Generally speaking, employees cannot take and misuse confidential information when they leave a company. In the past, allegations that a former employee misused client contact information turned on characterizing the source of that information. At the risk of oversimplifying the issue, did the information come from a “Rolodex” (confidential trade connections) or from a “telephone book” (publicly available contact listings)?
Under the telephone book approach, courts have accepted that if client contact information could be easily recalled and found in a telephone book, then it could hardly be said to be confidential. In contrast, the Rolodex approach recognized that the proprietary interest employers have in their clients’ contact information came not from the names or telephone numbers themselves, but rather from the knowledge that said contact would be receptive to solicitation.
Given that LinkedIn now serves as the functional successor to both the telephone book and the Rolodex, where does it fit into this analysis?
LinkedIn as a Rolodex
The English High Court recently addressed whether an employer had a proprietary interest in client contact information contained within promotional groups it had set up on LinkedIn.
In Whitmar Publications Ltd. v. Gamage & Ors, three employees left publishing company Whitmar to start up a competing business. After the employees’ departure, Whitmar discovered they had actively taken steps for over a year to compete with Whitmar before their resignations. Among other things, Whitmar found the former employees had been taking client contact information from LinkedIn groups maintained by Whitmar for its own promotion and benefit. Though not stated in the decision, presumably these groups were “invite-only” and as such the identities of its members were not otherwise publicly available. Adding insult to injury, one of the former employee’s job functions while at Whitmar was to maintain and administer these groups.
The court did not hesitate to find that Whitmar had a proprietary interest in the client contact information originating from the LinkedIn groups. Taken along with other alleged misconduct, the court granted an injunction using the same tripartite test as courts in Canada.
What is notable about this case is that even though the contact information for Whitmar’s clients was presumably otherwise publicly available, the fact that it was gleaned from LinkedIn groups created and maintained by Whitmar caused the court to treat said groups like a Rolodex, rather than a telephone book.
LinkedIn as a telephone book
The facts that gave rise to the decision in Whitmar can be contrasted to two cases from Quebec and Ontario, where the courts each considered the LinkedIn use in question to be more akin to a telephone book.
In Exfo Inc. v. Les Réseaux Accedian Inc., a former employee of Exfo Inc. subject to a number of restrictive covenants joined Accedian Networks, a competitor. The former employee then posted an ad on LinkedIn for jobs available at Accedian and was accused by Exfo of trying to unlawfully solicit former co-workers. To resolve the dispute, the court had to address whether direct solicitation of employees could take place over LinkedIn. Even though job ads on LinkedIn are targeted to some extent, Exfo was unable to demonstrate that the ad in question was a direct and specific solicitation of its employees. Rather, the court accepted that LinkedIn is an open network of users that is generally accessible to the public at large.
Similarly, in Eagle Professional Resources Inc. v. MacMullin, a motions judge held (and the Ontario Court of Appeal agreed) that three employees did not breach their employment agreements when they solicited their former employer’s customers, employees, and contractors. While the employer alleged that the customer information in question was taken from a proprietary internal database, the employees stated they simply looked up the information on social networking sites such as LinkedIn. Preferring the employees’ evidence, the motions judge held that because the client information at issue was “publicly available” from LinkedIn, the former employer could not meet the first step of enforcement; namely, establishing a proprietary interest.
These decisions suggest that certain instances of solicitation arising from individual profiles and advertisements on LinkedIn may be more in line with the telephone book approach than the Rolodex approach. Not only is the information in question publicly accessible, but the LinkedIn terms of service clearly state that ownership of the account resides with its individual user.
Strengthening an employer’s proprietary interest
Given that the path to injunctive relief is paved with proprietary interest, employers should be mindful of certain practices and procedures regarding LinkedIn. For example:
• Any new LinkedIn account for an employee should be opened with a company rather than personal e-mail address. This not only makes accessing the account easier should the need ever arise, but it also helps an employer tie itself to the account’s identity.
• Employment contracts and social media policies should clearly state that an employee’s LinkedIn presence is a database of proprietary trade information built on the employer’s behalf, using company equipment, and during working hours for which compensation is provided.
• Employers should also define “company property” in relevant policies to include LinkedIn connections made during the course of employment. Doing so may allow an employer to require the deletion of said connections when an employee leaves the company.
Regardless of whether LinkedIn is properly considered a Rolodex or telephone book, the fact remains it is now a staple of the modern employee’s networking tool kit. Accordingly, the prudent employer should take the necessary steps now to ensure that its future interests are protected.
Ryan Edmonds is an employment and labour lawyer at Heenan Blaikie LLP where his practice encompasses all aspects of workplace law. Ryan can be reached at [email protected]. This article was written with Justine Lindner, a graduate of Osgoode Hall Law School and articling student in Heenan Blaikie’s Toronto office. Justine can be reached at [email protected].
Update Nov. 19: The plaintiff and defendant in the Exfo case were mistakenly inversed and the article has now been corrected to reflect the right parties.
Under the telephone book approach, courts have accepted that if client contact information could be easily recalled and found in a telephone book, then it could hardly be said to be confidential. In contrast, the Rolodex approach recognized that the proprietary interest employers have in their clients’ contact information came not from the names or telephone numbers themselves, but rather from the knowledge that said contact would be receptive to solicitation.
Given that LinkedIn now serves as the functional successor to both the telephone book and the Rolodex, where does it fit into this analysis?
LinkedIn as a Rolodex
The English High Court recently addressed whether an employer had a proprietary interest in client contact information contained within promotional groups it had set up on LinkedIn.
In Whitmar Publications Ltd. v. Gamage & Ors, three employees left publishing company Whitmar to start up a competing business. After the employees’ departure, Whitmar discovered they had actively taken steps for over a year to compete with Whitmar before their resignations. Among other things, Whitmar found the former employees had been taking client contact information from LinkedIn groups maintained by Whitmar for its own promotion and benefit. Though not stated in the decision, presumably these groups were “invite-only” and as such the identities of its members were not otherwise publicly available. Adding insult to injury, one of the former employee’s job functions while at Whitmar was to maintain and administer these groups.
The court did not hesitate to find that Whitmar had a proprietary interest in the client contact information originating from the LinkedIn groups. Taken along with other alleged misconduct, the court granted an injunction using the same tripartite test as courts in Canada.
What is notable about this case is that even though the contact information for Whitmar’s clients was presumably otherwise publicly available, the fact that it was gleaned from LinkedIn groups created and maintained by Whitmar caused the court to treat said groups like a Rolodex, rather than a telephone book.
LinkedIn as a telephone book
The facts that gave rise to the decision in Whitmar can be contrasted to two cases from Quebec and Ontario, where the courts each considered the LinkedIn use in question to be more akin to a telephone book.
In Exfo Inc. v. Les Réseaux Accedian Inc., a former employee of Exfo Inc. subject to a number of restrictive covenants joined Accedian Networks, a competitor. The former employee then posted an ad on LinkedIn for jobs available at Accedian and was accused by Exfo of trying to unlawfully solicit former co-workers. To resolve the dispute, the court had to address whether direct solicitation of employees could take place over LinkedIn. Even though job ads on LinkedIn are targeted to some extent, Exfo was unable to demonstrate that the ad in question was a direct and specific solicitation of its employees. Rather, the court accepted that LinkedIn is an open network of users that is generally accessible to the public at large.
Similarly, in Eagle Professional Resources Inc. v. MacMullin, a motions judge held (and the Ontario Court of Appeal agreed) that three employees did not breach their employment agreements when they solicited their former employer’s customers, employees, and contractors. While the employer alleged that the customer information in question was taken from a proprietary internal database, the employees stated they simply looked up the information on social networking sites such as LinkedIn. Preferring the employees’ evidence, the motions judge held that because the client information at issue was “publicly available” from LinkedIn, the former employer could not meet the first step of enforcement; namely, establishing a proprietary interest.
These decisions suggest that certain instances of solicitation arising from individual profiles and advertisements on LinkedIn may be more in line with the telephone book approach than the Rolodex approach. Not only is the information in question publicly accessible, but the LinkedIn terms of service clearly state that ownership of the account resides with its individual user.
Strengthening an employer’s proprietary interest
Given that the path to injunctive relief is paved with proprietary interest, employers should be mindful of certain practices and procedures regarding LinkedIn. For example:
• Any new LinkedIn account for an employee should be opened with a company rather than personal e-mail address. This not only makes accessing the account easier should the need ever arise, but it also helps an employer tie itself to the account’s identity.
• Employment contracts and social media policies should clearly state that an employee’s LinkedIn presence is a database of proprietary trade information built on the employer’s behalf, using company equipment, and during working hours for which compensation is provided.
• Employers should also define “company property” in relevant policies to include LinkedIn connections made during the course of employment. Doing so may allow an employer to require the deletion of said connections when an employee leaves the company.
Regardless of whether LinkedIn is properly considered a Rolodex or telephone book, the fact remains it is now a staple of the modern employee’s networking tool kit. Accordingly, the prudent employer should take the necessary steps now to ensure that its future interests are protected.
Ryan Edmonds is an employment and labour lawyer at Heenan Blaikie LLP where his practice encompasses all aspects of workplace law. Ryan can be reached at [email protected]. This article was written with Justine Lindner, a graduate of Osgoode Hall Law School and articling student in Heenan Blaikie’s Toronto office. Justine can be reached at [email protected].
Update Nov. 19: The plaintiff and defendant in the Exfo case were mistakenly inversed and the article has now been corrected to reflect the right parties.
