15 Jun 2014

LINKEDIN: Whose connections are they anyway?

Authored by: Jamie Liddington

LINKEDIN: Whose connections are they anyway

Standfirst: Employees are encouraged by their organisations to use social media sites such as LinkedIn for professional networking purposes. But what happens after your employment ends? Who owns rights to your LinkedIn contacts? Jamie Liddington of Hadef & Partners considers the legal implications surrounding the use of LinkedIn.
 
Since its launch in 2003, LinkedIn has become the leading professional networking website with more than 279 million users in over 200 countries and territories worldwide. LinkedIn has been particularly popular in the MENA region with LinkedIn’s own estimate of 10 million existing users. However, despite the fact that LinkedIn’s terms and conditions state that the ownership of a LinkedIn account is personal to the account holder, it is becoming increasingly common for employers to seek to control and assert ownership of “confidential information” (i.e. client details) which is obtained by employees during the course of their employment.  This article considers Federal Law No 8 of 1980 Regulating Employment Relationships in the UAE (as amended) (the “Labour Law”) and DIFC Employment Law No. 4 of 2005 (as amended) (the “DIFC Employment Law”) as they apply to employees’ use of LinkedIn.
 
Confidential Information
 
In both the “on shore” area (where the Labour Law applies) and the DIFC (where DIFC Employment Law and the common law principles apply) the employment issues involving LinkedIn are essentially the same; employers seek to include, within their employees’ contracts of employment, terms which protect the employer’s confidential information both during and after the employment relationship.  In some cases, employers go a step further in requiring that employees agree to post-termination restrictions which seek to restrict and control the employee’s actions after the employment has ended.
 
The enforceability of post-termination restrictions (and the remedies available where there has been a breach of a restriction) is the subject of another article entirely but the general proposition is that post-termination restrictions should only be included in a contract of employment where they are necessary to protect a legitimate business interest and where they extend no further than is reasonably necessary to protect that legitimate business interest. Most often, employers cite trade connections and confidential information as the legitimate business interest requiring protection.
 
In recent years the protection of confidential information has become increasingly challenging as employees are often actively encouraged by employers to use social media sources to maintain their contacts within the course of their employment.  As a consequence, the boundary between what constitutes confidential information capable of protection and what is either personal or in the public domain has become unclear.
 
Furthermore, neither the Labour Law nor DIFC Employment Law provides a definition of “confidential information”. Therefore, it is important that a careful approach should be taken in order to ensure that the contract of employment adequately defines what information will be considered confidential. Thereafter, different but not wholly dissimilar considerations apply.
 
DIFC Employment Law
 
The DIFC has its own common law judicial system with exclusive jurisdiction over all employment law matters within the defined boundary of the DIFC. The DIFC Court will therefore apply DIFC law (first and foremost in this context – DIFC Employment Law and DIFC Contract Law No. 6 2004) and, where necessary, in order to interpret any ambiguous or untested provision, the DIFC Courts will consider judgments from the common law jurisdictions.  As DIFC Employment Law does not provide any definition of confidential information, it is likely that, in a contested matter, the DIFC Courts would be referred by counsel to common law authority in an attempt to persuade the Court as to whether LinkedIn data should be considered confidential information belonging to the employer or whether the employer has no proprietary right to the information.
 
It has for a long time been the case under the common law that general contact details available from the public domain cannot constitute confidential information, but private contact information gained during employment is a different matter. It has also been held that “direct dial” and mobile telephone numbers and email addresses stored on an employer’s IT systems can be classified as confidential information, and as such are owned by the employer.
In Hays Specialist Recruitment Holdings Limited v Ions, the High Court of England & Wales dealt with an application relating to pre-action disclosure. In this case, the employee had sent LinkedIn connection requests to some of his employer’s clients and candidates shortly before leaving his employment to set up a competing business. Ultimately, the Court took the view that contact details obtained during the course of employment will remain the property of the employer, even after they were added to LinkedIn, and it therefore granted the disclosure sought.
 
More recently, in the case of Whitmar Publications Limited v Gamage, the High Court addressed the status of LinkedIn contacts in more detail. Whitmar applied for an injunction against ex-employees who used the company's LinkedIn group contacts to market the launch of a rival business. One of the employees maintained four LinkedIn groups on behalf of the company and refused to provide the company with any of the access details for the groups.
 
The Court granted an interim injunction preventing the employees using the company's contacts. In doing so, the Court found that the employees’ actions amounted to a misuse of "confidential information" and a breach of the implied duty of good faith. This was despite the fact that LinkedIn’s terms state that the account is personal to the account holder and the information itself is stored on LinkedIn’s servers and not the employer's server(s).
 
The Labour Law and other Federal Laws
 
Outside of the DIFC, the following provisions apply:
·         Article 120 of the Labour Law provides for instant dismissal – without notice or payment of end of service gratuity – where an employee reveals any secret of the establishment in which he is employed.
·         Article 127 of the Labour Law states that, “where the work assigned to an employee allows him to become acquainted with the employer's clients or to become familiar with the secrets of the business, the employer may require him to refrain, after the termination of his contract, from competing with him or participating in any enterprise competing with his own”.
·         Article 379 of Federal Law No. 3 of 1987 Concerning the Penal Code (the “Penal Code”) provides that an ex-employee may be sentenced to a term of imprisonment of a minimum period of one year and/or to a minimum fine of AED20,000 if, by virtue of his profession, craft, position or technical skills is entrusted with a secret and then divulges that secret in situations other than those in which disclosure is permitted by law or uses it for his own personal interest or the interest of another person unless authorised by the confiding person to disclose or use it.
 
At present, there have been no reported cases from the UAE Courts in relation to claims concerning the Labour Law and the Penal Code provisions (above) in the context of an employee’s alleged misuse of information obtained during the course of employment and stored on a LinkedIn account.
 
It therefore remains to be seen whether information stored on a LinkedIn account will be considered a “secret” and whether or not that phrase denotes a higher threshold of importance than merely “confidential”. This terminology difference is unlikely to be significant and is probably no more than an idiosyncrasy arising out of the translation of the original Arabic text prior to the more developed concept of “confidential information”.
 
Blurred Lines
 
Until there are rulings from the UAE Courts or the DIFC Courts, the position remains unclear. However, the following considerations are likely to be taken into account by the Court when reaching a decision:
 
-         If the data is stored on a personal account, employers will find it more difficult to argue that the information belongs to them. Particular consideration should be applied to the account holder’s “linked” email address (i.e. whether the LinkedIn account was set up using a personal or work email address) and whether the employee has used a photograph commissioned and paid for by the employer when setting up his/her profile;
-         If the information is specific to an individual client contact and is gained during the course of the employee’s employment, such as email addresses and direct dial telephone numbers, this would strengthen the employer’s position.
-         If the employee compiled his/her contacts from uploaded email addresses stored on the employer’s systems, or the employer can show that they provided the employee with business contacts and/or paid for a premium listing, a claim for ownership is likely to be more in the employer's favour.
 
The law in this area is rapidly evolving in order to (try to) keep pace with the reality of the modern business environment. Employers are increasingly introducing social media policies in order to govern the position of ownership of LinkedIn contacts as well as a multitude of other issues arising out of other social media platforms. Employers should also consider whether it is appropriate to introduce contractual provisions which (i) seek to prevent employees from dealing with or soliciting business from the employer’s customers after their employment ends or (ii) require that the employee deletes any business related contacts who have been added during the course of the employment.

This article, including any advice, commentary or recommendation herein, is provided on a complimentary basis without consideration of any specific objectives, circumstances or facts. It reflects the views of the writer which may, in some cases, differ from those of the firm, especially in the develop jurisdiction of the UAE.