If an employee collects customer “friends” in LinkedIn, can the employee do business with those “friends” after joining a new employer? Can that employee who collected the customer “friends” while at the former employer now use them with the new employer?

This question became topical due to an English employment law court case in early 2008.

"linkedin_happy_book"Would your answer to the question change if any of the following were added as facts:

  • Assume the employee has a clear confidentiality obligation or has entered a legally binding confidentiality agreement with the former employer?
  • Assume the employee has bulked up the LinkedIn “friends” list with employer customer contacts with whom the employee has not had a direct personal connection.
  • As a final variable, does your answer change if the employee left to start a competing business, and not to just go to another employer?

In the 2008 English court case the former employee was Mark Ions. He left the recruiting company, Hays Specialist Recruitment to set up in competition. Hays, his former employer, sought to court orders to access his LinkedIn database of “friends”. The court made certain orders you can read at FN3 Hays Specialist Recruitment (Holdings) Ltd. v. Ions.

It is predictable that the case involved a recruitment company taking legal action against a former recruiter employee. When economies “boom”, and hence go up, the standards and ethics of recruitment companies and recruiters seem to be pulled in the opposite direction. Here are two examples of that pattern.

  • On the employee side, we know of one recruiter who in recent years set an Australian record for the recruiter’s thousands of so-called “friends” collected in LinkedIn.
  • On the employer side, in advising recruitment companies we’ve often seen their lack of basic know-how about documentation that should be in place in the recruitment process.

With LinkedIn and other social media we live in changing times, technologically.

Fortunately many legal principles are decades or centuries old and they remain applicable to contemporary changing situations. It helps that the applicable confidential information legal principles are very similar in England and Australia.

Such legal stability makes it easier, faster and cheaper to answer employment law questions.

For example, the legal principles relating to protection of confidential information are the same whether an employee takes customer data and:

  • memorises it to apply in a new position,
  • collects it in the internet cloud on social media sites such as LinkedIn or Facebook, or
  • collects it on a mobile phone database, a notebook, photocopies or USB drive.

Thus the fact that LinkedIn was used made the English decision newsworthy, but the principles addressed by the court are age old. "facebook_iphone"

More than technology or law, what complicates decision making in employment law in our repeated experience is shoddy management by businesses, especially ignorance about the employment process and employment contracts and related documentation.

Two cases today illustrate the problem and demonstrate the obvious solutions.

Today I advised a recruitment company and later a former employee of a trading company.

To the recruitment company I indicated that its proposed court debt recover action against a customer would be difficult to win because of the lack of a clear process and also the lack of a good recruitment services contract. End of story, with money lost by the recruitment company.

Later I got a call from a person seeking advice on an alleged three month non-competition restraint which might exist against him as a former employee of a trading company. He had left a company and joined another and a rumour had been passed on that he was about to receive a legal threat for breach of an alleged three month restraint of trade clause.

In a nine minute phone conversation I was able to assess the facts of the situation and give the answer. I said there was little chance the alleged restraint would be applied by a court. It was easy to give that advice because of the complete lack of due process and documentation. The former employee had never received an offer letter, had no written contract, could not recall any relevant verbal restraint obligation, and had received no end of employment debriefing. Further, the former employer had no operations manual and no collated organisational policy or procedures

It’s shocking how rarely businesses position themselves with appropriate employment law advice, contracts and other documentation to get legal protection to deal effectively with common employment law issues.


Photo credit: “Glenn Letham” LinkedIn photo by GISuser.com on Flickr, showing LinkedIn page on a Nokia N95

The book illustrated above, “Happy About LinkedIn for Recruiting“, was co-written by a client and friend of our firm, Des Walsh. Des is a world expert on using social media and blogging. Repeatedly in recent years he has been rated as one of Australia’s favourite bloggers and more recently  “twitters”.

Noric Dilanchian