LinkedIn: Protecting confidential information

by DLA Piper

Lisa Hodgson, an Associate in our Birmingham office, comments: Social media is becoming an increasingly common business tool as it is easy to use, free and effective.  Many of our clients, particularly in professional services industries, encourage the use of LinkedIn as a forum for marketing. If you meet someone at a networking event you are now just as likely to add them on LinkedIn as you are to swap business cards.

LinkedIn has seen exponential growth over recent years.  It now boasts of having over 259 million members in over 200 countries and gets two new members per second.  In the UK alone there are 13 million members.  Over the past few years we have started to see a slow trickle of employment tribunal decisions relating to the use of social media, but these have tended to concern the use of Facebook rather than LinkedIn.

A recent trend we are seeing is that when employees leave employment there can be a dispute about who owns their LinkedIn contacts, particularly where they are setting up in competition with their former employer and are likely to use the contacts in their new employment. Given the growth in popularity of LinkedIn, employers are quickly realising that a departing employee’s LinkedIn contacts are just as valuable to the employee as the company’s own database of contacts. There are very few cases regarding the ownership of LinkedIn contacts made during the course of employment and we expect this to be a growth area in coming years.

In Hays Specialist Recruitment Holdings Limited -v- Ions, Mr Ions worked for Hays as a recruitment consultant. Before he left to set up a competing business he sent LinkedIn invites to some of Hays’ clients and candidates. Hays applied to court for pre-action disclosure of certain documents, so that it could assess the extent of Mr Ions’ wrongdoing and the merit of bringing a claim against him. Ultimately, the court took the view that contact details obtained during the course of employment will remain the property of the employer, even after they were added to LinkedIn, and it therefore granted the disclosure sought.

The recent case of Whitmar Publications Limited v Gamage & Others concerned the use and ownership of LinkedIn accounts and groups.  Around four months before they resigned from their employment with Whitmar Publications Limited, three employees set up a competing business called Earth Island.  When Whitmar discovered this after the employees had left, it brought proceedings against the employees seeking an interim injunction to restrain the use of its confidential information.  One of the ex-employees, Ms Wright, had managed four LinkedIn groups on behalf of Whitmar.  In court she claimed that the groups were personal to her and “just a hobby”, although it was established that she had no home computer.  Three days after leaving employment with Whitmar Ms Wright used the LinkedIn groups as the source of email addresses for an Earth Island email inviting contacts to an informal event.  Ms Wright refused to provide Whitmar with the user name, password or any other access details for the groups.

In delivering its judgment, the court required the ex-employees to give Whitmar exclusive access, management and control of the LinkedIn groups.  It also ordered them not to access or do anything that would inhibit or prevent Whitmar from accessing the LinkedIn group.  This was despite the fact that LinkedIn’s own terms state that ownership of a LinkedIn account is personal to the account holder.  This is the first example we have seen of a court having to weigh up the conflict between LinkedIn’s own terms of use and an employer’s right to its confidential information.

There are many unanswered questions surrounding employees’ use of LinkedIn and we expect that it will be many years until the position is clear as cases are rare.  For a business to have rights over employees’ LinkedIn or other social media accounts, it will undoubtedly need to be in a position to demonstrate that there is a sufficiently close link between such accounts, its business and the employees’ duties. 

To manage risks employers may want to consider taking the following practical steps:

  • in any social networking policy include guidance on the appropriate use of LinkedIn accounts, emphasising that use of such accounts is part of an employees’ role and responsibilities, that the accounts belong to the company, and providing steps for the release of login details on termination; 
  • the company should involve itself in the creation of employees’ accounts (for example, by requiring the employee to use the company’s email address for log in purposes and branding on their profile) and require that the employee maintains the account using the employers’ systems;
  • the employer should specify, either in the employment contract or policy, that any contacts made through social media should be added to the company’s central systems;
  • include provisions in the employment contract assigning any proprietary interest in contacts, added to an employees’ LinkedIn account during the course of employment, to the employer;
  • tailoring restrictive covenants to specifically provide for restrictions in the use of social media;
  • expressly stating in a garden leave clause that the employee is not permitted to access or update their LinkedIn account during garden leave;
  • in contracts, provide for the disclosure or deletion of all LinkedIn contacts belonging to the employer on termination of employment or the closure of the account;
  • where exits are negotiated, include provisions in any settlement agreement requiring the employee to surrender his or her social media account as a condition of payment of any settlement compensation.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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