Social media and the availability of information on the web is beginning to have a significant impact on the validity of restrictive covenants in employment contracts.
In recent years, disputes about ownership of contact lists and electronic business information have increased, as employers recognise the value of data and information. Likewise exiting employees want to benefit from using this type of information when they join a new employer. With the growing use of social media to interact with contacts, who owns contact details and whether they are confidential information has become a thorny question.
A recent case East England Schools CIC (trading as 4myschools) v Palmer and another , considered the reasonableness of a recruitment consultant's restrictive covenants and whether her former employer had a legitimate interest to protect contacts.
Ms Palmer was a recruitment consultant in the East England Schools CIC, which specialized in matching teachers with various schools in the Essex area. Her contract contained a six-month restriction after termination of her employment, preventing her from soliciting or dealing with candidates or schools with whom she had worked in the 12 months prior to termination. In March 2013, she left her former employer and the following day she joined Sugarman Education, a competitor recruiting company. Subsequently, her former employer formed the view that Ms Palmer was acting in breach of her restrictions, by using their contact details.
Ms Palmer argued contacts and information acquired during her previous employment were not confidential as they were easily found on websites such as LinkedIn, CV Library and other public domains. The High Court disagreed deciding that when she moved to a competing recruiting company and used the information, she was using valuable information that was not in the public domain.
The law is clear that general contact details available on for example websites, cannot constitute confidential information. However information, such as in this case which contained information on contacts` likes, dislikes and special requirements, obtained during the employment was a different matter.
Even if a large amount of information is in the public domain, an individual employee`s knowledge of people and personalities may still be a protective commodity which can be deemed to be owned by an employer. It`s important therefore that employers consider whether their contacts contain the necessary restrictions to protect their contact information.
Pam Loch, Managing Partner of niche employment law practice, Loch Associates Employment Lawyers and Managing Director of HR Advise Me Limited.