Stemming The Tide
There are now over 200 million LinkedIn users; 74 million are located in the US, 18 million in India, and 11 million in the UK. While businesses see the benefits of encouraging their employees to be active on professional networking sites, this may create legal and practical difficulties.
LinkedIn promotes the individual as much as, if not more then, the employer’s business. This may create confusion in the employee’s mind about whose interests are being served. It may also create new risks to the business, particularly when the employee leaves, in terms of protecting the business’s trade connections and raising the question of whether post-termination restraints are still worth the paper that they are written on (see box “Risks for employers”).
This briefing looks at the issues that employers may face when its employees use professional networking sites such as LinkedIn.
Who owns the account?
LinkedIn’s user agreement creates a contractual relationship between LinkedIn and the user, which is typically the employee.
Under “membership” the terms state:
“the profile you create on LinkedIn will become part of LinkedIn and except for the information that you license to us is owned by LinkedIn. However, between you and others, your account belongs to you. You agree to:
- Keep your password secure and confidential;
- Not permit others to use your account;
- Not use others accounts;
- Not sell, trade, or transfer your LinkedIn account to another party;
- Not charge anyone for access to any portion of LinkedIn, or any information therein.
Further, you are responsible for anything that happens through your account until you close down your account or prove that your account security was compromised due to no fault of your own.”
The question of whether an employee can comply with his employer’s conditions without breaching the contract with LinkedIn is a complex one, and has not yet been addressed by the courts. Whatever the employer may say in its LinkedIn policy, it may not be able to establish that it owns the account.
By dictating the terms on which the employer allows the employee to use LinkedIn, the employer may create an agency relationship because arguably the account is, in such circumstances, operated for and on behalf, of the employer. Problematically, however, may employees travel from one job to the next, taking their LinkedIn accounts with them.
The employer may not mind whether it owns the account, as long as it owns the contents, and it would argue that it does because the contents were created in the course of employment.
If the employer has taken steps to ensure that LinkedIn is not the only repository of the information which is valuable to the business, this will mitigate some of the risk. For example, the employer should mandate that professional contacts are added to its own database as well as to the employee’s LinkedIn profile.
In Pennwell Publishing (UK) Ltd v Ornstein, a list of contracts created and kept by a journalist on PennWell’s email system contained personal contacts that he had made before he joined PennWell. The High Court held that everything belonged to his employer, concluding that if he had kept his personal contacts, then he would have been entitled to use them.
This case provides some comfort to employers but it precedes the advert of LinkedIn, cloud technology, and the mobile devices era, so it is debatable whether the location of data remains determinative of its ownership.
An employer can protect its confidential information in a number of ways; for example, by claiming breach of duty under employment contracts or by including post-termination restrictive covenants in employment contracts.
However, it is questionable whether employees’ connections on LinkedIn amount to confidential information. The proliferation of contact details available via the internet means that it may become increasingly difficult to establish confidentiality in contacts posted on LinkedIn, and the ease of locating this data may mean that, in the future in any event, employers care less about protecting these contact details.
In the meantime, a helpful case for employers is Hays Specialist Recruitment Holdings Ltd v Ions, which concerned pre-action disclosure. Mr Ions transferred contacts from his employer’s database to his LinkedIn profile immediately before leaving the company. His allegation that the contacts had lost the requisite quality of confidence by being posted online did not curry favour with the High Court. The fact that Mr Ions deliberately copied over the new contacts may have influenced the court’s view.
An employer may argue that the list of connections amounts to a database under the Copyright and Rights in Databases Regulation 1997 so that, if the employee tries to exploit that list post-termination, the database right is infringed (this occurs when a person without authorisation extracts or re-utilises the whole or a substantial part of the contents of the database).
The author would query, however, whether there has been sufficient investment in obtaining, verifying, or presenting the contents of the database on the employee’s profile in order for the database right to apply.
During employment, an employer can rely on implied duties of good faith, and possibly fidelity, depending on the nature of the employee’s role, to protect its business interests. These duties will not survive termination, which is typically when the unique set of issues posed by LinkedIn could come to a head. So employers will need to impose express obligations to protect them post-termination.
Termination letters traditionally require employees not to hold themselves out as connected with their former employer post-termination. An employee will duly update his LinkedIn profile, advertising his change of scene to the world, it is debatable whether this erodes the protection afforded by non-solicitation clauses.
In Safteynet Security Limited v Leonard Coppage and Freedom Security Solutions Limited, the High Court said that a general advertisement to the world about availability for custom at a new firm or a specific notification of departure from one firm to another does not cross the line.
SafetyNet Security did not concern online behaviour, and the line is a fine one. as the earlier case of Taylor Stuart v Croft (unreported) demonstrates. In Taylor Stuart, the High Court held that it was not acceptable to give details of a new place of work and then state “I can be contacted at…”. LinkedIn profiles usually indicate that the user would like to be contacted for new ventures and business deals. This may arguably be enough to cross the line, although the employee would need to have the requisite intention to solicit and may seek to argue that the effects of updating the profile were inadvertent.
These issues are yet to be tested; if the employer has enforceable non-dealing provisions in the relevant employment contract then such questions may be avoided.
To manage the risks to the business when employees use LinkedIn accounts employers should:
- Provide guidance on the use of the account, typically in the form of a policy that sets out clear expectations on appropriate content and appropriate groups for the employee to join.
- Require employees to replicate contacts on the employer’s own databases.
- Take steps to set up the employee’s LinkedIn account (for example, by using the company’s email address, photo and text, and generating a password that is surrendered on termination) and maintain the account using the employer’s systems.
- Ensure that any professional networking policy contains an express duty to promote the employer’s business and stipulates that the employee is to develop connections in furtherance of the employer’s interests.
- Add a clause into the employment contract assigning to the employer any proprietary interest in professional contacts added to an employee’s LinkedIn account during the course of employment.
- Tailor restrictive covenants to deal specifically with LinkedIn issues, and consider whether non-dealing provisions might be more effective than non-solicitation clauses for certain roles.
- Consider relying on garden leave provisions and impose a ban on updating a LinkedIn account during garden leave.
- Consider imposing contractual provisions that require disclosure or deletion of all connections belonging to the employer on termination of the employment, or even requiring the employee’s LinkedIn account to be closed down altogether.
These solutions may have no teeth; an employee could shut down his account one day and then start a new one the next. Also, even if the employee breaches these provisions, depending on the breach, the employer may not find it worthwhile to try to enforce them.
In any case, having determined what really matters to the business, employers should find contractual provisions and guidance helpful in setting expectations. Employers should also consider whether more practical solutions will offer protection; for example, by deferring compensation in appropriate cases until compliance has been demonstrated.
Writer: Ms Nighat Sahi, Solicitor Kyriakides & Braier Solicitors
Tel: 020 7637 3289 | Fax: 020 7636 3013 | Mobile: 07968 440612