Employee promoting your business on networking sites – who owns his contacts when he leaves…?

By: David Impey

Date: 22 April 2010

An employee whose job is to promote his employer’s business on Twitter has handed in his notice to go to a competitor. Most of his followers on Twitter are clients or suppliers of the business, or good prospects. Do their details belong to the employee, so he can take them to his new job, or do they belong to the employer, so he can’t? 

This is an issue facing an employer friend of mine. There is nothing specific in his employee’s contract of employment stopping the employee (let’s call him Alan) from using or disclosing his employer’s information, but my friend is arguing that the details are his ‘trade secrets’ – confidential information that would be likely to cause real or significant damage to him if they became publicly known. If he is right, Alan cannot use them because ex-employees are under an automatic and implied legal duty to keep their former employer’s trade secrets confidential, whatever their contract says. 

Three issues

But Alan is arguing three points. First, he is saying that the Twitter profile – and everything on it – is his personal profile, not his employer’s profile, so my friend has no right to the details on it. 

Second, he is saying that the details aren’t trade secrets, they are just ‘confidential information’ – information that my friend would not want rivals to find out. ‘Confidential information’ is wider than ‘trade secrets’. Current employees are under an automatic, implied duty not to use or disclose confidential information. But ex-employees can use or disclose confidential information unless it is also a trade secret, or unless they have a contract of employment that specifically says they must. 

Third, Alan is saying my friend authorised him to build up his followers on Twitter – where anyone signed up to Twitter (including competitors) can see them – so my friend has authorised their disclosure. This means they are no longer trade secrets or confidential information. 

My friend disagrees on all three counts. Who wins? 

Confidential information – court backs employer

A recent court case helps my friend. An employer encouraged employee X to invite business contacts to join X’s network on a business networking website. X then left to set up a competing business, and started using those contact details. X’s former employer objected on grounds that the details were the employer’s confidential information, and there was an employment contract between them that prevented X from using confidential information after he left. X argued that the contact details stopped being ‘confidential information’ when they became available on the site. They were not therefore covered by the terms in his contract of employment. 

X lost the case. One reason was that the judge found that the employer’s authority to Y to use such sites had been limited to using them in the performance of his duties as an employee. 

As a result, X was ordered to disclose the contacts’ details to his former employer, and also all documents showing his use of the contacts, and business obtained from them since he had left. 

However, if the employer had not put a limit on X’s use of such sites (for example, had allowed the employee to use the site for non-work purposes too), or there had not been a specific contract clause protecting confidential information, the decision may have gone the other way. 

What’s important

So it’s important that there are contract terms and/or staff policies that: 

  • Specify which employees are authorised to use networking sites for work purposes.
  • Specify the sites, and the profiles (or accounts) to be used for those purposes.
  • Set restrictions on what those employees can and can’t do and say using those profiles or accounts.
  • Particularly, make it clear that employees are only allowed to post work-related information, and that they are only being allowed to do so for the purposes of their employment – so that they cannot use or disclose that information either when they leave.
  • Above all, make it clear that the information – about customers, suppliers, referral sources – or anything else work-related – posted to such sites is, and remains, the employer’s ‘trade secrets’ and ‘confidential information’, no matter who can see it on the site. 

Confidential information v trade secrets

This leaves my friend with two problems. First, Alan’s employment contract does not specifically stop him from using or disclosing ‘confidential information. So if my friend cannot show the details on the Twitter profile are ‘trade secrets’, he may find they are not protected. 

Worse, it turns out that Alan was, quite innocently, also using the Twitter profile to post personal, non-work items on it too. So, given the court case we looked at earlier, it looks like my friend has two problems … hmm, time for legal advice.

Law Donut

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