LinkedIn and Lost?

Potential Effects of Your Employees’ Online Social Networking.

There is no denying that America’s workforce is engrossed in the world of Web-based social networking. Web sites such as Facebook and LinkedIn are now an integral part of daily life- both professionally and personally. The Pew Internet & American Life Project reports that 35 percent of online adults use social networking sites. The number is nearly twice that amount for online teens. LinkedIn’s Web site claims to have over 38 million members in over 200 countries and territories around the world. Employees have harnessed the power of social networking to quickly and easily develop often large professional networks and, as a result, your company’s once closely-guarded customer list may have gone public.

Social networking sites provide your employees an opportunity to develop a professional network simply by publicly connecting with contacts, including your customers. Sites, such as LinkedIn, permit users to form a network of “connections” to develop a web of professionals that can be highly effective for sales and marketing purposes. Despite the undeniable advantages that social networking can provide in the business world, these sites also pose a potential risk to your trade secrets, as well as a way by which your employees may try to avoid their contractual non-solicitation obligations. There are steps you should take now to protect your confidential and proprietary information and to exert a level of control over your employees’ social networking activities.

The very thing that makes social networking so beneficial - the social aspect - also does the damage. Trade secrets derive their value, and are legally protected against misappropriation, because of the fact that they are secret. A company’s customer list may qualify as a trade secret, so long as the company seeking to assert a claim for misappropriation can establish (among other requirements) that it took reasonable steps to protect the secrecy of that information. This is where social networking in the workplace can become a problem.

With LinkedIn, for example, an employee may use confidential customer contact information to send a “LinkedIn” invitation to your customers. If the customer accepts, the employee and your customer are now electronically and publicly “connected,” and your customer will appear on a list of the employee’s contacts (unless the employee elects to “hide” his or her contacts). An arguable result is that those customer contacts may lose their confidential nature and you may lose your ability to argue that the customer information is a trade secret. Another possibility is that your competitors will obtain a “customer roadmap” simply by viewing your employee’s “connection” list.

Also, what happens to those “connections” when your employee is fired or quits? Who owns the connection? Should (and can) you require your employees to “unlink” with your customers at the termination of the employment relationship? What if the employee has contractual non-solicitation obligations? These questions underscore how an employee’s use of a social networking site can lead to problems for you.

So what’s the solution? Well, the solution likely differs depending on where you come out on a risk-benefit analysis of social networking sites. Some employers have imposed a full-scale ban on the use of social networking sites in the workplace. However, as one commentator put it, such a ban may drive your employees to find underground ways to use social networking sites. This solution may also seem impractical when there are so many advantages to using these sites. A better option may be for you to implement realistic policies (and, optimally, contracts) concerning and controlling your employees’ use of social networking sites, in addition to other Web 2.0 outlets (such as blogs, wikis, pod-casts, and the like). Policies and contract provisions should define confidential information and/or trade secrets, and make employees aware of the threats social networking sites pose to the company’s information. They should clearly explain the importance of maintaining the confidentiality of your company’s information and any disciplinary action (and/or potential lawsuit) that would or could result from an employee’s disclosure of trade secrets. They should prohibit certain activities that could put trade secret information in jeopardy, and require certain steps to be taken upon the termination of the employment relationship. For example, with non-solicitation provisions, you could require your employee to disclose his or her social networking contacts, “unlink” from your customers, and prohibit the employee, for a period of time, from “connecting” to your clients for a competitive purpose.

With the explosive growth of social networking sites, now is the time to consider the potential pitfalls associated with employees’ use of social networking sites. You need to take control of your employees’ use of social networking sites and address the potential impact these sites may have on your business. We recommend that you work with legal counsel to ensure that your employment polices and agreements address the risks posed by social networking sites.

If you have questions regarding the article or the potential impact social networking sites may have on your business, you can contact Melanie Harris, Dustin DuBois or Eileen Moore.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice.  The reader must consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.