A senior account manager at a professional recruiting firm joins a new agency. He announces the change on LinkedIn, and the congratulations start pouring in – some from clients of his former employer.
Has he breached the restrictive covenants from his previous employment contract? That depends on several factors, but broadly speaking, the answer is no. While employers have a legitimate interest in protecting their contacts and confidential information, it has been held that a communication that does no more than inform a client that an employee has departed is not a solicitation.
The prevalence of mass internet-based communications has put a new twist on an old challenge for businesses when a senior member of staff moves on, with information more widely available and far more portable than in years past.
Added to that is the often-blurred distinction between the personal and the professional. Most businesses have a presence on several social media websites, as do many of their staff, and it’s not uncommon for employees to use their personal accounts to raise not just their own profile but also that of their organisation.
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Conflicts can arise with the use of any social media channel. Beauticians and hairdressers, for example, rely far more heavily on visually-driven platforms such as Instagram when it comes to promoting their business.
LinkedIn, however, is something of a special case as its whole raison d’etre is as a gathering place for the professional community. Everybody’s there to help further their career and, by extension, the fortunes of their organisation.
Jennifer Skeoch, partner in the employment law team at Burness Paull, said the default position when it comes to the ownership of a social media account is that the platform’s terms and conditions apply. Those T&C’s usually specify that the individual is the owner.
However, if someone has been asked by their employer to set up a social media group for the business, and that group is run over the company’s equipment, the balance of the argument shifts. Access to things like log in and administrator details also bears weight.
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As for restrictions post-employment, simply informing one’s network that an individual is moving to another job is not regarded as solicitation: “But if you were then to say ‘DM [direct message] me if you want to find out more’, then that would be going over the line,” Ms Skeoch said.
Caroline Carr, the head of BTO’s employment team in Scotland, said of the three types of post-employment covenants used, she favours the non-dealing clause.
This takes away the difficulties of a pure non-compete clause, which the courts are less inclined to uphold on the grounds that it is too restrictive, and the vagaries of non-solicitation agreements that depend on the former employee stepping out of line. Rather, under the “cleaner” non-dealing option, a departing member of staff is preventing from dealing with former clients, customers or suppliers for a set amount of time, regardless of which party approached the other.
“I think that is the best clause because my clients are the most important thing to me and I want to have a period of say six months to solidify my relationship with them,” she said.
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Ms Carr’s colleague at BTO, commercial dispute partner Lynn Richmond, said employers who prefer non-solicitation covenants need to be prepared to act with speed if they believe anything untoward is afoot. This typically involves the use of an interim interdict to halt any behaviour that might be harming the business, though there is no need to prove any damage has yet taken place.
However, Ms Richmond also cautions that if an interim interdict is subsequently recalled because the court deems it was requested without good cause, the employer could be exposed to a wrongful interdict claim.
All of this applies equally both off and online, but with the increasing amount of business activity taking place over social media channels, a growing number of cases are revolving around the latter. As Ms Carr says, it’s “just a different platform for the same information”.
Ms Skeoch at Burness Paull agrees: “I guess it is clear-cut in some ways in that restrictive covenants have been around for decades, but now we are just looking at them through this different lens.”
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