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The LinkedIn effect: the employer's or the employee's account?

Your CEO is leaving the business; he's on garden leave and has been told not to perform any work-related activities.

May 2014

You find out he has been making connections with your clients and prospective clients on the LinkedIn account that he set up while working for your company for the purpose of developing its business.  Does this sound like a familiar or possible scenario for your business?  Is there anything you can do to stop him and protect your company?

Obtaining access to the employee's LinkedIn account

An English judgment from July 2013 demonstrates that English courts can make it possible for the company to take back control of the LinkedIn account.

gavel on paperThe case involved Whitmar Publications ("Whitmar") applying to the court for an injunction to prevent three former employees using its confidential information to seek to compete with Whitmar.  Whitmar was able to show strong evidence that the three employees had taken steps to compete against the company prior to the termination of their employment.  Such competing activity included one of the employees, Susan Wright, using LinkedIn groups for the benefit of the competing business.  The LinkedIn groups operated for Whitmar's benefit and promoted its business.  Ms Wright alleged that she operated those LinkedIn groups as a hobby and that they were personal to her so she refused to hand back access to those accounts to Whitmar.  Whitmar claimed that she managed those LinkedIn groups as part of her employment on its behalf and for its benefit.

The injunction granted to Whitmar required the employees to give "exclusive access, management and control" of the relevant LinkedIn groups back to Whitmar and not impede Whitmar from accessing those groups. This included giving up passwords, of LinkedIn groups to the employer which the employees had used to further their venture, and not to access or do anything preventing the employer accessing the LinkedIn groups. 

Although the judge did not analyse in any detail the various issues surrounding the ownership of LinkedIn accounts between employer and employee, this judgment seems to be a clear indication that a court would be willing to place control in the employer, notwithstanding that LinkedIn's terms and conditions state that the accounts belong to the individual in whose name the account is created.

This echoes earlier decisions, but employers should take note: the court here was particularly influenced by the wealth of evidence of the employees' wrongdoing, and it is not usually the case that all of an employee's contacts result from their current employment.  The courts will look at the way in which the employer and employees use social media accounts, the nature of the industry and industry-practice (here, the accounts were found to be used for marketing purposes, for instance).

In 4myschools v Palmer, the court held that a recruitment consultancy could protect customer connections despite the recruitment information being widely available on social media – the advantage was in the personal information about candidates and roles that the employee may have as a result of their employment.

The facts of other cases will not always be as helpful to the employer but, nevertheless, these are useful cases for employers to cite when taking steps to prevent an employee using the employee's LinkedIn account in breach of his or her duties.

Ownership of LinkedIn contacts

No one can "own" a list of contacts of LinkedIn but they can own any database right which subsists in the collection of those contacts into a database. 

This issue was not directly dealt with in the Whitmar case. However, if an employer can show that the employee set up the employee's work-related LinkedIn account in the performance of his or her duties and that the employee has expended time and energy growing the contact list of the account, then the employer may be able to claim that:

  • The LinkedIn account includes a database; and
  • There has been substantial investment in the obtaining, verifying and/or presenting of the contents of that database (i.e. the contact information contained in it) so database right subsists in it.

ownership definitionTherefore, the employer could claim that the employee would be infringing the employer's database rights if the employee were to take all or a substantial part of the contacts in the LinkedIn account.  This is useful as a pre-emptive measure to highlight to the employee the employer's rights or, if necessary, as a basis for commencing proceedings against the employee or his or her competing business for breach of those database rights.

Things to do to protect your business

For an employer to claim ownership of any database rights in its employees' LinkedIn or other relevant social media accounts, one of the things it needs to show is a close connection between such accounts and its business. Therefore, a couple of useful things to for employers to do could be:

  • to have a clear social media policy. The policy should cover both personal and business use of social media, and also access and use of any social media accounts during and after employment. The policy may encourage the use of LinkedIn and other social media accounts as part of the employees' duties.  It should set out the company's ownership of the accounts and any intellectual property rights contained in them and provide steps for the release of the login details on termination of employment.  The employee should be asked to acknowledge their agreement with any such policy; and
  • proactively to become involved in employees setting up work-related LinkedIn accounts or other social media accounts and have the employees use their company email addresses and company branding, if relevant, making clear that any such accounts are for business purposes only.

Further, employers could seek to protect their business pre-emptively in case of a dispute over ownership of such social media accounts by:

  • requiring that the employees also add the details of any contact they make, through whatever medium (including social media) to a central database on their own internal system;
  • requiring that relevant employees sign up to suitable post-termination non-competition, non-solicitation and non-dealing provisions to prevent the employees using the employer's contacts to compete against its business for an appropriate restriction period (please read our article on restrictive covenants); and including provisions for deleting contacts on termination of employment.

mixed appleThe law on this area is likely to be tested again in the near future and that may help better clarify matters.  In particular, in circumstances where there is mixed personal and professional use of a social media account or where an employee brought the account with him or her to a new employer things may prove more difficult for the employer.  In the meantime, taking such steps as set out above could help you protect your business.

If you have any questions on this article please contact us.

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Adam Rendle

Adam Rendle considers when employers may be able to claim an interest in employees' LinkedIn accounts.

"...have a clear social media policy. The policy should cover both personal and business use of social media, and also access and use of any social media accounts during and after employment."