Tuesday 17 June 2008

Are Your Social Network Contacts Owned By Your Employer?

I read recently on Peter Gold's Talent Technology Blog and in yesterday's Daily Telegraph that a former employee, Mark Ions, of recruitment firm Hays has been ordered to hand over business contacts built up on his personal page of the social networking site Linked In.

The Telegraph article says, "The decision is one of the first to highlight the tension between businesses encouraging employees to use social networking websites for work but then claiming that the contacts remain confidential information at the end of their employment".

The ramifications of this decision are quite scary. While it is implicitly obvious that if your firm has invested in CRM technology like Salesforce.com or ACT! as a business tool to manage your business contacts and interactions that you regard the contacts and information contained as the company's property and therefore are covered by confidential information clauses in your contract, it is almost certainly not the understanding of most employees that the business contacts they accrue on sites like Linked In are also bound by these contract clauses.

Now there may be special cases at work here. The recruitment industry has particularly taken to sites like Linked In which has revealing profiles of over 23 million people with current job titles, career information and sometimes contact information. It has been a particular gold mine for recruiters to not only find potential candidates for jobs but also to network as widely as possible to a) increase their chances of getting recruitment assignments and b) increase their working database of potential candidates. If you were to look at certain recruiter contacts on Linked In you would quickly realise that their 2500+ connections cannot possibly be anything than their office Rolodex of business contacts.

How will this affect Social Networking in Business?

This is perhaps the most important question. Linked In's official response to the decision was from 'a spokesman' who said that its members should not use the site to publish information that they have no right to disclose, such as insider, proprietary and confidential information. "It is important that customers abide by their current employment contract and ensure that they have the right to use the information provided."

This is a surprisingly uncontroversial statement from a company that thrives on business networking. This is a company that has built up its 'customer' list based on individuals signing up and freely entering their information on a publicly-viewed site knowing full well that their details can be viewed by other members of the site. Further many of the members have listed their interests as seeking new job opportunities. In other words, they could be construed to be 'fair game'. In most instances, sign up is for free. Similarly, the search facilities to find people by job function, keywords, locations, company names are quite sophisticated and lend themselves to recruiters or similar browsing to find juicy contacts for their next sale. Linked In has positioned itself well to cater for both needs, so why the non-committal response to this case that damages freedom of use by the individual?

Linked In has more recently started working with Corporations to look at providing some different services for companies. Advertising for jobs and services is one important area but there is no doubt that Linked In is slowly, having accumulated a vast list of business contacts from around the globe, repositioning itself as an online CRM system of sorts.

In Linked In's attempts to further 'monetise' its member base it is now marketing itself as a Corporate service having grown from a focus on the individual, not worrying who the person worked for. It is a subtle change in focus that justifies the spokesperson's statement perhaps. But perhaps gone are the days of Linked In being a Social Network, it is now very much a Business Network and is in the camp of the employer.

Ramifications

I should mention that I am not a lawyer and so consider this as my personal opinion only and should not be considered a legal opinion.

The clear ramifications are for those who do their prospecting via Linked In as part of their company's business. Recruiters fall slap bang into this category and Hays is the first to make a call on this and test it in law - with a successful outcome. But does this also affect everyone else who uses Linked In or similar networks at least in part for prospecting for business on behalf of their company or themselves in company time?

I think it does and certainly it calls for people to review their strategy in using Linked In at a personal level in order to increase their business network and win more business for their companies. Recruiters should certainly be concerned about this and seek clarification from their employers. I would suggest that employers should also be more clear on what constitutes confidential information as contract clauses are notoriously woolly and online social/business networking is a relatively new phenomenon which needs some special attention. Sharpen your pencils HR managers.

The interesting aside is how Mr. Ion's solicitors (Jonathan Stokes Solicitors) presented the case on his behalf. From my point of view, I would be concerned about data that is not within the Corporate firewall or VPN and freely available on the internet being considered company confidential, particularly if it has not been paid for.

Rivalry

Linked In has been slow to monetise its membership from a Business-To-Business stand point. There are firms such as Jigsaw who have made a business on exchanging 'business cards' between contacts to build up data lists which can be filtered and then rented for mailing use. There is already plenty of legal thought about this type of service as the act of giving someone your business card or details has an inherent confidentiality associated with it and it does imply that the data is not to be distributed without permission - yet Jigsaw relies on that free distribution.

Linked In seeks the best of both worlds. It wants the data to be freely available and has the consent of its members to make it so, but it also wants to side with employers who encourage its employees to use Linked In to further its business, ultimately because it wants those employers to spend money with Linked In and therefore give some comfort on use of data afterwards.

Should we be scared?

I think so. This precedent has wide ranging implications beyond Linked In, although it is the major business to business network at the moment, others like Plaxo, Xing, Konnects, Viadeo etc fall into similar categories. With the rise of instances of Corporations involving themselves in networks such as Facebook, Flickr, Twitter, Bebo and the rise of the Corporate position of 'Chief Networking Officer' the emphasis on the 'Social' is moving toward the 'Business' in networking.

Then again, to monetise all those juicy names, we knew it always had to. The party may well have been spoilt.

Footnote

Yesterday Linked In by coincidence raised finance of $53m valuing the company at a tad over $1bn. In discussing the implications of the ruling in favour of Hays, a friend pointed out the possible implications for each of us who has a profile on Linked In. We postulated that if Hays claimed some kind of 'possessary' title over the data accrued by the employee, then we wondered if that was made aware to the people who had connected with the Hays employee? Or indeed were any of us by connecting to anybody who solicited a connection, implying that our contact information could be used by a third party (i.e. the person's company) to use the data in whatever way it wished - for instance to be added to the corporate mailing list? Or indeed are we always assuming that we are connecting with an individual who we are think will help us achieve some of our goals like get a new job?

I am not a legal person, but it certainly I have experienced daft emails from recruitment companies advertising inappropriate jobs because of their loose keyword selection. Am I now to assume that when I connect to anyone at Linked In I am implicitly handing over my personal data in Linked In and contact information for use by a third party to do whatever they wish with? Or is there a law that protects me here in the UK or abroad? I know some will leap up and shout 'Data Protection' but the question might arise, where is the data stored in the UK or USA and so where is the governing law? There may be perfectly good answers to these concerns but at a time when Linked In have raised $56m is there a potential that the sheen on the service has been tarnished?

18 comments:

Ben Thomas said...

I read the article yesterday and like yourself Nigel, I was horrified at the implications. The truth is probably a little more prosaic though. Many bosses that I know in the recruitment business are not the most technologically 'savvy', so although the ruling sets a precedent in law, the chances of being pursued are slim for most people. The wider question of whether the judge was right or not is irrelevant, we now have to deal with the facts. Continuing to use Linked In It is really no different to taking a database with you, in that an employer is paying you to resource using various methods. We can't really discriminate between 'owned' databases and ones we access to generate an income during work hours. In the eyes of the law at least, it seems it is all the same. For this reason, the same rules apply with regards to 'non-approach' clauses. If you are foolish enough to leave a recruitment business and re-approach a major client, albeit via Linked In, you should expect the consequences. The watchword here people is 'discretion'. Firstly my advice is don't go for the big client, whatever contact medium you are using, it will bite you in the backside and if you must, don't leave an electonic footprint! Ben Thomas Wilde Pure Search

Pierre said...

Nice, thought-provoking article, Nigel. I must admit it is quite troubling and a teensy bit scary. You mention that users of CRM tools like Salesforce or ACT! are quite rightly aware that the content is owned by the company, but may not be so cognisant when it comes to a social or business networking sites where you publish details about your employer, and may or may not be encouraged to use the resources in work time and from your place of employment. Certainly that's the way I engaged with it - as my employer didn't cover costs for premium services, I just assumed that they were encouraging a new, (free) business development stream, but had no rights to the content thereof should my employment ever be terminated. I guess I was wrong.

But, as Ben points out, those you leave behind aren't always the most technically-savvy, nor necessarily the sharpest pencils in the pot, so what's the worst likely outcome? They get a bunch of LinkedIn connection contacts and their prime-nominated email addresses. They don't know if they're friends, family, prospects, clients, professional contacts, recruiters or random Internet hook-ups. They haven't got phone numbers, mobiles, faxes or street addresses. And if you were really bothered you could email all your contacts to say "beware email cold calls from XYZ Corp".

Regards,

--
Pierre

Julian Bray said...

The short answer as the courts have decreed is Yes ( althouth this might go to Appeal or if Linked-in, the fat-cat founders having made a shed load of money out of all of us decides to take up the legal fight)

IF you build up contacts in paid for work time then it is only fair that your employer reaps some reward. The only answer is to put parting employees on maximum extended gardening leave so their contacts list is eroded and your business has a chance of survival....

Regards Julian Bray MCIPR
Motivational Speaker & company Turnaround Specialist

(Basically unemployable ie Fee earning so my contacts are mine, all MINE!)
Links:
http://eventandroadshowplanners.com

Anne Beitel said...

Scary yes to contemplate the worst case scenario, but not so scary given how unlikely that is. As others have noted, most of the recruitment industry lags in technology adoption. What's more, there are operational steps recruiters using LinkedIn can take to segregate contacts and activity which are clearly their employer's property from their greater network of personal contacts. Quickly copying people who become candidates for roles into their company's own CRM system for example. And (again as others have noted) not poaching your former employers' clients via whatever medium. Recruiters whose employers are paying for their premium memberships should be especially careful this way. At the end of the day, recruitment businesses which embrace social networking will prove more successful, and protect themselves from disintermediation. The fact that Hays had to sue to grab back what they thought was theirs just illustrates that they're among the laggards rather than the leaders in leveraging these powerful technologies.

Anne Beitel
Managing Director
Executives Online for interim management and permanent executive recruitment

Isabelle Page said...

Personally I don't see this as any big step beyond what happens already in the non-virtual world in the UK.

Companies cannot "own" personal relationships, but they can own information about a person, eg their contact details, employment history etc. When an employee develops a relationship with a customer or potential customer as part of that business, then the information obtained about that person is company property. If that information is put into the company's CRM system, then the Company owns the database rights in that system and its data.

When the employee leaves, the Company may have restrictions on what the employee can do in their service contract - these will include returning tangible confidential information belonging to the company and not using intangible confidential information for any other purpose, non-soliciting of customers for business in the ex-employee's new job.

However, the company cannot stop you knowing someone and cannot stop the employee using non-confidential information (eg public contact details for a person). An ex-employee can continue to have a personal relationship with someone they met through their employment, but if they try to solicit business from that person in breach of a non-solicitation covenant, then they can be restrained from doing so.

Without having looked up the judgement for this case, I would imagine that the employer's rights to the LinkedIn information was justified on the basis not that this information is confidential, because it is not confidential (indeed the fact that it is on a free website must be the very empitomy of public domain). Instead, it is likely that the collection of names was deemed to be database that had been compiled by the employee in the course of their employment.

Database rights protect the compilation, rather than the individual pieces of information. So you can have proprietory rights over a compilation of public domain information. The protection provides the owner with some protection for the time and effort in researching and compiling the information.

From that perspective, it would make no difference if an employee compiles the contact database in the company's private CRM system, in a text file on his private laptop or on a website tool like LinkedIn. If he created the compilation in the course of his emplyment, the compilation of contact information belongs to the employer. However, the employer only owns that particular compilation and cannot stop the employee from using any public domain information within that compilation if the employee decides to re-acquire the information and create a new compilation in his own time. So the employee cannot copy or download the compilation to save him from having to re-create it.

This always causes a problem wherea database contains information that has been collated partly in the course of employment and partly pre-existed or was compiled outside work for non-work reasons (eg where an electronic address book (eg MS Outlook) contains personal as well as business contacts. In most cases, it is not a problem to split the information and allow the employee to copy the personal part of the database but not the business part. The only reason why LinkedIn is different from any other situation is the inability to easily split the information to allow the employee to continue using his profile and all his own personal contacts and to allow the employer to retain the compilation of business contacts that he ahs paid the employee to generate for the company's benefit.

See article below on database rights and employee-generated information. May require registration.

Links:
http://www.law-now.com/law-now/2008/breachesofconfidfeb08.htm?&MSHiC=65001&L=10&W=database%20rights+

Rob Saunders said...

I think a company that pays you to generate leads, build relationships and make deals, is entitled to the information you generate whilst working for them.

Naturally, it's not exclusively owned by them...how can it be?..."Step into the ACME Memory Wiper at exit interview"!!

In this case, I don't think this it was a ruling of "data theft", LinkedIn works so well because of the freedom of the information and the company sanctions the use of LinkedIn. However, the employee has to "return details", so that the employer can make sure they have a fair opportunity to utilise this information that was gathered by their employee, and also assure itself that the ex-employee is breaking any restrictive covenants in his employment contract...watch that space!

People and relationships are still fundamental to business, so whether this company can successfully use this information is another question...!

Data Management - in my experience a lot of Sales Managers see this as "Techie" and don't know how to deal with this or have the systems / processes in place to deal with it.

Guess we will see more and more CRM systems integrating with LinkedIn to stop info being lost.

Rob Saunders
Managing Consultant
Genesis IQ
www.linkedin.com/in/robsaunders

Unknown said...

Lesson learned: read & draw your employment contracts with great care.

Unknown said...

Yet another reason to be self-employed.

NotYetDiagnosed said...

NO WAY! I had my Linked In account prior to my working at my current company therefore it and the contacts will go with me (not that I am planning on leaving). I had contacts established from my last company that I have called on now for my new company. This is my account.

As for Salesforce.com and other CRM systems I would say yes, the do belong to the company as the company is the one that purchased the system and you are entering that contact information for company purposes. Most intelligent sales people know that if they want to keep contacts and are planning to leave they need to keep a database of their own but in this type of system, yes the company owns that information.

Great question Nigel :)

executive-i jobs said...

Nigel

Certainly a thought provoking article however I don't think the exponents in this case are a surprise. What I am surprised by is that anyone should be surprised. I think the case of this "middle ranked" consultant is an all-too familiar one whether it’s online or offline.

LinkedIn is a professional network rather than a pure social network and should be treated as such, but I cannot see most recruitment firms looking to use this ruling as a precedent for their future actions as they will discourage current consultants to openly network and future consultants to join them over a company which embraces networking technologies.

Good consultants are good as they are inherently well networked, and will be hired by recruitment firms on that basis.

Consultants must cover themselves as it is not unreasonable for an employer to suggest that contacts gained whilst under their employ, have benefited from the "goodwill" of the company as well as claiming that networking is the major component of their job description.

Most cases are not black and white; there will be many contacts who are not the property of the employer however consultants must consider who is funding their membership and how they have gained those contacts (and for what purpose).

Consultants joining a new firm with their own network should be especially vigilant and recruitment firms should work with their current and future consultants to minimise grey areas and embrace open networking.

To avoid any doubt perhaps a solution could be to set up a couple of profiles; one company profile funded and set up by/ for your employer and one personal/ professional profile funded by yourself. All in all, I agree with Anne that you should take care how you display and integrate your networks.

It cannot be ignored however that this ruling will affect some consultant-recruiter relationships and how openly they work together. This could also affect employees in other industries…

http://www.executive-i.com

Anonymous said...

In California, employers have always owned the fruits of an employee's labor done in the course of his or her employment. For a sales team, the fruits of the sales teams labor are both sales, and a book of leads. For other titles generating business contacts are part of the work done in the course of employment.

Employees, with or without an employment contract, have always had to hand over that "book of leads." It used to be a rolodex or a physical business card case. Then it became electronic books of leads. It's the same thing.

The fact that the information is public or semi-public is sometimes an issue but not always, and it's a separate issue. There is a cost of acquiring the leads, cataloging them, organizing them etc. and if that was was done as a result of the employee's employment those leads belong to the company.

However, it often happens that a small percentage of those leads might become friends, and the employer doesn't own personal relationships -- only, as Tom said, the business information about them.

And often on LInkedIn a person might be here on the company's business of generating leads, but might post a question here about a personal vacation and get some contacts based on that, or might join a special interest group about a hobby. So the question is, and always has been, were the leads generated on company time (which is anytime for a salaried employee) in the course of, and in furtherance of employment.

If you go one step further to read cases where an employee was sued not to GET the rolodex or LinkedIn information, but for using the information the company paid for, this becomes clearer. Often the courts will literally examine all of the contacts that a person "used" to determine if the ex-employee had gone beyond a business relationship with each contact so that the contact now became a personal friend. Or was the ex-employee friends with this contact BEFORE employment?

Friends you keep, business information generated as part of your job belongs to the company. And it's actually more complicated than that - because the there's the balancing between people not having to wipe their minds clean, but also the company's right to confidential information. But this doesn't sound like new law (at least as far as California is concerned) but old law applied to new technology. Nigel mentioned to me in email that indeed it is also old law applied to new technology in the UK too.

I'm not sure that the issue is so much new technology, but the fact that online social networks are being used by way more people than used to attend business networking meetings, and they are blurring social and business communications. And while in-person socializing rarely resulted in organized collections of data - online social networking does.

Nina Yablok - www.bizblawg.com

Tini said...

Hard to offer an opinion based on press reports at second hand with no detail on the judgement or background.
Not going to stop me though ;-)

If the primary e-mail address of the LI account holder is a work address it would seem to be a no brainer. Belongs to the company.

If it's some kinda personalised address or quasi-anonymous like hotmail then you'd have to look at the 'shape' of the account. And the role of the account holder and the activity on the account.

I can't help thinking that it is stunningly easy to track and judge both the kinds of activity and the kinds of contacts made. And if they were made during the period of employment the data would belong to the employer.

As others have said - look carefully at the terms of your contract.

The nice thing about British Law is it reliance on interpretation and I'd be very shocked and upset if this ruling were useable in any detrimental way to most people.

At least I would have before Britain began to turn into an authoritarian fascist state a few years ago...

Unknown said...

There is one little line that appears in virtually every non-disclosure or non-compete agreement that would seem to apply with the case of LinkedIn contacts. The essence of the line is that you cannot hold someone to non-disclose something that is either public knowledge or available to the general public. The LinkedIn website is readily available to anybody that has enough computer savvy to open a browser. I have known people that have been disavowed by LinkedIn and came back the very next day to open a fresh account. Once the account is open the account holder is free to establish any and all contacts that might be made available to him with impunity. In one case a person went from having hundreds of contacts to zero, and in the course of just a few weeks reconnected with hundreds of other LinkedIn members. No employer has the right or resources to enforce or control the associations established in an open public forum.

So, if an employer wants my contacts, my response would be to say, "fine". Bear in mind that unless those contacts are also shared by the person receiving your contact list they are basically useless because for your employer to login using your account, which is the only way your contacts are accessible, they would be violating the LinkedIn TOS. And I would have no problem reporting such a breach of the TOS to LinkedIn.

Of course, your employer could create their own individual account at LinkedIn and try to establish a connection with the contacts that had been in your network, but it would be up to each individual contact to decide on their own whether or not they wanted to establish a connection with the person using your contact information. I hazard to guess that there would be a lot of people less than interested in connecting with someone under those circumstances.

I hope you find this view helpful and useful. By the way, the link below is the LinkedIn TOS. It is amazing the number of people that have never actually taken the time to read the agreement.

Links:
http://www.linkedin.com/static?key=user_agreement&trk=hb_ft_userag

Telemill said...

If your employer is "paying" you to develop that network of individuals and it's closely connected to the job you are receiving income for . . . then YES, it's theirs.

However, if that network (or the basis of that network) was yours BEFORE they hired you or gained during unpaid/off-hours (your time) . . . then NO.

This should serve as a cautionary tale for all those "social networkers" out there. The motto: Be careful of what you do during "the boss's time." The thing you are doing for "fun" or to better your position can be OWNED by your employer because you are doing it "on the clock"

But the BIG lesson here is this . . . it is very imperative that you keep your database of contacts duplicated in a safe place OUTSIDE of "employer's equipment" -- laptops, PDAs, etc. Your contacts, your database, what and who you know is "gold", understand this and treat it that way. Safeguard your efforts (no matter how insignificant they seem right now).

Always keep copies -- in a place only YOU can access.

Charles Fiddes Payne said...

I wasn't going to answer just with repetition of other peoples' excellent answers.

But the new piece of info is ....

The profile of Mark Ions himself with his connections accrued while at Hays is no longer extant. I suspect he destroyed it, he had the physical power to do so. The cliche of possession is nine-tenths of the law will hold sway here in the end. We forget that an unenforceable law will become irrelevant, like the old gambling laws here in the UK, or the prohibition laws in the US. Realpolitik will win: just as nobody is enforcing the laws that Mugabe is breaking in Zimbabwe, so an employee will walk away with his LinkedIn database regardless of legality.

Whereas an employee's access to databases like salesforce and monster is made possible only because those databases are paid for by the employer and accessible by passwords that the employer can revoke, the employee's access to LinkedIn is because the employee has set it up and the employer has no physical way of revoking access.

What would the courts say about the reverse of this case, of an ex-employee suing the ex-employer for denying him access to databases on which he had put personal information?!

Anonymous said...

I am descended from a line of honest but poor sea-cooks and humble instructors of traditional pugilism, and am mindful that I am lucky not to have to perform more manual labor than I must today.

At the present time here in the United States of America, I feel that our doctrine is of "at-will" employment, in that we serve at the pleasure and whim of those who choose to pay us.

Thanks to OSHA, NIOSH, NLRB and the rest of the alphabet, the average employee enjoys some rights.

Those frequent-flyer miles and perquisites of non-exempt employees (such as coffee and smoke breaks) do not seem to me to be representative of any lifetime commitment by the employer to those considered exempt.

We might rationalize that online social networking could help make us more efficient and proficient, but I feel it is not any more incumbent on the employer to have to underwrite that activity as, for example, membership in a professional society or the cost of travel to work.

As a professional, I've worked a fair share of weekends, holidays and off-shift hours without compensatory time or remuneration.

I know many colleagues who sacrifice accrued vacation time and even reimbursable out of pocket expenses they are due, as their paradigmatic internal wiring tells them they are too busy to apply for those benefits.

I think we ought to tread with care; my employer does not pay me to share my opinion nor network when I ought to be doing chemical engineering.

Even if I choose to express my views on my own time, I believe I should be well advised to keep a civil tongue in my head and to consider that those with whom I work enjoy their own rights to visit professional social networks and to harbor opinions which might run contrary to my own.

We are certainly not slaves; I respectfully submit that we belong to societies and to enterprises which operate under sets of explicit and tacit policies, procedures, practices and guidelines.

Part of my alleged value, I think, to my employer is my network; past employers presumably paid me in full for the use of and access to my network.

I've freely turned over my files and contacts to all my previous organizations, which is not to say that I must start over each time I begin a new situation.

Moses and Lincoln freed those slaves from bondage, too. Barring specific non-competition contracts, I feel my network is free to come right along with me.

A rather gratifying example is that an engineering firm with whose principals I've enjoyed an association since before they were an entity declined to bid an ambitious project with my current employer; when they'd heard that I'd accepted the position I presently occupy, they asked permission to come aboard.

I hope at least a little of this might make some sense.

James F said...

I suggest that the crux of the matter concerns the 'bouncing' of the Hays outlook address book against the linked-in or facebook database - if Hays agreed to this (whether explicitly or implicitly) this surely points the information away from being proprietary and privileged, and closer to publically available?

See http://blog.gaapweb.com/

Stevie said...

Here in the US, (or at least Calif) there has just been a ruling that said some emails and im's are private content of the employee.
Probably that could extend to linkedin but that would be a test case.
However, personally speaking, it doesn't apply to me at all.