Linking in to get ahead
Any subscriber to LinkedIn will be all too familiar with the seemingly endless stream of LinkedIn emails which implore you to ‘‘congratulate’’ a friend or acquaintance on a new role or a work anniversary. When someone leaves an organisation or is employed by another this becomes public knowledge almost instantly. Updating a LinkedIn profile is one of the first things an employee tends to do once they’ve cleared their desk.
Because of the way such information is trumpeted by LinkedIn, often to a large audience, many employers are looking to restrict employees’ freedom to go about updating their job details on social media profiles. In many cases, an employee’s LinkedIn contacts will mirror or at least have strong parallels with the employer’s client base. The reasons why an employer may not want an ex-employee to contact their clients or have access to their contact details is obvious. What is more difficult is the question of who owns the LinkedIn profile and who controls the information.
The traditional legal position is that employees are free to do as they like after the termination of their employment, subject to implied duties of confidentiality and any contractual restriction the employee has agreed to. The most common form of contractual restriction is a restraint of trade clause, which may be enforceable if it is reasonable in scope and protects the employer’s legitimate interests.
A restraint of trade clause will typically restrain an employee from dealing with the former employer’s clients, soliciting those former clients, competing with the former employer, or using the former employer’s confidential information or intellectual property.
The courts have held that the personal connections that an employee has with clients or customers may be a legitimate business interest that can be protected by a restraint of trade. These types of clauses have in the past contemplated an employee contacting a former client or customer in a direct way – text, phone, email, casual conversations in the street. However, social media has changed the game.
Savvy employers are now seeking to implement more specific non-dealing clauses to restrict employees’ social media activity, for example, preventing an employee from sending out updates to their social media contacts or changing their employment status on social media for a certain number of months after the employment ends. From an employer’s perspective, the justification is that updating a social media profile, which almost inevitably results in a tidal wave of automatically-generated emails, is not far removed from the employee deliberately contacting the employer’s customers and clients in the employee’s circles, friends, followers or connections. The potential damage for the employer is at least the same, if not greater.
Is this a lawful restriction on an employee? The answer depends on whether the employer is protecting its legitimate interests. An employer’s justification will be strongest if the social media account has been used as a client relationship tool during the course of employment. This practice is prevalent in certain industries.
For example, recruiters are usually set up with premium LinkedIn accounts, paid for by their employer, and it will be made very clear to them in policies that the contacts created under that account in the course of employment remain the employer’s property after termination.The policy might even require deletion of the entire account upon termination.
The restriction is far less likely to be justified if the employer does not have a strong interest or investment in the social media profile in question. There would be little point in restricting an employee from updating their Facebook status for three months after termination of employment, because an employer’s interest in a personal Facebook profile and friends list would usually be minimal at best. This would likely be viewed as an unreasonable restriction on the employee’s freedom of communication and unenforceable.
These issues are yet to be considered by the courts in New Zealand but have been the subject of litigation in Australia, the US and the UK. In one case, an employee of recruitment company Hays was alleged to have transferred Hays’ confidential information, including client lists and job applicant information, to his personal LinkedIn account while still working for Hays.
The employee’s goal appeared to be to use this information as a springboard, so he could contact these people via his own LinkedIn profile after he left Hays. The Court ordered the employee to disclose the LinkedIn contacts which he had acquired during his employment with Hays and all emails sent to, or received by, his LinkedIn account from Hays’
Social media has changed the game.
computer network during his employment. The employee was also ordered to disclose any evidence of his use of the LinkedIn contacts and any business obtained from them.
The best approach for employers wanting to impose restrictions how employees manage their social media contacts obtained in the course of employment, is to have clear policies setting out expectations around the delineation between personal and professional social networking, who owns contact information that is genuinely acquired in the course of employment, and what the obligations are when the employment ends.
The opportunities for employees to give themselves a headstart in new ventures with a wealth of contact information available at their fingertips is significant and tempting, but also has the potential to be incredibly damaging to their ex-employer’s business.