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LinkedIn – Who owns the contacts?

LinkedIn has become extremely popular as a sales and marketing tool, particularly amongst professional businesses such as recruitment agents, solicitors and accountants. Many of these businesses actively encourage their employees to use LinkedIn however; it appears that little thought is given to the ownership of the contact lists on LinkedIn once an employee leaves their employer’s business.

LinkedIn poses a potential threat to businesses when an employee leaves the organisation and moves to another firm. A former employee can notify all their contacts and clients via LinkedIn of their new position and this will appear on the LinkedIn news feed as “xxx has changed jobs and is now working for xxx”. It would appear, in the circumstances, there is no better or more immediate way for your former employee to notify their key clients of their new employer (who could be one of your competitors) than through the automatic notification settings of LinkedIn.

So what is the position concerning ownership of LinkedIn contacts and can an employer stop an employee using LinkedIn from contacting clients of an employer’s business once they have left?

It’s all in the contract

As the heading above suggests, much will depend upon whether an employer has had the foresight to protect itself in a contract of employment. It is open to any employer to reach a contractual agreement with an employee that the details of contacts created on LinkedIn during the course of the employee’s employment shall be considered the property of the employer and that the employee shall not make use of such information following the termination of their employment. This could include a provision that the employee deletes all contacts made during the course of their employment from LinkedIn at any time during their employment or immediately upon the termination of their employment. This would then prevent the automatic notification of a change in employment once the employee updates their employment details on LinkedIn. It is likely that a Court would enforce properly drafted contractual provisions to this effect and indeed would grant an injunction in the event that that an employee failed to delete such contracts on LinkedIn either during their employment or immediately upon its termination.

Similarly, if there is no protection for an employer in a contract of employment, an employer may be able to obtain such contractual protection at the end of the working relationship if a compromise agreement is entered into.

Many employers are now including clauses in relation to the deletion of LinkedIn (or other social media network) contacts as a specific term of a compromise agreement, perhaps in the context of a wider settlement agreement.

But what is the position if an employer has not protected itself either in a contract of employment or a compromise agreement?

Employers beware of the laws surrounding social media contacts

Well, as the law stands at present, this is very much a grey area.  In particular:-

Whilst an employer ordinarily will have ownership of any database of client information created on its own computer systems by an employee during their employment, there is no similar database right in respect of entries made on LinkedIn. This is because the right to the LinkedIn database belongs neither to an employee nor their employer.

As yet, there has been no previously decided case that deals specifically with the issue of whether an employer can force an employee to delete contacts that have been entered on the LinkedIn system during an employee’s employment. The closest the Courts have come to considering this issue was in the High Court case involving Hays Specialist Recruitment (Holdings) Limited. However, this case did not involve a situation where contacts were created in the course of an employee’s employment. The issue was whether a former employee had copied contact information from Hays Database and uploaded it to LinkedIn. In that case the Court ordered the former employee to provide disclosure of any emails or other communications sent to or received by the employee’s LinkedIn account from Hays computer network while the employee was still employed by Hays.

Conclusion

If there is one message that any employer should take from the above, it is to take steps now to update their contracts of employment and restrictive covenants to deal with an employee’s LinkedIn connections.

However, a few words of caution. An employer should be in a position to distinguish those contacts that an employee already had prior to their employment with them. Furthermore, even if an employee deletes contacts made during the course of their employment from their LinkedIn account on the termination of their employment, it may be difficult to police and enforce how any employee uses their LinkedIn account following the termination of their employment. Perhaps an employer would have to rely upon the common law duty owed by an employee not to deliberately memorise customer and contact information for their own use once their employment terminates.

Alan Lewis is an employment law solicitor and head of employment at Linder Myers. He can provide expert employment law guidance in relation to drafting contractual provisions restraining the use of LinkedIn contracts by employees either during or following the termination of their employment.

 

Find Alan Lewis on LinkedIn

 

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One Response to “LinkedIn – Who owns the contacts?”

  1. Chris September 5, 2012 at 9:27 am #

    Great in depth post. , Some interesting info on LinkedIn and their ownership rights.

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