The growth and importance of social media is apparent, from Facebook, to Twitter to more professionally focused social networks such as LinkedIn. All these social platforms play a key role in modern society and in the business world.
With more than 225 million people using LinkedIn as a business tool, enabling individual employees to make connections with their clients and prospective clients, employers need to be aware of the potential pitfalls as well as the benefits and opportunities.
Many employers actively encourage their employees to use LinkedIn, yet most are blissfully unaware of the range of problems which can arise from its use in the workplace, especially when an employee leaves the business. Among other things, LinkedIn enables employees to build up a database of contacts, including clients, prospective clients, customers and suppliers. As a LinkedIn account is (on the face of it) personal to the employee, the contact details contained in the account are fully portable and therefore normally automatically follow the employee to their new employer, who may be a major competitor.
But who owns the data in the LinkedIn account? This is a much debated question and is becoming the subject of an increasing amount of litigation, particularly in cases of team moves to competitors.
Most employees see their LinkedIn profile as an individual account and the notion that their employer has any rights or ownership over it – or its contents - can be somewhat confusing. Indeed the terms of engagement with LinkedIn itself specify upon the creation of a new profile or account that each person's account is personal to them and the security details for that account (being the username and password) should not be disclosed to any other party. Employees often argue that in addition, once a contact is made on LinkedIn, that individual and their contact details contained on their own LinkedIn profile cease to be confidential information that is capable of being protected by the employer, as those details are viewable by any member of the public who is connected with that particular LinkedIn profile.
On the other hand, employers will want to protect themselves. At this stage, it is important to distinguish between the account itself, and the data contained within in. One important factor in determining who owns the account and/or the details of the contacts contained within it is whether the account (or contact) was "made during the course of employment". If it was, then an employer can argue that this contact list is the property of – and confidential to - the business; and therefore if the employee discloses this data or takes it with them to a competitor following termination of their employment, this would infringe the employer's database rights. An employee could also be in breach of their express or implied duties under their contract of employment. However, in practice there will frequently be a mixture within an individual's LinkedIn contacts of contacts made during the course of their employment, pre-existing connections and connections which arise whilst the individual is employed but from educational or personal relationships rather than through work or business connections. Contacts arising from these latter two situations are less likely to belong to the employer.
This leads to the conclusion that ownership of LinkedIn accounts and the data/contact details within them is not a straightforward issue.
Case law
The increased use of LinkedIn has created a number of grey
areas, in which the Courts have inevitably had to intervene. In one
of the first cases concerning LinkedIn - Hays Specialist
Recruitment (Holdings) Ltd and Another v Ions – back in
2008 the Court decided (perhaps unsurprisingly) that deliberately
migrating details of business contacts from the employer's
confidential database to their personal account at LinkedIn, is
likely to be a breach of confidentiality.
In the more recent case of Whitmar Publications Ltd v Gamage, the
High Court considered whether a former employer can exert some
control over an employee's LinkedIn account after the
termination of his/her employment in order to protect its
business.
Here, a group of employees set up a competing business before they resigned their employment with Whitmar. Whitmar issued proceedings, including an application for an interim injunction to restrain the use of its confidential information. One issue considered by the High Court concerned the access to four LinkedIn groups which one of the employees had set up and managed on behalf of Whitmar during her employment. She asserted that the groups were personal to her and were a "hobby". She refused to provide Whitmar with the user name and password for the groups. However, it was clear that these groups had been used as the source of email addresses to market the new business after the employees had left Whitmar's employment.
The High Court found that the ex-employees had been taking steps to compete against their former employer for more than a year before they resigned and that these steps crossed the line so as to constitute being actively in competition, rather than merely undertaking preparatory actions in advance of actively competing. The Court found that Whitmar had a right to the data contained in the particular LinkedIn groups in question because the employees had operated the groups for Whitmar's benefit to promote its business whilst they were employed by Whitmar, and had used Whitmar's equipment to do so (opposed to using a home computer). As a result, the former employee was ordered to provide details to enable Whitmar to access and manage the groups.
Practical steps to consider
In order to protect themselves employers should consider the following:
- Take steps to ensure that your employees' LinkedIn accounts are set up and maintained using your IT systems; and provide guidance on the use of the account.
- Include in your contracts of employment express obligations on your employees to promote your business on LinkedIn and other similar media and make it clear that LinkedIn – along with other similar online professional networking sites - are to be used in the course of employment for the benefit of the employer.
- Oblige employees to replicate LinkedIn business contacts on the employer's own database(s) and monitor the situation to ensure this actually happens.
- Insert a clause into your employment contracts assigning to the employer any proprietary interest in professional contacts added to an employee's LinkedIn account during the course of their employment.
- Include provisions in your employment contracts that require employees to provide their employer with user names and passwords of their LinkedIn and any other relevant accounts, and to delete business contacts from those accounts, on termination of their employment. Also consider including a provision obliging the employee to close down the account or allowing the company to close the account upon or following termination of employment.
- Include appropriately drafted post-termination restrictive covenants in employment contracts, such as non-compete, non-dealing and non-solicitation clauses to prevent confidential and other information and business contacts/customer details being taken by employees for use with competitors when they leave.
- Consider introducing and using a "garden leave" clause to help protect the business by ensuring employees cannot use or update their LinkedIn account during any period of garden leave imposed. Although this does not help address the question of who owns the account or its contents, it does help the employer by buying time for it to strengthen its relationship with its clients, prospective clients, customers and suppliers, thereby diluting the impact any departing employee will have if they do subsequently approach such contacts.
The law on this area is fast moving constantly developing. Employers should take a proactive stance now and follow the steps set out above to help protect their business and avoid potential future litigation; as well as regularly monitoring caselaw developments on this area and adapting the future approach they take as necessary.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
