(This article was the subject of a seminar on 12 May 2010)
Companies in the recruitment sector are probably amongst the most sophisticated in their procedures for enforcing restrictive covenants and are not averse to resorting to the courts to injunct departing employees. Over the last eighteen months many disputes have been particularly hard fought around the issue of who is entitled to control an employee’s LinkedIn account. To date this question has not reached trial in the UK, or even the US, courts but there are clues in the existing cases that give us a good idea of how the law will answer it.
The first thing to be clear about is that the law separates out “ownership” of the account (or the relationship with LinkedIn) from the ownership of the information and connections contained within the account. This article assumes that the account is set up by the employee in his/her personal name.
“Ownership” of the Account
In opening the account the employee enters into a contract with LinkedIn and may only have one account open at any time. He is obliged under the terms of that contract to keep his password confidential, not to let anyone else use the account and he cannot transfer ownership of it to any other person.
An employer may encourage an employee to utilise LinkedIn and may even permit the employee to reclaim the costs of LinkedIn premium services by way of expenses, but this does not alter the basic contractual relationship between Linked In and the employee. The employer is not a party to that contract. Importantly, an employer cannot force an employee to hand over the password or login details to his account. Any employer attempting to do this will be acting unlawfully by procuring a breach of the LinkedIn contract terms by the employee.
Up to this point the law seems to put the employee in control. However, the employee has almost certainly populated his LinkedIn account with contacts that he has made in the course of his employment. Indeed, he may have used the LinkedIn facility which automatically trawls his work email account or address book in order to invite all his candidates and clients to become LinkedIn contacts. His personal LinkedIn account may then be filled with contacts to which he has access by virtue of his employment. Who owns the contacts?
Ownership of the Contacts
Firstly, client or candidate contact details are only capable of being ‘owned’ if the employer can demonstrate that they amount to confidential information. It is often said that the information that the owner wants to protect must be the equivalent to a trade secret . 1 This causes some confusion when talking about third party contact details because phone numbers and email addresses themselves clearly belong to the third parties by whom they are used. However, a business invests significantly in building up its network of business contacts and the body of data so gathered represents the fruit of that investment. If a competing business were given access to the data it would take the benefit of a good part of the investment. Where the employer can show investment in the collation of contact data it is likely that it will be protected as equivalent to a trade secret, i.e. under the law of confidentiality.
Observations by judges in relevant cases suggest that basic data which is in the public domain such as the name of a client company and its head office address and contact telephone number do not amount to the equivalent of trade secrets. However, clients’ direct dial telephone numbers and email addresses are quite likely to be treated as confidential as are individual candidates’ contact details . 2 This means that all the really useful contact details are protected by the law of confidentiality and may not be disclosed or used by the employee without employer authorisation (add to this the fact, that regardless of whether or not the information is confidential, it is well-established law that to take for his own benefit a copy of a list of customers or other contacts and subsequently to use it is a breach of an employee’s duty of fidelity owed to the employer).
The usual breach of confidentiality occurs when toward the end of his employment an employee prints off or emails to himself a list of the employer’s contacts contained on the employer’s computer systems because he wants to use it in his new job. The situation with LinkedIn is different because the employee has obtained confidential information in the course of his employment for the purpose of his employment. His employer has permitted him to do this and there is no question that he has obtained the information by any underhand means. If the employer has let the employee have the information can he take it back?
An Australian case in 2001 3 dealt with this issue outside the context of social media. In that case an employee had copied a significant number of client contact details into a personal address book which she used in the course of her job. She then sought to keep and use the address book when she went to work for a competitor. The Supreme Court of Australia decided that the employer’s client list amounted to confidential information and whilst the employee could copy it into her address book for the purpose of her employment those copies had to be returned to the employer at the end of the employment. Insofar as the address book also contained personal contact details, e.g. of her friends, a way would need to be found to return those details to the employee.
Should social media be treated any differently to a physical address book?
The English courts have already decided that where an employee keeps all his contacts (including his own contacts that pre-existed his employment) in his employer’s Outlook system, backed up on the employer’s server, the Outlook contact list will belong to the employer . 4 But as noted above a LinkedIn account is provided directly to the employee by LinkedIn and is hosted on LinkedIn servers therefore the Outlook case law is not directly applicable. Only one reported English case has touched on the ownership of confidential employer contacts migrated by an employee into LinkedIn . 5 That case gives us some guidance as to the English court’s attitude to LinkedIn data but the reported judgment relates only to an application by the employer for pre-action disclosure of the employee’s database of contacts as stored on LinkedIn the court did not give a ruling on what should ultimately happen to the employee’s Linked In connections.
It was alleged that the employee in that case used his employer’s confidential contact database to upload email addresses to LinkedIn and send LinkedIn connection invitations to clients and candidates in the database. He did not do this surreptitiously and indeed may have been encouraged by his employer to used LinkedIn but there was evidence that around the time of his resignation, he initiated a more widespread transfer of email addresses. The Judge thought that there were reasonable grounds for believing that this activity by the employee was actionable by the employer as a breach of confidentiality although he did not reach a firm conclusion on this point. One key point that he made was that, even if the employer had authorised the employee to extract its confidential information and use it on LinkedIn, it had only given such authorisation for the purposes of the employment. By extension the argument follows that, just as with physical address books (or other hard copy lists), the contact details should be handed back to the employer at the end of the employment. In the context of LinkedIn this can only be achieved by the employee deleting the relevant connections from his LinkedIn profile.
The employee in the LinkedIn case argued that in uploading email addresses to LinkedIn with his employer’s consent he had not breached confidentiality because once the contacts accepted his invitation and became live on his LinkedIn account they ceased to be confidential. The Judge did not accept this argument, he said that if the information was confidential it was the act of uploading it that eventually lead to the contacts being accessible to the employee after his employment ended (even though there was an interim step of the contact accepting the invitation to connect). This argument would bear further scrutiny and may well be where any battle lines are drawn if the issue is fully argued before the courts.
LinkedIn & Freedom of Expression
Employees often seek to argue that their right to Freedom of Expression will be fettered by their employer demanding the return or deletion of connections on LinkedIn. Such an argument is unlikely to be attractive to the UK courts. In the Outlook case the journalist defendant argued that, if he were deprived of his Outlook contact list it would breach his right to Freedom of Expression (which was of enhanced importance because of his profession). The Judge did not accept this argument because there was no attempt by the employer to prevent the employee from contacting people whose details he had stored independently of his employment. In the case of LinkedIn accounts, and provided that employers only ask the employee to delete contacts derived from the employment, it is likely that the court will take the same attitude. The argument for breach of Freedom of Expression might have considerably more mileage for an employee if the employer were to try to take control of the LinkedIn account itself.
Would there be a different answer if the employee had compiled new LinkedIn contacts via searches on the LinkedIn site rather than uploading email addresses? Could the employer assert ownership over those contacts which are not on its own database?
It is established by statute that an employer owns any intellectual property created by the employee in the course of his employment. Part of a recruitment consultant’s job is to generate new contacts. The new contacts would either amount to a database which is a form of intellectual property automatically owned by the employer or would be protectable as confidential information owned by the employer. The employee should record any new contacts on his employer’s database and if he omits to further his employer’s interests by doing this he cannot benefit from that omission. In short, any new contact details belong to the employer.
Despite the above analysis employees and bloggers on the subject feel that LinkedIn accounts and their content should remain solely under the control and ownership of the employee. The legal argument is that the LinkedIn connections form part of the employee’s stock of knowledge that he is entitled by law to take with him throughout his career. There is presently no sign that the English courts will agree with this argument and they may not get their chance to rule on it. Many employers are building LinkedIn policies into their employee handbooks and making it clear to all employees that they should familiarise themselves with those policies. Employees who have managed to build up extensive LinkedIn accounts would be wise to negotiate clear terms relating to their contact network before accepting new offers of employment.
NB This article is intended for general guidance only. Legal advice should be sought before taking action in relation to specific matters. Where reference is made to court decisions, facts referred to are those reported as found by the court.
 Facenda Chicken Ltd –v- Fowler  CH 117
 Penwell Publishing (UK) Ltd –v- Ornstien and others  EWHC 1570
 NP Generations PTY Ltd –v- Feneley  SASC 185
 Penwell paragraph 127
 Hays Specialist Recruitment (Holdings) Litd & Anor. –v- Ions & Anor  AII ER 216