This article was first published on Lexis®PSL IP & IT on 30 July 2013.
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IP & IT analysis: Warren Wayne, a partner in the Employment Group at Bird & Bird, discusses the issues raised in Whitmar Publications and advises that social media policies should stipulate employees must maintain clear lines of separation between their personal social media accounts and their work-related accounts.
Whitmar Publications Ltd v Gamage and other  EWHC 1881 (Ch),  All ER (D) 57 (Jul)
The defendants were employees of the claimant company. In early 2013, they left the claimant and immediately formed another, competing company. The claimant commenced proceedings, seeking to restrain the defendants from using its confidential information. It further sought interim relief. The Chancery Division decided that, since the claimant had a very good chance of succeeding at trial, the relief sought would be granted.
What is the significance of this decision?
This case is a classic example of a 'team move', ie a group of employees conspiring to leave their current employer in an organised way and to set up a competing business together. As well as allegations of breach of implied duties of fidelity by competing with their employer during employment, the former employees were also accused of misappropriating various elements of Whitmar's confidential information including:
- contact databases
- a large number of business cards
- LinkedIn groups.
This case provides an interesting insight into the application of well-established principles to a modern business environment where social media is a part of organised marketing. The judgement touches upon the extent of implied duties, legitimate preparation for future competition, confidential information and the court's power to grant injunctions in the absence of non-compete clauses.
What are the key issues around ownership rights around social media accounts?
In the absence of an express agreement, the starting point is that the account belongs to the person who created it —they have the contractual relationship with the social media site and the passwords.
Even where the social media account is set up in the employee's name, contacts on the employee's network may well be professional as well as personal (although this may be a difficult question in itself).
Generally, the contacts in a LinkedIn network will be private property of the account holder. But in some situations the contact details can be considered the property of the business and former employees can be restrained from using them. Factors will include:
- whether the network was created in the course of employment
- whether the relationships arose through the business or otherwise
- the time taken to develop the network and the number of contacts
- the precise nature of the information contained within the network
In this case, the court made no final decision on this issue. But the fact that LinkedIn groups were set up for the benefit of the employer, and then appropriated by the departing staff, seems to have indicated that the network in the groups should be considered to be the property of the employer.
To what extent is information held on a semi-public (i.e., network/friends limited) social media account private or confidential information?
For information to be confidential and capable of restriction by a company, it must have the necessary 'quality of confidence'. This relates to the value of the information to the company, its accessibility (ie the ease with which it could be independently produced by a third party) and the steps taken to protect it.
This means that information which is readily accessible in the public domain, for example on a company's website, is not confidential but information such as mobile phone numbers and personal email addresses probably is confidential. The case of Hays Specialist Recruitment (Holdings) Limited and another v Ions and another  All ER (D) 216 (Apr) confirmed that contact information did not necessarily lose its confidential nature by being uploaded to LinkedIn.
Mixed personal and private data on an employer's internal systems will all belong to the employer. The same mixture on a public social media platform will not automatically belong to the employer and requires a fact-specific analysis.
What sorts of protections should employers include in their policies regarding access to, and use of, information gained through social media platforms?
Social media policies should make it clear that employees must maintain clear lines of separation between their personal social media accounts and their work-related accounts. Rules applicable to the work-related accounts may include provisions for the transfer of passwords when the employee leaves, although this may contravene the terms of some social media providers and needs to be checked in relation to the specific platforms the business has decided to use. More commonly, policies may require employees to close or ab-andon their work-related accounts when employment terminates.
Where an employee's job includes managing a social media account on behalf of the business, it will be much clearer that the account and the information in it is the property of the company.
Are terms of employment restraining access and re-use of social media information becoming more common?
Yes. Employers must strike a balance between encouraging professional use of social media, which can be very beneficial to a business, and ensuring the content and use of the account falls within acceptable para-meters.
Employees using social media at work pose the following risks (amongst others):
- leaking private or confidential information
- reputational damage to the business where negative content is uploaded
- harassment of third parties (e.g. other employees)
The risks highlighted above may well be breaches of express or implied terms of a general employment contract. They may also fall foul of discrimination and harassment laws. The job of a social media policy is to clearly set out expected standards of behaviour and flag specific risks and potential sanctions to employees.
The biggest challenge in enforcing social media policies is policing them. It is rarely productive to monitor the online content of large numbers of employees. Although security software can go some way towards checking what use is made of the employer's equipment, it cannot deal with content posted by employees from their own devices. When employees are disciplined, employers need to be careful not to overreact and to apply consistent rules as to acceptable conduct.
What should lawyers do next in light of this case?
While the absence of detailed employment contracts was not ultimately damaging to Whitmar's case, because of the strong claim for breach of confidence, lawyers should still promote the use of express terms and policies to address the use of social media, rather than relying on the application of general principles. As highlighted in this case in its discussion of Customer Systems PLC v Ranson  All ER (D) 186 (Jun), the scope of an employee's obligations of fidelity will be determined by his contract.
The recent decision in Smith v Stafford Housing Trust  All ER (D) 201 (Nov) is also helpful in the guidance it gives to employers investigating instances of misconduct via social media.
Warren Wayne is a leading international employment lawyer, known for his handling of complex and sensitive disputes and his commercial guidance. He is also recognised for his work in the technology and financial services sectors. Warren jointly leads the firm's International Trade Secrets Group.
Interviewed by Kate Beaumont for Lexis®PSL IP & IT.
The views expressed by LexisNexis' Legal Analysis interviewees are not necessarily those of the proprietor.