Matt Gingell explains how the use of the popular social media website by employees can be a double-edged sword for the business.
Linkedin, like other social media websites, is often regarded as an extremely useful tool for brand recognition and developing business for the employer. Many employees are encouraged to use Linkedin to build a network of contacts, join relevant groups and post out relevant information – all of which may well have a positive effect on growing the employer’s business.
But what happens when an employee leaves the business? Can the employee effectively walk into the sunset with a long list of the employer’s contacts, which may have been added to the employee’s personal contacts and friends?
The starting point is usually that in the absence of an express agreement the Linkedin account would belong to the person who created it and they would have the contractual relationship with the social media site and hold the relevant password. The contacts would be the private property of the account holder. However, in certain cases the contacts could actually be deemed to be the property of the employer. In determining the issue the Courts would consider whether the contacts were created during the course of the employment and whether the relationships arose through the business or outside the business.
In the case of Whitmar Publications Limited v Gamage and Others the publishing company obtained an interim injunction in relation to Linkedin groups that one of three departing employees, setting up a rival business, had had responsibility for operating during her employment. The Court found that the Linkedin groups had been used as the source for distributing a press release after the employment had ended and granted an interim injunction providing the company with exclusive control and management of the particular Linkedin accounts. The Court indicated that key factors were the extent to which the group was created for the benefit of the employer and the extent to which the account was promoting the employer’s business. No final decision though was reached by the Court.
This area of law is rather ‘grey’ to say the least. Employers who encourage their employees to use Linkedin could though consider adopting measures to increase their protection including: setting up dedicated Linkedin accounts for employees during their employment to be used only for the employer’s purposes; the employer retaining the right of password access/control, allowing the employer to take control of the Linkedin account when the employee leaves; making it clear that the employee’s contacts/connections of the Linkedin account are confidential information belonging to the employer; copying Linkedin contacts over to the employer’s main database; and agreeing that the employee will be required to delete business contacts/connections made during the course of their employment from the Linkedin account on their departure.
These steps are by no means sure to work and are not without their problems. For example, an employer could instruct an employee to set up their LinkedIn account solely for work purposes and retain access to the password. The employee would be opening the account and would have to have the password to operate it. The employer's right of ownership would come down to arguments on agency. There would be practical problems too in handing over the account to the employer at the end of the employment including the issue, for instance, of what to do with any personal contacts that had been added.
There would also be the risk that the employee could change the password before departure. In terms of the option of simply requiring employees to delete business contacts on departure, this may be a better solution but there would invariably be disputes about whether a particular contact was a business one or a personal one. Supposing the employee had added a potential client who they had met at a breakfast seminar but who they had also happened to meet, socially, prior to then? What about a referrer who was also a friend of the employee?
It is also worth mentioning that messaging or posting to Linkedin contacts after the employee has left the business could breach any non-solicitation of client restrictions. Sometimes restrictive covenant clauses are drafted to include reference to a change of Linkedin status amounting to solicitation of clients.
This may or may not amount to ‘solicitation’ but in any event is this practical given that presumably the employer would not wish the employee to retain their status and hold out that they are still being employed by the business? For senior employees, where appropriate, it may be sensible to consider some Linkedin safeguards alongside some suitably drafted restrictive covenants.
Some employers may take the view that the advantages of promoting LinkedIn within the workforce outweigh the risks of losing business when employees leave for fresh pastures. Others may be more concerned about their employees’ 500 + connections. It cuts both ways.
Matt Gingell is a partner at law firm Gannons Solicitors which specialises in employment and commercial law