What’s the issue?
When an employee exits a business, there is always a question about what influence, if any, an employer can exercise over the connections that that employee has made (as a representative of the employer) during their time with them. One of the most common battlegrounds here is those connections the employee has made on LinkedIn, which now has over 830 users worldwide.
Starting with the agreement between LinkedIn and each individual user, a user cannot transfer ownership of their profile to any other person, disclose their login details or allow another person to use their account.
Such a position would appear to conflict with the obligations an employee may have under their employment contract.
The High Court recently looked into this very issue.
What was the case about?
In this case, W, a recruitment agent, worked for an employer recruitment agency. He had a LinkedIn account which he used in the course of his business activities. In his account he had approximately 3,500 business connections, most of which were made during the course of his employment, and he used his employer’s company email address. Only W had access to his password.
W’s employment contract contained express provisions governing confidentiality and post-termination non-dealing restrictions, as is often the case for senior employees and those operating in the sales/services sector. More unusually, W’s contract expressly provided that W would make available all passwords for any online networking site to the employer on request and that, on termination of his employment, W would permanently delete all electronic records of professional contacts, including clients and candidates, made during the course of his employment from his networking accounts. His contract also stated that W would provide a signed statement that he had fully complied with these contractual obligations.
A separate contractual agreement with his employer provided that any LinkedIn connections made while working for the employer belonged to the employer and that the employer would have the right to remove any connections made during the course of employment by any means necessary when W’s employment ended. W resigned and subsequently set up his new recruitment agency business, circulating the news on LinkedIn. The employer, concerned that W was misusing confidential information and client contacts, sent W a letter before action, inviting him to provide a number of undertakings and to deliver up his LinkedIn password. W did not regard his LinkedIn connections as confidential, or at least they were not items to which he considered the company had a confidentiality claim, and, in respect of the LinkedIn password, he refused to provide this on the basis that his user agreement with LinkedIn prevented it. W claimed that the LinkedIn account was his own, in that he set it up and operated it, and the connections were his.
The employer then issued court proceedings for breach of contract and breach of confidence and applied for various injunctions to restrain W’s alleged misuse of confidential client connections and candidate information and to restrain him from soliciting, canvassing or dealing with the employer’s clients.
Prior to the trial, the parties reached a settlement on all matters, except costs, the central issue of which was to be determined by reference to which party had “won” the substantive issue as to the ownership of the LinkedIn connections.
Since the parties had reached a settlement before the case reached a trial, there was not a full determination as to the interrelation of the contractual terms within W’s employment contract and the separate LinkedIn agreement with those of the user agreement between LinkedIn and W.
What did the Court decide?
However, the court regarded W’s contractual terms with his employer to fully co-exist alongside the terms of W’s user agreement with LinkedIn and stated that the terms of the LinkedIn user agreement did NOT override his contractual obligations to his employer.
What does this mean for employers?
This decision does therefore highlight the importance for employers having in place comprehensive, up-to-date social media and confidentiality policies which clearly identify ownership of business contact information and networking connections on apps such as LinkedIn made during the course of employment and, as here, employees’ obligations on termination of their employment with regard to such information and connections.