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A Word Of Warning For Employers On The Use Of Linkedin

There are currently 11 million LinkedIn users in the UK which equates to over a third of employees in this country. The professional networking site can be an extremely useful tool for both employee and employer allowing the employee to network easily with the employer’s customers. However, if the employee leaves their employment, the existence of a LinkedIn account can make it very difficult for the employer to enforce restrictive covenants, particularly non-solicitation clauses. Therefore throughout the period of employment the employer needs to remain mindful of this and take practical steps from the outset to address potential issues.

This note focuses on two issues with regards to LinkedIn: does the employer own the employee’s contacts? and what constitutes solicitation in the age of social media?

WHAT ACTUALLY BELONGS TO THE EMPLOYER?

According to LinkedIn’s user agreement the account belongs to the person in whose name it is held. Furthermore that individual agrees under their contractual relationship with LinkedIn not to permit others to use their account nor to sell, trade or transfer their LinkedIn account to another party. Therefore it is apparent that the employee has ownership of their own LinkedIn account.

However, this may not be of importance to an employer as rather than wanting to own the account itself, an employer is more likely to be interested in the contents of the account, in particular, the contacts list, which, being created in the course of employment, could be argued to belong to the employer. The High Court held in PennWell Publishing (UK) Ltd v Ornstein [2007] that a list of contacts created by an employee on PennWell’s email system belonged to his employer even though some of these were personal contacts made before he had joined PennWell. The High Court explained that if he had kept a separate personal contacts list for career purposes rather than employment purposes then he would have been entitled to use and develop the list. The employer was granted a permanent injunction preventing the employee using the list, apart from parts of it which were known to the employee by other means.

Although a reassuring outcome from the perspective of employers, this case was decided before LinkedIn had formed and so it is unclear as to whether the location of data will still be relevant in establishing who owns it.

In Hays Specialist Recruitment Holdings Ltd v Ions [2008] an employee had invited contacts from his employer’s database to his LinkedIn profile just before he left the company. The company argued that their confidential information had been appropriated via LinkedIn whereas the employee argued that once the invitation had been accepted ‘the information ceased to be confidential because it was accessible to a wider audience through his network’. It was held that the employee’s actions had caused the information to lose confidentiality and so the court ordered that the employee had to disclose all of his LinkedIn contacts requested by his employer and all emails sent to or received by his LinkedIn account from the employer’s computer network.

As a protective measure employers should ensure that during the course of employment professional contacts are added to their own database as well as to the employee’s LinkedIn profile so that there is no danger of losing the contacts if the employee leaves. Additionally the employer should consider setting up the employee’s LinkedIn account and maintaining it on the employer’s systems.

WHAT CONSTITUTES SOLICITATION?

Generally solicitation suggests positive intention to target clients for business. However, LinkedIn sends updates which may (depending on the account settings) be sent to all contacts automatically when the account owner changes employment. In SafetyNet Security Limited v Leonard Coppage and Freedom Security Solutions Limited the High Court held that a worldwide advertisement that one is available for employment or a notification that one has left a firm does not constitute solicitation. However this case did not involve online activities and the earlier unreported case of Taylor Stuart v Croft held that a former employee giving details of a new job to a client and stating that they could be contacted at that new employment did amount to solicitation.

LinkedIn profiles automatically provide this type of information and so arguably such updates could constitute solicitation. However the employee could argue that merely updating their profile does not show the necessary intention to solicit.

This is a developing area of case law and it is unclear as to where the line will be drawn.

WHAT TO DO NOW?

Employers should be reviewing their social media policies to ensure that there is an express duty for the employee to promote the employer’s business and for connections to be made in the interests of furthering the employer’s business. The employer should also make sure that employee’s LinkedIn contacts are added to the employer’s database and should consider setting up the LinkedIn account. Employment contracts should also be reviewed and, ideally, where practicable, updated to insert clauses regarding the proprietary interest of contacts added during the course of employment, amending restrictive covenants to provide for tighter non-dealing provisions in place of non-solicitation clauses and updating garden leave clauses. Employers might also wish to consider clauses requiring an employee to delete all connections belonging to the employer from their LinkedIn account at termination of the employment, although it is not certain at the moment that the employer could enforce such a clause.

If you require any help with updating your employment contracts or social media policies or require any further information please contact Charles Avens, Solicitor, or Richard Monkcom, head of Druces LLP’s Employment team.

This note does not constitute legal advice. It is general guidance only as to the law as at 10 September 2013

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