Picture this: before they leave for a competing business, a valued employee downloads and prints off a list of all of your key customer and business contact details and takes it with them.
Now picture this: before they leave for a competing business, a valued employee connects with all of your customers and contacts on LinkedIn.
Which is worse?
I suspect that most employers would take issue with the first situation and would regard it as a blatant attempt by an employee to steal confidential information: after all it is a more conventional “theft” of information and it is something that employers have feared employees doing for many years. However, if you take a step back, in reality the two situations are the same: in both cases a departing employee has taken their employer’s valuable contact list with them, no doubt for the purposes of competition.
The second situation is becoming more common and is a real risk for business and increasingly employers are asking the following:
- Who owns a LinkedIn account?
- Who owns the contacts on a LinkedIn account?
- How can we control what our employees do on LinkedIn and what they do with the account when they leave?
In answer to these questions a departing employee could try and rely on LinkedIn’s user agreement (which, amongst other things, states that users are responsible for what happens on their account, must keep their password secure and confidential, must not permit others to use their account and must not transfer their account to another party) to assert that their LinkedIn account is personal to them, that it and their contacts belong to them and that it therefore falls out of the remit of their employer’s control. Whilst LinkedIn’s user terms could therefore make it difficult to establish that an employer owns an employee’s LinkedIn account and/or can control what happens on it, as the recent cases discussed below demonstrate, that is not to say that it will be impossible for employers to gain some power over an employee’s use of LinkedIn.
The first case of interest is Hays Specialist Recruitment v Ions [2008]. In this case Mr Ions did exactly what I have used as an example above – before leaving for a competing business, he connected with several of Hays’ candidates and clients on LinkedIn. Mr Ions sought to argue that because the contacts had accepted his invitation and their details were therefore online and accessible by his other contacts, they lost their confidential status and so Hays had no rights over them. The High Court disagreed (taking particular issue with Mr Ion’s deliberate actions) and dealing with the issue as part of a preliminary point, it decided that contacts obtained during the course of employment remain the property of the employer. This was only decided as part of the consideration of a preliminary issue and cannot therefore be relied on as a definitive authority that this will always be the approach taken where contacts are stored on an individual’s social media account. However, it does serve as a cautionary tale for potential rogue employees and it will take a brave employee to rest assured that their (former) employer has no rights over the contacts on their accounts.
Another more recent case and one which may help employers grappling with the third question above is Whitmar v Gamage & Others [2013]. This case concerned three former employees of Whitmar who left for a competing business. Whilst employed, one of the employees concerned was responsible for managing a LinkedIn group on behalf of Whitmar. Following their departure, the employees were accused of using the company LinkedIn group as a source of email addresses for press releases for new business and the employee in control of the group refused to hand control over to Whitmar. The court in this case granted a springboard injunction to Whitmar preventing the ex-employees from working for the competing business for a period of time and it also ordered them to give Whitmar exclusive control of the LinkedIn group. It therefore seems that regardless of LinkedIn’s user terms, where a former employee is concerned, the courts are not adverse to dictating what a LinkedIn account holder must do with the accounts that they control.
It is inevitable that in forthcoming years more case law will develop which, it is hoped, will provide more comfort for employers but in the meantime, there are steps that can be taken by employers to protect valuable contact information where this is a major issue for their business. These include:
- having a detailed and robust social media policy
- requiring employees to replicate contacts from their social media account onto your own database
- taking steps to set up the employee’s business use social media account (thereby potentially acting as an agent), and maintaining the account on their behalf
- including additional provisions in restrictive covenants controlling the use of social media and the retention of contacts made during the course of employment
- where settlement agreements are used, including provisions that expressly require the deletion of business contacts
- relying on garden leave provisions and expressly prohibiting the use of social media to connect with or contact business contacts during the garden leave period
- inserting contractual clauses dealing with the ownership of contacts on social media accounts and requiring the deletion of contacts upon termination of employment
Even if it is considered unlikely at this stage that it will be worthwhile to purse a former employee for any breaches, as social media continues to revolutionize the way people do business, the risk to businesses is only likely to heighten. Taking some or all of these steps will therefore help to place a business in a stronger position, just in case.
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