Who ‘owns’ LinkedIn data when an employee departs the company? According to two specialists at Kensington Swan, this question has not yet reached the courts in New Zealand but there are clues to the likely answer.
Jenni Rutter is special counsel – intellectual property and Nura Taefi, solicitor – employment at the law firm.
They say that in 1991 case two Christchurch real estate agents left their employer, taking photocopied client contact lists with them to use in competing business.
“An injunction followed and the court said that there was nothing wrong with an ex-employee who is not under restraint of trade making use of the names of his former employer’s clients.
“But the line would be drawn against an employee taking list of business records or even deliberately memorising the information.”
Rutter and Taefi say control over LinkedIn contacts has been dealt with specifically in the UK.
“Hays Specialist Recruitment had encouraged its employees to create LinkedIn accounts for employment purposes. But when one of its employees left to carry on competing business, he began using his LinkedIn account to invite Hays’ clients to join his network.
“The court ordered the employee to return all the contact information he obtained in his capacity as an employee of Hays and said that contact details on LinkedIn account gathered in the course of employment are confidential information, which remained the property of the employer.”
According to Rutter and Taefi, it is not clear how similar case would be decided by the New Zealand courts.
“Generally, contacts on an employee’s LinkedIn account would not be deemed confidential information, especially in circumstances where the account has been set up and managed by the employee,” they say.
Rutter’s and Taefi’s recommendations to managers:
•Properly drafted restraint of trade and non-solicitation clauses are must. But pursuing an ex-employee through the courts to enforce restraints is costly and may attract bad publicity.
•Make sure employment agreements contain express obligations that describe the types of information considered to be confidential. good start would be stating that contact details acquired on company time, or provided by the company, are company information and must be returned to the company at the end of the employment relationship. M
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