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More and more cases are emerging of former employees being sued by their company of employment when they leave, in an effort to retain the contacts that have been built up through social platforms such as Twitter, Linkedin and other connection making sites. In this data driven economy, such contacts are valuable, and companies don't want them to leave when an employee heads off to work with a rival. Dawn Dickson, employment partner at legal firm Davidson Chalmers discusses the growing issue.
In today’s IT-focused and social media-driven world of business, the question of who owns all the individual contact lists that exist within an organisation is becoming more and more prevalent. Do these sit with the employee who has built and nurtured their own database – which may be held online or within a company’s IT system - during their time of service? Or should these belong to the employer who has, in many cases, provided the platform to enable an individual to create this information source?
I’m afraid the technical answer to this question is far from straightforward. While the basic principle is that business contacts are more likely to belong to the employer, the specific circumstances surrounding each case need to be looked at as this is what will ultimately determine who has legal ownership.
For the first time in the UK, an ex-employee who resigned from his job to start his own consulting business has recently been ordered by the English Courts to hand over his LinkedIn contacts to his former employer. Despite the fact that employers often encourage their staff to create their own profile through business-focused networking websites such as LinkedIn, the judgment went against the employee. The court ruled that because there was a risk that the ex-employee may have attempted to poach clients from their former employer by using contacts on this database, then its ownership should sit with the employer.
Despite the outcome of this recent decision, many commentators (myself included) believe that the ownership of an individual’s actual profile on a social networking site will remain with them even if the contacts are deemed to belong to their employer. However, there would be nothing to stop an employee, once he parted company with his current employer, from contacting the same people again on LinkedIn and rebuilding their contacts list from scratch. It may not be the most practical way of doing things but it could prevent any legal issues from arising.
The method with which an individual stores their contacts can also determine ownership. Another case from the English courts in 2007 decided that if an employee keeps all their contacts in their company’s server-backed Outlook system then these would belong to the employer. Perhaps surprisingly, this would also include any of the individual’s business contacts that pre-existed their employment. While the employer could not claim ownership of basic data in the public domain – the name of a client company, their head office address, etc - this case seems to make clear that direct dial phone numbers and individual email addresses would be treated as their property. While it was not clarified in this case, it is also highly likely that any personal contacts included in an employee’s database would be retained by the individual.
I believe these cases would be interpreted in much the same way in Scotland with employers north of the border likely to successfully claim ownership of their internal database contacts but unlikely to be able to stop an employee updating their LinkedIn profile without having a stringent contractual provision in place. I would also advise that there should be restrictive covenants in employment contracts establishing what employees can and cannot do post termination in terms of approaching contacts on the client database.
The above cases highlight just one aspect of social media in the workplace and the potential for conflict between employee and employer, a trend becoming increasingly common. This issue of content ownership combined with the growing number of dismissals resulting from inappropriate Tweets, Facebook and LinkedIn posts emphasises one important point for all employers: the need to have a robust social media policy in place.
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