Last year, in the UK, the case of Whitmar Publications v Gamage brought to light the issue of how companies jumped on the social media bandwagon without being prepared for the contingency of what happens when the employees controlling the social media leave. In Whitmar’s case, three former employees started a rival publishing company, allegedly a violation of the no-compete clause in their employment agreements. The former employees then used their access to and control of Whitmar’s membership in various LinkedIn groups as a means of inviting a large number of individuals to a covert launch event for their new company.
According to Whitmar, the three employees have been taking active steps to compete with Whitmar even before the termination of their employment, using Whitmar’s database of customers, taking business cards that belong to the company, and the use of the company’s LinkedIn groups. Whitmar sought an injunction to stop the former employees from using confidential information that belonged to the company, asking for the employees to turn over access to the LinkedIn accounts.
The former employees argued that the LinkedIn groups were for personal use and just a hobby. But the court disagreed: it sided with Whitmar on the grounds that the LinkedIn accounts in question were group accounts that had Whitmar employees as members, instead of personal accounts. If it were individual personal accounts, Whitmar would have had a more difficult time getting an injunction.
LinkedIn’s own terms state that any information held in a LinkedIn account is property of the account holder. But the court found that LinkedIn Group accounts are something that Whitmar had a proprietary interest in, noting that one of the former employees “was responsible for dealing with the Linked-In groups as part of her employment duties at Whitmar” and that this former employee “used Whitmar’s computers to carry out her work on the Linked-In groups”.
The Whitmar case can serve as a guide on how Australia’s courts will treat similar cases. But even though this may seem encouraging to employers with regard to exercising control over their employee’s personal social media accounts, the UK High Court’s favorable decision hinges on one key thing: that there was very strong evidence of both the former employees’ misconduct and a conscious effort to be secretive about it. One of the employees agreed to turn over the business cards before leaving Whitmar, but allegedly used an app to convert photographs of the cards into LinkedIn contacts before doing so. To add further gravity to his actions, he also sent an email to a contact about identifying a name for a new project while asking “So how do we do that without blowing our cover?”
If the former employees had been smarter about not leaving a document trail, there would have been a compelling argument that, in the absence of a contractual obligation to the contrary, the business cards were their own property, a short-cut for keeping in touch with contacts the identities of which they held as knowledge in their own heads.
I'm seeing an increase in intellectual property clauses in employment contracts that require departing employees to provide a copy of their business cards and a print-out of their LinkedIn contacts to their employer. This decision underscores that social media control and ownership is a live issue.