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LinkedIn and the law: Are you protected?

Wednesday, 3rd December 2014, by Loran McDougall

In today's Workplace Bulletin:
  • Why you need to keep an eye on your inbox tomorrow
  • Case Laws: How is the law protecting your LinkedIn connections?
Dear Reader,

Before I launch into today’s bulletin, I want to suggest you keep an eye on your inbox tomorrow. We’ll be launching an important new tool for conducting workplace investigations and you’ll have an opportunity to secure your copy at significantly discounted price. Now, on with today’s bulletin...
Odds are, a good number of your employees use LinkedIn. You might even encourage them to connect with potential and existing clients via this platform.
But have you considered exactly how employees may use this information? For example:
  • What if an employee uploads your client list and uses it to invite LinkedIn connections?
  • What if an employee poaches your clients using those connections?
Your employment contracts may expressly prohibit employees from taking these actions. If they do not, you will probably be left to defend yourself with the – often implied – obligations of employees:
  • not to misuse or disclose confidential information; and
  • to faithfully promote your interests.
Charles Power explores this in today’s bulletin.
Until next time,
Jessica Oldfield
Loran McDougall
Editor
Workplace Bulletin
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Even if you aren’t using social media, your employees definitely are!

Case Laws: How is the law protecting your LinkedIn connections?
by Charles Power
Editor-in-Chief, Employment Law Practical Handbook
Australian law is unclear on whether LinkedIn connections constitute confidential information, or trade secrets. And courts in other countries have come to conflicting conclusions.
In the US, in Eagle v Morgan (2011), it was found that LinkedIn connections are not trade secrets, as the information is “either generally known in the wider business community or capable of being easily derived from public information”.
In the UK, however, a court disagreed with an employee who thought it was okay to use information from his employer’s client database to establish LinkedIn connections. In Hays Specialist Recruitment (Holdings) v Iions (2009), the employee’s argument was that, once an invitiation to connect was accepted, the information ceased to be confidential because a wider audience, i.e. his network, could access it. The court’s view was that, even if the information ceased to be confidential, its transfer was done so that the employee could use it for the benefit of a new employer, rather than Hays.
Last year, the Fair Work Commission (FWC) displayed a similar view when it upheld an employee’s termination after the employee attempted to solicit his employer’s clients through LinkedIn as a way to expand his own private business.
In Bradford Pedley v IPMS Pty Ltd (2013), the employee had worked for the employer since 2011, and had carried out private design work in his own time through his business, Reveal ID – this was known to the employer. In January 2013, after having decided that his employer was not interested in his career progression, the employee contacted some of his LinkedIn connections explaining that he was “now seeking to expand Reveal ID to a full-time design practice over 2013”. His message concluded, “One of the many benefits of working with a new company are that you get the oerators’ prior big business experience at small business rates! I would be happy to discuss any opportunities, no project too big or small, and look forward to the possibility of working with you in the near future”.
The employee was dismissed the next day, and filed an unfair dismissal claim. The FWC found that the employee, who was relatively senior and trusted to deal directly with clients, “owed an obligation to his employer to faithfully promote his employer’s interests”. It found that the LinkedIn message was serious misconduct because the employee was clearly trying to set up a competing business – “a clear breach of his obligation to put the interests of his employer before his own interests.” 
How can you protect your information?
Given the uncertainty surrounding LinkedIn connections, what can you do to protect yourself? Consider:
  • including terms in employment contracts that prohibit your employees from contacting your clients for a certain period of time after they leave your employment;
  • having a social media policy that employees must comply with as a condition of their employment; and
  • having your employees keep their connections confidential, i.e. not viewable.
Finally, if you suspect that an employee is misusing information:
  • seek legal advice immediately; and
  • write to LinkedIn requesting that they preserve the data relating to the employee’s account so it can be used at a later date (LinkedIn agreed to do this in Hays Specialist Recruitment (Holdings) v Iions (2009).
Regards,
Charles Power
Charles Power
Editor-in-Chief

Employment Law Practical Handbook



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