LinkedIn or LockedOut?
A recent English High Court decision, influential in Hong Kong, gives valuable guidance on 'ownership' of an employee's LinkedIn account used for work.
In Clayton Recruitment Limited v James Wilson and Wilson Mannion Recruitment Limited  EWHC 1054 (Ch), the claimant was a recruitment agency while the defendant was employed by the claimant to deal with candidates and employees. During the course of the defendant’s employment, he created a LinkedIn account with the claimant’s company email address in order to connect with business individuals as a way to carry out his duties of employment. The defendant terminated his employment and incorporated his own recruitment agency.
In the course of starting his new business, the defendant used his LinkedIn account to circulate news of his new venture to his connections, which led the claimant to fear he was misusing confidential information and client contacts.
The dispute was approached in light of specific contractual provisions on confidentiality and post-termination obligations. In particular, the defendant’s employment contract specified that:
- he was not to upload or otherwise make available through any online networking sites (i.e. the LinkedIn account) any confidential information relating to the claimant, including candidate and client contact details, without the express permission of the claimant;
- he could use such online networking sites (i.e. the LinkedIn account) solely for the commercial benefit of the claimant and therefore permit the claimant to monitor the use of such sites;
- on termination of the defendant’s employment, he was to delete all electronic records of professional contacts, including clients and candidates, made during the course of employment with the claimant from the networking or similar accounts (i.e. the LinkedIn account) and to cease using the claimant’s email address for such purposes; and
- on termination of the defendant’s employment, to provide a signed statement that the defendant had, among other things, deleted any information relating to the business of the claimant stored on any disk or computer memory, and all matter derived from such sources which was in the defendant’s possession
(the Termination Obligations).
By a separate document signed by the defendant, the defendant also agreed that the claimant had ownership of all connections made on his LinkedIn account. He also acknowledged the claimant’s right to remove the connections he had made in the course of employment with the claimant (the Separate Undertaking).
Given the Termination Obligations and the Separate Undertaking, the defendant was requested by the claimant to (i) delete his LinkedIn connections and (ii) provide his LinkedIn password. The defendant refused. The claimant’s solicitors subsequently requested the defendant to provide a signed statement stating that he had carried out the above. The defendant also refused. The claimant brought the action in court seeking to restrain the Defendant’s action.
The Court’s observations
The Court made the following general observations:
- The defendant was plainly wrong to resist the demands of the claimant in relation to the connections.
- The effect of the Termination Obligations regarding the LinkedIn Account was to make the list of connections in the LinkedIn Account to be for the benefit of the claimant.
- The Termination Obligations also provided for deletion of the connections. The Separate Undertaking reinforced that obligation.
- The defendant was wrong to regard the connections as purely his, as the Separate Undertaking stated clearly that the ownership of the LinkedIn connections belong to the claimant.
- The defendant was obliged to give up his password to his LinkedIn account so the claimant could remove the connections, and the defendant was wrong to resist this.
- The defendant was wrong about his contractual obligations as he had refused to provide a signed statement that the defendant had complied with his obligations under the Termination Provisions regarding LinkedIn Account
Overall, the Court considered that the claimant was justifiably sensitive about the defendant maintaining his connections in his LinkedIn Account. It was also held that when the defendant’s LinkedIn account was used for the purpose of the defendant’s circular about his new business, the claimant was justifiably concerned that those connections would be used for the defendant’s own competing activities.
What do I need to be aware of?
With an increasing usage of social networking platforms, such as LinkedIn, for marketing and client engagement in the course of employment, there is clearly a grey area as to how connections made in the context of employment are to be protected. This case does give important guidance on how employers should ensure their employment contracts include updated provisions that cover social media connections. Employees should be aware that such provisions that are included in their contracts may be enforced in the courts. While the Hong Kong courts do consider English cases, it will be up to a Hong Kong judge to consider whether this case is persuasive in any particular circumstance.
This alert is for information only and is not legal advice.