What happens to your employee’s LinkedIn contacts when he or she leaves your business? We explore what you can do to protect these valuable contacts.
LinkedIn recently reported record revenues for Q4 of 2012, describing it as a “transformative year”, at the end of which the company boasted over 200 million members in over 200 countries worldwide, up from 4,500 members when the site first launched in 2003.
One question which often concerns employers is what happens to an employee’s LinkedIn contacts when he or she leaves the business. LinkedIn’s own terms and conditions provide that ownership of a LinkedIn user account remains with the individual; this much is clear.
But ownership of the individual’s contacts is another question, particularly where the contacts are made during the course of employment, and/or have been transferred from the employer’s confidential client list.
In many cases, employers are only now beginning to think about this issue, but it is a ticking time bomb. Increasingly, we are going to see well-connected employees moving on to a new job and taking their LinkedIn contacts with them.
Where the employee in question is an account manager or a sales person, or otherwise works in a business which is heavily dependent on client relationships, this could cause real damage to the former employer’s business.
So what five steps should businesses take to protect their contacts?
1. Whether contained in a social media policy or elsewhere, employers will be better protected if they make express provision for the ownership of contact lists made in the course of employment.
Where these are stored on LinkedIn, you could require employees to provide written confirmation that they have deleted the contacts prior to the termination of their employment.
2. If you do decide to put a clause in your employment contracts about this, back it up with well-drafted post-termination restrictions which expressly prevent an ex-employee from working for a competitor, soliciting or dealing with clients or prospective clients, and poaching other staff for a period of time following the termination date. You should tailor these restrictions carefully depending on the nature of the role and seniority of the individual in question.
3. Those employers who have appropriate protection in place will still face practical difficulties when it comes to the departure of key employees with valuable contacts.
4. Imagine an employee confirms that she has deleted all of her company contacts from LinkedIn. If a colleague is still linked in to the departing employee and is willing to cooperate, this might enable the employer to check whether the contacts have in fact been deleted.
5. However, even if they have, the employee could have retained the contact details in some other format, and might re-connect to her contacts on LinkedIn soon after. In order for contractual protections to have any real effect, the employer might need to be ready to take (or at least threaten) court action.
In a sense, the rise of social media does not really create new issues for employers; rather it provides a new context for the same old problem of how to retain clients on the departure of key employees. What can be said for certain, however, is that employers who have anticipated these issues, and put appropriate contractual wording in place, will be better placed to protect their business than those who have not.
Have you experienced any of the issues above? How did you deal with it?
If you would like more information about any of the topics discussed in this blog please contact Virginia Allen, Employment Senior Associate, Kemp Little LLP or Elizabeth Kirk, Employment Associate, Kemp Little LLP