Time to get LinkedIn?
Date: 02 July 2010
Authors: Juliet Carp
Issue: Vol 160, Issue 7424
Categories: Features, Employment
LinkedIn is an amazingly useful business tool for finding out more about people via the internet. It can help working people keep in touch, track down old contacts, find out more about people they would like to know, identify potential recruits, and offer a route to introductions. With over 65 million members, and growing, it is changing the way we manage business contacts (see www.linkedin.com).
How LinkedIn works
The concept is straightforward: enter the website, type in a name, and, if that person is a “member”, the “profile” they have posted will pop up. Members can choose to “connect” to other “members” and, in doing so, can share lists of “connections” with each other. When a member moves jobs he can update his profile, and all his connections can automatically be informed of his new role. Finding business people has never been easier.
Potential damage to business
Of course, an employer may not want his employee to “own” business contacts made during his employment and, in particular, may not want the employee to take them with him when he leaves. Suppose a salesman entertains potential customers at his employer’s expense. The salesman diligently enters each customer on LinkedIn. Later he wants to work for a competitor. With a few clicks of the keyboard he can give the competitor access to “his” full list of LinkedIn connections.
Legal claims
Claims could arise from misuse of the employer’s property rights or from a breach of the employment contract, for example breach of the employee’s implied duties of fidelity or confidentiality or of express requirements to comply with the employer’s policies or particular post termination restrictive covenants. The latter might include an agreement not to solicit or deal with the former employer’s customers for a period of time after the employment ends.
Potential remedies
If the employee is still employed he may be disciplined or dismissed. If he has already left, the employer is more likely to consider one or more of the following remedies:
l an interim order (injunction) to prevent the employee or third party from using the confidential information and/or requiring them to return or destroy it;
l damages for breach of contract against the employee, or for inducing breach of contract against a new employer or other third party; and/or
l an “account of profits” made using the confidential information.
An interim order (injunction) can be particularly useful as this can stop the activity before damage to the business becomes irreparable. However, this is a discretionary remedy and will only be granted on the “balance of convenience” to protect a “legitimate business interest”, such as confidential information, client connections and the stability of the workforce. Even where there is a “legitimate interest” the order will only be granted if this is reasonable, taking account of the circumstances of both parties. An interim order is unlikely to be granted in respect of information that was never confidential or is already in the public domain.
Confidential information
The key issue is whether connections can properly be regarded as the employer’s confidential information once they are on LinkedIn. Are the connections both the employer’s property and confidential?
Section 13(1) of the Copyright and Rights in Databases Regulations 1997 (the Database Regulations) (SI 2003/ 2501) confirms that for a proprietary right to exist in a database, there must be a substantial investment in obtaining, verifying or presenting the contents. Section 14(1) confirms that where a database is made by an employee in the course of his employment, his employer is regarded as the maker of the database, subject to any agreement to the contrary. By joining LinkedIn the employee makes a contract with LinkedIn as an individual. The software does not belong to the employer. It could be argued that by knowingly allowing the employee to enter data on LinkedIn, the employer is making an “agreement to the contrary” and that the employee then owns the database.
In most cases LinkedIn connections will include both personal contacts, such as college friends, and business contacts, perhaps gathered during more than one employment. Business contacts might include useful suppliers or intermediaries as well as clients or customers. In Pennwell Publishing v Ornstien & Ors [2007] IRLR 700 a journalist imported contacts from a previous employment into the employer’s “outlook” database and included long-term “journalistic contacts” that he later tried to argue were his own. The journalist did not get far: the High Court considered the Database Regulations, and confirmed that the database was developed in the course of the journalist’s employment and that it belonged to his former employer.
It is not clear whether information stored on LinkedIn is genuinely confidential. Most LinkedIn profiles are accessible to anyone with an internet connection and rarely contain information which may be regarded as confidential. It is difficult to see how the content of an individual’s profile alone is confidential. It is the way the information is gathered together that is more likely to create a proprietary interest. For example, suppose our salesman spends his employer’s time and money connecting with the 500 very best widget customers. The customers’ LinkedIn profiles may not be confidential but the list of connections could be. To make things more difficult for the employer, the connections list will usually have been disclosed to a large number of other connections, most likely with the employer’s express or implied consent.
Controlling employees’ LinkedIn connections
Should companies adopt policies that expressly prohibit employees from using LinkedIn in particular ways or at all?
Many employment policies dealing with social networking focus on managing employees’ time, eg by banning or blocking access to sites during working time. However, a blanket ban appropriate for a receptionist may make it harder for a marketing manager to do his job. Time wasting could be managed in more traditional ways. Appropriate limits on usage will vary substantially between businesses. Some businesses will see a detailed and prescriptive policy as a necessity while others will accept some loss of control over confidential information as a fair exchange for the business benefits on offer.
Consistency
Allowing the balance to be drawn on a case-by-case basis by different managers may not be effective, as consistency may be critical to defence against an unfair dismissal complaint or if the business is to convince a court that an interim order should be granted.
Finding the balance
There are many (sometimes competing) issues to consider and different businesses are likely to have very different views on what the “best” policy should look like. Some will focus on maximising the benefits of the new technology, whilst others will be more concerned about maintaining current levels of control. Some employers will rely heavily on education, common sense and the employee’s duty of fidelity. Others will wish to prescribe how LinkedIn should be used in detail. The issues are complex, and policy objectives are likely to develop along with technology and business practices. Keeping ahead will be difficult, particularly if a policy is prescriptive. But one thing is certain: putting off thinking about these issues will leave the employer with fewer options. It will be far easier to control employees’ use and to protect confidential information if guidelines are set out before employees start to connect to customers. In many cases the horse will already have bolted.
Juliet Carp, solicitor, Speechly Bircham LLP. E-mail: juliet.carp@speechlys.com
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