Employer vs. Employee: Ownership of LinkedIn Contacts

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Employer vs. Employee: Ownership of LinkedIn Contacts

Recently, someone suggested to me that an employee’s LinkedIn contacts could be considered company property and even a protected trade secret of the employer.  And, therefore, when an employee, who has previously been given access to this contact information, leaves the employer, the employee is required to relinquish those contacts, and perhaps the entire LinkedIn account, to the employer.

This notion focuses on the following scenario:  1) an employer takes great care to protect and keep client contact information under actual or virtual lock and key (demonstrating the high value and confidential nature of the contact information); 2) the employer provides a trusted employee with the prized client contact information; 3) the company also encourages the employee to enhance relationships with the contacts by connecting with them on LinkedIn and perhaps gaining further private avenues of contacting each client (mobile phone numbers, direct line phone numbers, home phone numbers, personal email addresses, etc.); and 4) eventually, the employment relationship ends.   In my opinion, there is some validity to this suggestion, however, unless the employer and employee have entered into an Agreement, the conclusion suggested is ultimately faulty.

The Law

There is very little law in the area of LinkedIn (or social media) contact/content ownership in the employment setting.  As with most legal issues concerning social media, the law has not yet caught up.  One of the few reported cases involving LinkedIn content/contact ownership in the United States was decided in March 2013.  According to a U.S. Federal Court in Eagle v. Morgan, Linda Eagle co-founded Edcomm in 1987.  In 2010, Edcomm was sold, and by June 2011, Eagle’s employment was terminated.  During her employment, Eagle had provided to her employer her LinkedIn password, had let other Edcomm employees to post on her profile, and had connected with over 4,000 people.  After Eagle’s termination, Edcomm maintained Eagle’s LinkedIn account, changed the password, profile picture, and credential’s of “Linda Eagle” to those of Sandi Morgan, the interim CEO of Edcomm.

Importantly, Edcomm did not have a specific policy about employee LinkedIn use for work-related purposes, though it did encourage employees to use LinkedIn for business development.  When Eagle’s employment was terminated, she did not have a written agreement concerning her LinkedIn account.

Eagle sued, and the court found in her favor on a few of her state (Pennsylvania) law claims:  invasion of privacy by misappropriation of identity, misappropriation of identity, and unauthorized use of name in violation of 42 Pa. C.S. § 8316.  The court also found that Eagle’s LinkedIn account belonged to her, and not Edcomm, and it relied heavily on LinkedIn’s User Agreement at the time which provided:  “If you are using LinkedIn on behalf of a company or other legal entity, you are nevertheless individually bound by this Agreement even if your company has a separate agreement with us.”  The court, however, also found that Eagle had failed to prove damages to the court’s satisfaction, and therefore, she did not recover any money from Edcomm.

There has also been a recent case from the United Kingdom regarding similar issues.  For a closer analysis of the case of Whitmar Publications Limited v. Gamage, decided by a UK court, I recommend reviewing this post in The Guardian.  In essence, the court in the UK determined in favor of the employer and against former employees who used contact information to establish a competing business.

Steps An Employer Can Take To Preserve Its Contacts

1.  First and foremost, employers should have a social media policy.  And, with respect to LinkedIn and contacts, the policy should spell out the expectations the employer has regarding employee use of LinkedIn for company purposes, ownership of contact information, and procedures for updating the company of any additional client information the employee receives (for example, direct phone numbers, home phone numbers, home addresses, personal email addresses, etc.).  Simply, the company should put in place policies and procedures for updating the company’s central client database, rather than having important client information resting solely in various LinkedIn accounts of numerous employees.

2.  Second, employers should consider entering into agreements with employees early in the employment relationship regarding the ownership of contacts/client information, and what is considered inappropriate use of contact information during employment.

3.  Since one of the biggest social media risks for employers involves departing employees, it is crucial for employers to put in place policies and agreements that focus on post-employment use of social media.  Such post-employment provisions should include instructions/deadlines for an employee to update LinkedIn profile information, whether the employer requires former employees to delete or “disconnect” LinkedIn connections previously made solely because of the employer, and non-solicitation and non-competition agreements as allowed by law.  Non-solicitation agreements can be useful to prevent former employees from soliciting the employer’s customers/clients, vendors and even other employees to work for a competing business.  The more “reasonable” such provisions are, the more likely they will be enforced.  And, non-solicitation agreements are much more likely to be enforced than blanket non-compete agreements.  These types of agreements are particularly important because the LinkedIn user agreement affirms that each person’s profile belongs to that user, and not to a third party.  Thus, by getting these other various agreements/policies in place with their employees, employers can still help shape how an employee may use (and what may remain in) their individual LinkedIn profiles after they depart the company.

4.  Finally, employers should expand (or start using) Trade Secret/Confidentiality/Non-Disclosure Agreements with their employees to protect the confidential information the employee learns while employed by the company.  If client information truly is under lock and key as described in the scenario above, then a Confidentiality/N0n-Disclosure Agreement will a) help keep that information confidential during and after the employee’s employment; and b) demonstrate to any court that the company took many steps to preserve the value (confidentiality) of the client information.  In other words, if the company takes no steps whatsoever to preserve confidentiality, the company will have tremendous difficulty persuading a court that the information is vital to its business, and that public dissemination would harm the company.

Information provided on this website is not legal advice, nor should you act on anything stated in this article without conferring with the Author or other legal counsel regarding your specific situation.  No attorney-client relationship is created via this website.

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