Over the last 5 to 10 years marketing has changed. Many businesses are devoting themselves to developing and promoting themselves via the internet. As part of this effort, employees (often senior ones) are required to manage online blogs, Twitter accounts and their LinkedIn profiles.  Whatever the benefit of these marketing strategies, there are important legal consequences that flow from these approaches to social media with regard to privacy, confidential information and trade secrets.

In the good old days before everything was so publically available, businesses would keep their client lists highly confidential. Indeed, the goodwill of a business arises at least in part from the details contained in those lists.

The proliferation of LinkedIn as a means of professionals “linking up” with clients, suppliers, colleagues, competitors (and even strangers) poses an interesting challenge to our traditional understanding of what is confidential.

In the next section I deal with ownership of LinkedIn accounts and Twitter accounts on termination of employment, but a related issue arises which is worth considering in the context of the ongoing employment relationship.

A recent US case provides a useful example. The Sasqua Group was an executive recruitment firm and maintained a central database of all of its clients, their contacts details, individual profiles, contact hiring preferences and other information. The company alleged that this material was “highly confidential”.

A senior executive left the company and over the following weeks many of Sasqua’s client’s left too.

The Sasqua Group argued that the executive had used confidential client information and its client list to contact customers. The argument most likely developed in this way because the Sasqua Group did not have a confidentiality agreement or non-solicitation agreement in place with its executive and so it could not rely on a breach of contract argument.

However, in that case the Court found that the allegedly secret information was freely available including via LinkedIn, Facebook and other publicly available databases and therefore there was no breach of the confidentiality. As you may know, on LinkedIn an employee may “connect” with a customer and once that occurs, the two parties will be electronically (and very publically) connected. The customer will appear as one of the employee’s contacts.

Importantly, if an employer directly or indirectly allows virtually all of its customer information to be accessible as a result of its employee’s use of LinkedIn accounts, the employer may have genuine difficulty in establishing any right to confidentiality over that customer information and related customer lists.

Again, this area of law is developing but it requires employers to properly weigh up the risks of how they allow their employees to engage with their clients.

Another related issue arises in respect to social media during employment.

Most employers now have workplace surveillance policies which allow them (to a greater or lesser extent) to view and review an employee’s email and internet use. In the context of workplace bullying claims, or on termination of employment, the ability to independently verify the nature and type of communications made by employees may prove invaluable.

However, social media allows employees to “chat” or “connect” or “tweet” with each other and with clients without using traditional email. It is near impossible to monitor these communications even though they often relate to work and arise from the employment relationship.

Below I address steps to be taken in relation to developing a social media policy but it is important to be aware of the minimal control an employer has to monitor various types of social media communications.

To discuss the impact of social media and your business contact Leonie Kyriacou on l.kyriacou@pigott.com.au

This paper and accompanying seminar provide a summary only of the subject matter covered, without the assumption of a duty of care by Pigott Stinson Lawyers. The summary is not intended to be nor should it be relied upon as a substitute for legal or other professional advice. Copyright in this paper and any related seminar is owned by Pigott Stinson Lawyers.