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Never has it been so easy to market yourself as a professional and own a vast contact database in your own name thanks to business networking sites such as LinkedIn. LinkedIn specifically aims to "connect the world's professionals to make them more productive and successful". But to what extent is productivity and success a self-motivated goal or one pursued for the benefit of the company for which you are currently working? In particular, can companies lay claim to employees' hard-earned contact books during and after their employment?
According to LinkedIn's User Agreement, ownership of an account remains with the individual. The contract states that you must "keep your password secure and confidential" and "not permit others to use your account". However, these terms seem to have been disregarded in the limited case law there has been to-date, particularly where confidential information is at stake.
As social media plays an ever-increasing role in a company's marketing strategy, it is important to determine who owns what information. In recent case law, the courts seem to have sided with the employer owning the contact books.
Therefore, what legal and commercial arguments are open to an employer who wishes to lay claim to an employee's LinkedIn contacts post-termination of employment?
In the first LinkedIn case on the subject, Hays Specialist Recruitment (Holdings) Ltd and Another v Ions and Another , Mr Ions transferred contacts from Hays' database to his LinkedIn profile immediately before leaving his job. Hays sought pre-action disclosure of certain relevant documents in order to be able to assess the merits of issuing a claim in relation to Mr Ions' alleged misuse of confidential company information. Mr Ions' argument that the contacts had lost the necessary quality of confidence by being posted online was not accepted by the High Court.
Whilst this appears a helpful case for an employer to rely on to assert its rights against an employee's misuse of confidential information, there are two drawbacks. First, the case did not go to a full merits hearing and there was therefore no definitive ruling on this point. Secondly, the full client list was not in the public domain at first, as opposed to being on LinkedIn pre-termination of employment. Had it been in the public domain initially, the confidentiality argument would perhaps have suffered.
That said, the recent case of Whitmar v Gamage & Others  appears to state that contacts on LinkedIn accounts set up by an employee can be confidential information.
Whitmar Publications Ltd, in an application for interim relief, wished to restrain three ex-employees from using and disclosing the company's confidential information gained during their employment. More specifically, one of the employees had refused to provide Whitmar with the user name, password and other access details to LinkedIn groups once she had left, despite the fact that the accounts were operated for Whitmar's benefit and promoted its business.
Mr Leaver QC concluded that "there was a strong case that the Circulation Database and the Customer Database were Whitmar's confidential information" and took the view that "Whitmar had a very good chance of succeeding at trial". Whilst it was not altogether clear, the LinkedIn contacts appear to be some part of the applicable Circulation and Customer Databases in question.
Cases such as these are undoubtedly intertwined with post-employment competition issues and obligations of fidelity to the original company. The evidence that the ex-employees set up a competing company (Earth Island) and a domain name for it over four months before they resigned cannot have helped their cause. They then apparently used Whitmar's LinkedIn groups to obtain email addresses for Earth Island's major press release, just three days after they left Whitmar. Furthermore, one of the ex-employees, Gamage, was accused of copying his old business cards for future use before leaving.
All this evidence mounted up to a "serious issue" worthy of a full trial. However, the case appears to have been settled since and Mr Leaver QC's reasoning will not be given a proper examination. In particular, the supposed confidentiality of LinkedIn contacts is questionable. By their very nature, LinkedIn contacts are designed to be visible to interested third-party connections so as to expand one's network. Contrasted with Hays above, where the database was not in the public domain, here the LinkedIn contacts were undoubtedly accessible to other connections and not confidential. If anything, the confidential information would be the username and password to the accounts and not the contacts themselves.
Perhaps Mr Leaver QC was swayed by the secrecy with which the defendants had gone about their business in coming to his verdict. Or alternatively, the crucial issue in this may have been that the LinkedIn accounts were purely set up to promote Whitmar's business and were far from personal accounts. If it were a more borderline case of account ownership, perhaps the decision would have gone the other way.
In addition to the confidentiality argument, an employer may wish to claim a 'database' right over their contact list and be protected under the Copyright and Rights in Databases Regulations 1997. An employee would infringe a database right if they extracted or re-utilised all or a substantial part of the contents of a protected database without the consent of the owner. Whether contact lists on social media sites are protected databases remains to be seen as there must be sufficient investment in obtaining, verifying or presenting the contents of that database on the employee's profile for the right to apply. However, it is worth noting that in PennWell Publishing (UK) Ltd v Ornstein and others , the High Court considered an Outlook contacts list to be worthy of protection, which may suggest future courts follow this approach regarding LinkedIn contacts.
Another possible option open to an employer is to insert contractual provisions into an employment contract restricting employees from soliciting or 'dealing' with their former clients via LinkedIn just before they leave or after they have left. Arguably, such solicitation or dealing may happen merely by updating one's profile to refer to a new job and knowing that this notification will be visible to all contacts.
If there was a constraint on posting such an update, it may not be enforceable if considered unduly restrictive. The law in this area is relatively new and so it is not altogether certain what a court would decide. Therefore, such provisions should be separate from other wording in a contract, so a court may strike out those clauses alone and not render the whole contract unenforceable.
It is this uncertainty which leads us to anticipate the next case on the subject, which cannot be far away given the huge surge in employers using social media. In the meantime, it is important to consider a few practical steps that employers can put into place.
For more information please contact Robert Bond, Partner
T: +44 (0)20 7427 6660