Do you really own your address book?

What happens when an employee resigns from a company to either set up on their own or to join a competitor?

Employers must be aware that knowledge and client databases built up by an employee during their employment could potentially be very damaging to their businesses future.

Employees may think they have a right to take with them any contacts built up through the course of their employment this, however, is not the case. The key point is when the relationship between the employee and client started. If it was through the course of their employment, then the employer is most likely actually the owner of the information.

In businesses where information, such as client databases, are the key to their success, employers should protect themselves by ensuring they have a very well drafted contract to prevent employees from using the potentially damaging information should they resign and move to a competitor.

Both employers and employees should carefully consider the extent of restrictions contained within their contracts and the implications of these restrictions. It is very likely that employers will have a contract drafted which prevents employees from competing should they leave the company.

The employer cannot impose unlimited restrictions on an employee as this would be thrown out if challenged through the courts. Restrictions must be considered reasonable and it is common to find a restriction within a contract preventing an employee from competing with their previous employers for three to six months after their departure. Whether the restriction will be regarded as reasonable will largely depend on the nature of the work but there are also many other factors that will need to be considered.

This blog ties in well with Simon Hall's previous post about social networking sites, especially LinkedIn. Despite being able to have a LinkedIn profile whether or not you are currently employed, if an employee has built up their contacts on LinkedIn due to a policy enforced by the employer (therefore, through the course of business), it can be argued that the employee has no right to this information upon their resignation from the company.

If an employee fails to abide by their contract and carries out an action such as contacting clients from their previous firm, there is the option to apply to the court for an injunction to prevent the employee from continuing with this act, thus enforcing the restrictive covenants within their contract.

The employment group at B P Collins can advise individuals as to the extent and implications of such restrictions within their contracts and can also assist employers in drafting a water tight contract. In the event that ex employees still attempt to use the information gathered in the course of business prior to resigning, our team can also advise in relation to injunction proceedings.

Posted by Gemma Hunter, trainee in the Employment law practice group.



Gemma started her training contract with the firm in October 2011 having studied Law and Criminolgy LLB at the University of Sheffield and the LPC at the College of Law, Bloomsbury.

Whose social network is it anyway?

Social media has changed the world we live in.  It's not just the daily scandal about what some premiership footballer said on Twitter.  Social media has changed business too. In one of the most hyped IPOs (Initial Public Offering) in years, Facebook went public. Investors went mad. Suddenly though, Facebook was worth half what it was a year ago (poor old Mark Zuckerberg, eh?).

Social media is changing the society we live in too.  If you believe some people (my Grandad), then Facebook / Twitter / Blackberry Messenger (they're all the same, aren't they?) actually caused the riots in the UK last year.  It's the pinnacle of the downfall of society!  The fall of Rome!  Why doesn't anyone write a letter anymore?

The debates are endless and the issues virtually limitless.  I just want to focus on one small area and that is how social media can affect an employment contract.

For example, many employees have a LinkedIn profile.  Some even use it.  A minority might even use it as they're supposed to. They establish connections and a network of contacts for the benefit of the employer's business.  Great?

There is, however, a problem.  What happens when the employee leaves?  What happens to all those great connections and the network of contacts?  Many businesses (some say all) are based on those personal relationships and connections.  It used to be just weirdos who contacted strangers online.  For many business professionals it's now a part of everyday life.

But is there not some inherent value in those personal relationships?  If an employee has been using LinkedIn as part of their job, in the course of employment for the purpose of furthering their employer's business, who "owns" those connections?  Who "owns" the social network (see what I did there)?

Social networks have a value to any business that uses them.  For employers, one way of protecting that value is through a properly drafted employment contract which addresses social media.  There's no point ignoring it, after all.

Posted by Simon Hall, trainee in the employment law practice.



Simon started his training contract in January 2012 and his experience includes working on shareholder and director disputes, contractual disputes, personal insolvency and consumer claims.