LinkedIn -v- LinkedOut

Article

24 March, 2015

How much do you know about your employees' LinkedIn contacts? Did you know that the contacts they have acquired whilst working in your employment may bypass your current restrictive covenants?

Traditionally restrictive covenants have been clauses set out in the Employment Contract designed to protect an employer's legitimate business interests when an employee leaves. These have typically consisted of:

  • Confidentiality Clauses - preventing use of the businesses' confidential information;
  • Non-Solicitation Clauses - preventing the ex-employee from seeking custom from the businesses' customers or prospective customers;
  • Non-Dealing Clauses - preventing the ex-employee from doing business with the businesses' customers or prospective customers, even if the customers have contacted the ex-employee themselves; and
  • Non-Competition Clauses - preventing the ex-employee in rare cases, and for a limited timeframe, from working in a competing business.

How do these clauses stand up to your employees' contacts on LinkedIn?

Your employee usually signs up personally to LinkedIn and is subject to its terms and conditions, which state that the information is owned by the author and that it is not confidential and not in violation of any contractual restrictions or third party rights.

So is it confidential information if the contacts are "open" for others to view?

Arguably it could still be confidential if the employee built up the contacts from other databases
such as Outlook, or in the course of his employment - where he is encouraged to do so by his employer.

It is well known that when moving to new employment, LinkedIn conveys the move to all the contacts of the ex-employee. It is therefore undoubtedly targeted at potential customers of the ex-employer if the ex-employees' new job is in the same industry. It could also be a request to do business if the contact discusses moving business in line with the ex-employees new job.

Why else keep in contact on LinkedIn?

Whether or not the ex-employee deals with the contact is a matter of factual evidence and in the case of Hays Specialist Recruitment (Holdings) Ltd -v- Ions [2008] the US operators of LinkedIn preserved all data stored under the profile of the ex-employee, even after the ex-employee had deleted it.

The Courts have always been reluctant to hold non-competition clauses to be enforceable unless
reasonable and exercising a legitimate interest by the business, but given the flaws of non-solicitation and non-dealing clauses in the face of social networking there may see a change in the Courts' attitude.

It is useful for employers to re-visit the restrictive covenants contained in their Employment Contracts and policies on social networking. The need to act quickly and intuitively in the event that an employee leaves their employment is important.

Manisha Modasia specialises in Employment Litigation and assists on issues relating to enforcement
of restrictive covenants against exemployees. For further information please contact Manisha Modasia on 01254 222324 or email Manisha Modasia

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