accepted his LinkedIn invitation it ceased to be confidential information as the details could be seen by the rest of his contacts. This argument was not accepted by the Court which found that the action of uploading the contacts in the first place breached confidentiality.

In Pennwell Publishing (UK) Ltd v Ornstein, the Court found that a list of contacts created by a journalist employee and maintained through the employer’s computer system, belonged to the employer, even though the list included personal and business contacts which the employee had prior to joining the employer. The Court stated that if the employee had kept a separate list of contacts and carefully copied the contacts onto his own list that he considered long-term or journalistic contacts (rather than those which would also be useful to the competing business he was setting up), he would have been able to use them.

In SafetyNet Security Ltd v Leonard Coppage and Freedom Security Solutions Ltd, the Court said that generally an employee’s ‘advertisement to the world about availability for custom’ at a new company does not amount to solicitation that would breach a non-compete clause, however activity that was ‘targeted’ or ‘directed’ would probably cross the line. Arguably therefore a general status update on LinkedIn that an employee had changed companies and was available for work, would not amount to a breach of non-solicitation restrictive covenants.

Implications for employers

It’s clear that this is not an easy area and in order to maximise their chances of protecting any customer contact information, employers should consider:

•   Providing clear guidance on how LinkedIn accounts should be operated within company rules
•   Requiring employees to replicate LinkedIn contacts on to a separate company database
•   Requiring employees to use company email addresses when setting up accounts and include links to the company website
•   Adding a clause to the employees contract of employment which sets out that any contacts built up during the employee’s employment belong to the employer
•   Introducing contractual provisions requiring employees to delete any of the employer’s contacts from their LinkedIn account on termination of employment.

If you would like any further guidance on any of the issues raised here, please contact Mark Emery for a FREE initial conversation on 01865 268663 or email him at  [email protected].

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