Financial & Legal News

Social Networking & Post Restrictive Covenants

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A Case Study by Susan Mayall Looking at LinkedIn

A problem arose for a client this week which will be of interest to employers. This client encourages its employees to actively network and use LinkedIn and other forms of networking and social media, with the aim of attracting more customers and being visible to current and potential clients.

One of their sales staff had resigned and had gathered a large number of LinkedIn contacts during their employment with my client. The client was concerned that business contacts would follow this employee and possibly give business to this employee’s new employer. My client, the employer, wanted to know whether there was anything to be done to protect its business interests.

This client had a couple of years ago issued employment contracts to their staff which contained reasonable post-termination restrictive covenants and confidentiality agreements.

The client also had a social media policy drafted at the same time which included “the contact details of a business contact made during the course of employment are the company’s confidential information.  On termination of employment, the employee must provide the company with a copy of such information, delete all such information from their personal social networking accounts and destroy any further copies of such information that they may have”.

The employee who was leaving had signed and returned a copy of her contract and had been provided with a copy of the company’s social media policy.

The practice of employees adding business contacts to social networking accounts such as LinkedIn can be of benefit to the employer whilst the employee is employed there, however this can pose a threat to the employers when the employee leaves as it provides an easy way to take contact lists with them when they leave, if there are no restrictions in place.

If the employee in the above scenario had after leaving used their business contacts in their new role they would have been in breach of the contractual obligations designed to protect the employer’s confidential information.

What this example highlights is that you as the employer should have up to date post-termination restrictive covenants and a social media policy which would assist you to manage this risk and somehow reach a balance between employees interacting with social media and being in breach of contractual restrictions when they leave.

This is a different situation however from an employee in their own time having Facebook, a blog, Twitter or Linkedin account, that would probably be seen as the employees personal property rather than the employers and restraints on trade will only be enforceable if they are no wider than necessary to protect the employer’s legitimate business interests.

For more information on social media policies and post-termination restrictive covenants please contact susan.mayall@pearsonlegal.co.uk

Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers Ltd or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.

This blog was posted some time ago and its contents may now be out of date. For the latest legal position relating to these issues, get in touch with the author - or make an enquiry now.

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