The (LinkedIn) Battle of Britain

Connecting with clients on social media has a number of attractive benefits for a business. Statistics from Twitter suggest that 24% of job seekers form negative opinions of companies that do not have a social media presence. Luddites may be shaking their heads but the statistics speak for themselves:

• On Saturday 4th August 2015 a record breaking 143,199 tweets per second were recorded in Japan 
• In the time it took us to write the above introduction over 700,000 tweets were sent across the globe
• There are now 380 million LinkedIn users
• 1.96 billion people are currently using social media across the globe, this figure is expected to rise to 2.44 billion in 2018

 (Sources: www.statista.com; www.twitter.com)

It goes without saying that an employer should ensure that they are protected against any issues which may arise from the use of popular social media platforms, such as LinkedIn, Facebook, Twitter and other sites that you have never even heard of. Social media is as diverse, innovative and dexterous as its users. It is a seemingly symbiotic relationship – we change social media and social media changes us.

The opportunities for misuse and theft are plentiful and the law is still playing catch up, especially in the area of LinkedIn contacts and breach of an employee’s duty of confidentiality and his or her post-termination restrictions.

Who owns LinkedIn contacts? The employee who sets up a “personal” LinkedIn account? Or are the contact details of the LinkedIn connections the property of the employer? More importantly, are LinkedIn contacts capable of being protected by confidentiality and post-termination restrictions in an employment contract? We do not have a definitive answer to these questions as the case law to date turns very much on the individual facts, so much so that in the recent case of British Waterways Board v Smith the Employment Appeal Tribunal expressly refrained from laying down guidelines. Judging from the cases below the answer may be found by considering the following questions:

• Is LinkedIn a client list that retains “confidentiality” and thus protected by contractual and/or common law duty of confidentiality?
• Or is it a database protected by the Copyright and Database Regulations 1997? 

In any event, the decisions below are indications of where the courts and tribunals have drawn the line. 

In Hays Specialist Recruitment an ex-employee argued that client contracts built up on his personal LinkedIn page belonged to him as the website terms and conditions stated that ownership of the account is personal to the account holder. The High Court held that the former employee was in breach of the restrictive covenants in his contract by copying and retaining confidential information which related to the employer’s business and ordered the ex-employee to hand over the client contacts to the employer.  

Although not a LinkedIn contact list, in Pennwell Publishing (UK) v Ornstein (2007) the court held that a contact list stored on the employer’s IT system, such as Outlook, belonged to the employer both as a matter of common law and as a database under the Copyright and Database Regulations 1997. The latter provided that there was “a substantial investment in obtaining verifying or presenting the content of the database” and the database had to be “arranged in a systematic or methodical way and individually accessible by electronic and other means”. However, it is still unclear whether a LinkedIn contact list on a personal LinkedIn account will amount to a database owned by the employer.

In Whitmar Publications v Gamage a former employee was responsible for managing four LinkedIn groups. Three days after leaving employment, she used the groups to access lists of client contacts. The High Court ordered the ex-employee to provide her former employer with exclusive control over the groups, despite the fact that she claimed that the groups were for personal use and just a hobby. 

A point that is sometimes misconstrued is that social media makes your relationship with your clients more fragile and therefore more necessary and legitimate for you to seek to protect this relationship by covenant. In East England Schools v Palmer the ex-employee recruitment consultant argued that the restrictive covenants were unenforceable because

• she had not built up close relationships with her contacts; and
• in the wake of the social media age, there are no trade secrets, because the recruitment information is “out there”; and
• that candidates and clients are loyal to no one.

The court rejected the claimant’s arguments and held that as a result of building up the business relationships, the candidates and schools had at least some loyalty to her personally. She had also acquired valuable information about their personalities, likes and dislikes to such an extent that there was sufficient legitimate interest on the employer’s part to enforce the restrictive covenants.  

All of the above gives plenty of food for thought and we eagerly await the outcome of further litigation in this particular area. If well drafted, restrictive covenants and social media policies can provide an employer with not only an effective tool but hopefully also peace of mind when an employee is out the door. However, there are strict rules around restrictive covenants and courts will not always enforce them. Therefore you should seek legal and drafting advice on both the restrictive covenants in your employment contract and any social media policy, to ensure that you are fully protected.