Alecia Thompson of PCC Lawyers writes that for many businesses that operate in client driven industries, it is not until an employee leaves the organisation that the business asks two important questions: who owns the LinkedIn connections that the employee amassed during the employment and do those connections amount to confidential information capable of being owned?
Ownership of LinkedIn accounts and the connections made during employment has been widely debated but has not yet been authoritatively decided by courts here in Australia or in other jurisdictions. This is often due to the fact that whilst the employment relationship is still ongoing, LinkedIn is regarded as a key marketing and networking tool for the benefit of both the employer and the employee. Employers often fail to plan for when an employee leaves the organisation and to recognise the threat that LinkedIn poses to an organisation’s profitability should an employee be permitted to leave and retain ownership of the LinkedIn connections that they have acquired during their employment.
An employer’s need to retain ownership of LinkedIn connections will usually be dependent upon the industry that they operate in and the ability of a former employee to exploit the information for their own purposes if they commence employment for a competitor or establish their own business in competition with their former employer. An industry that is particularly reliant upon LinkedIn and the connections that are made during employment is the recruitment industry, which is starting to focus its efforts on establishing connections on LinkedIn with potential candidates for current and future job openings.
In a UK case, Hays Recruitment (Holdings) Ltd & Anor v Ions & Anor  EWHC 745, a recruitment consultant copied the email addresses of Hays’ clients and then used them to connect with clients on LinkedIn once he had left Hays and established his own rival recruitment firm. There was evidence to suggest that he had contacted the connections in an attempt to entice them to leave Hays and become clients of his new firm. In a preliminary pre-trial hearing, the High Court of England and Wales found that as Hays had encouraged the employee to use LinkedIn for the purposes of carrying out his job, the connections amounted to Hays’ confidential information. The employee was ordered to hand over all of his LinkedIn connections, as well as messages sent and received from LinkedIn.
The High Court of England and Wales took a similar approach in Whitmar Publications Limited v Gamage & Ors  EWHC 1881, where the court found that Whitmar’s LinkedIn connections and groups were considered to be its confidential information. In this case, a number of former editors and publishers established a competing business and attempted to solicit business away from Whitmar by using LinkedIn groups that were maintained by Whitmar. Once discovered, the former employees refused to provide Whitmar with the access details for the LinkedIn groups that they had previously managed as part of their employment. The Court granted a ‘springboard’ injunction against the former employees restraining them from gaining an unfair advantage due to their misuse of confidential information, including LinkedIn contacts and groups.
Whilst the Court did not specifically determine whether the groups and connections were the property of Whitmar, the Court found that LinkedIn connections and groups will have the same status as any other confidential information, where it is well established that exploitation is prohibited.
Attempts by employers to assert ownership over an employee’s LinkedIn connections are made even more difficult by the User Agreement between the individual and LinkedIn which states: “You agree that… you are entering into a legally binding agreement (even if you are using our services on behalf of a company).”
To date, LinkedIn has appeared unwilling to intervene in a dispute where the employer is attempting to claim that it is the legal owner of an employee’s LinkedIn connections. LinkedIn has instead taken the view that the rightful owner, under the User Agreement, is the employee and not the employer. It has therefore become the duty of the courts to determine otherwise.
In Eagle v Edcomm & Ors (No 11-4303) (E.D. Penn, 12 March 2013), an employee who had over 4,000 LinkedIn connections sued her former employer, Edcomm, after it took control of her LinkedIn account and changed the password, effectively locking her out of her account. Edcomm then changed the account to reflect the name, picture, education and experience of the newly appointed replacement employee. After lodging a dispute, Linkedin took over the account and then gave access back to Ms Eagle, who then commenced proceedings against Edcomm. The US District Court found that this conduct amounted to an invasion of privacy, a misappropriation of identity and an unauthorised use of name. However, the employee failed to establish that she had suffered any loss and was therefore not awarded any damages.
Social Media Policies
There is an increasing trend for employers to have social media policies in place which set out the conduct that is expected of employees whilst using LinkedIn and what is to happen to a LinkedIn account once the employee leaves the organisation. Whilst these policies will not be determinative of a dispute that may arise, they do establish and manage the expectations of both parties throughout the employment relationship to ensure that an employee is not taken by surprise when their former employer claims that it is the owner of the employee’s LinkedIn account or connections. What steps can a business take to assist it in retaining connections after termination? If LinkedIn connections and groups are an important asset to an organisation and are vital to its future survival, there are a number of steps that it can take to assist it in retaining ownership after termination of employment:
• Consider implementing a workplace policy or inserting terms into employment contracts that set out the obligations of an employee to hand over their LinkedIn account (or alternatively, to delete it altogether) upon them leaving the organisation and whether there are any other post-employment obligations concerning LinkedIn that they must comply with.
• Establish expectations throughout the employment relationship, reinforcing to employees that they will be required to surrender their LinkedIn account when they leave the organisation and the reasons why this is required.
• Consider paying for an employee’s Premium LinkedIn account. The LinkedIn User Agreement for premium accounts states that the party paying for the premium service controls the account and may terminate any other person’s access to it. The ongoing cost of this would be significantly lower than legal costs should it be necessary to commence legal proceedings against an ex-employee who misuses LinkedIn connections or groups.
This article appeared on the PCC lawyers website and has been reproduced with permission.