Are LinkedIn Contacts Trade Secrets?

A judge “across the pond” ruled that an employee’s LinkedIn contacts were, in essence, trade secrets of his former employer where those contacts were created during the term of employment and mimicked the employer’s confidential and proprietary business contacts. This raises quite a few legal issues for employers and employees. In fact, I wrote a post a few months ago that “beat around the bush” on this issue but did not directly address this situation: LinkedIn: think before you sync! Go check it out and then read on …

This scenario comes from a story in The Telegraph entitled Court orders ex-employee to hand over LinkedIn contacts and is very interesting to me. I want to thank my friend Deb McAlister for bringing this to my attention, and suggest that you follow her on Twitter (@debmcalister) as she puts out some great content on her Distributed Marketing Blog.

Ok, on to the story …

Mark Ions was an employee of Hays Specialist Recruitment and had his own personal LinkedIn profile that he was encouraged to use by Hays. While employed by Hays, Ions made many “new” LinkedIn contacts with people who, presumably, he learned of through Hays’ confidential and proprietary list of business contacts. Ions then set up his own competing business, Exclusive Human Resources, which he set up before resigning from Hays Specialist Recruitment and began using the LinkedIn contacts (derived from Hays’ business contacts list) to compete with Hays. Hays sued and asked the court to force Ions to hand over those LinkedIn contacts.

The court did exactly that and ordered Ions to disclose his LinkedIn contacts and all messages sent or received through LinkedIn.

This situation is very interesting and raises far more legal issues than I can address in this blog post. And, first and foremost, I must disclose that I know very little about the laws of England and beyond what I learned in reading Blackstone’s Commentaries! However, looking at this fact scenario through the lens of generally accepted principles of law in the United States, there are a few important points that I think need to be considered:

  1. The LinkedIn profile was not a company profile, but a private profile;
  2. Generally, once someone becomes a “connection” on LinkedIn, that contact becomes publically accessible and should not be considered a “trade secret” (for an explanation of why see LinkedIn: think before you sync!); and
  3. In the area of trade secret law it is generally accepted that when something that is a trade secret is misappropriated, the fact that it would have eventually become publically known, or does become publically known, is not a defense to the misappropriation;

So, how would I explain this decision?

The most rational explanation, to me, is that the court viewed Mr. Ions as having taken Hays’ confidential and proprietary information, which information was not publically known, and then systematically made it public by adding those business list contacts to his public LinkedIn profile. Then, Ions tried to defend his misappropriation by saying

“but judge, this is public information so it can’t be a trade secret!”

The judge, however, apparently saw through this ruse and said

“I do not care, your unclean hands in making this information publicly known cannot now serve as your defense!”

This is my best guess while shooting from the hip on this one. Deb, I am not aware of any analogous cases in the United States but there could very well be some out there addressing this issue — my hope is that if anyone is reading this and those of such cases they will let us all know in the comments. And, as I said earlier, this raises a boatload of legal issues that could be the subject of a thoroughly analyzed law review article – but instead of doing that, how about we just have the discussion in the comment section below?

What do YOU think? Tell us!

2 thoughts on “Are LinkedIn Contacts Trade Secrets?

  1. I have a blog acquaintance over in England, though he is from Germany and knows mostly German law. I’ll run this past him, but as to my two cents’ worth, the biggest problem I have is that Mr. Ions set up his company BEFORE leaving Hayes. If he had quit, or even given notice to, Hayes, and THEN set up his company, I could make something of an argument that his LinkedIn list is the same as an old-fashioned contact list familiar to any salesman or headhunter, and is not necessarily proprietary information as most industries are rather nepotistic in that “everybody knows everybody”, and headhunting folks on Hayes’ list wouldn’t be “poaching”. Mind you, I am neither a lawyer nor a recruiter, so this is an amateur’s opinion.
    I’ll try to raise my lawyer/blog friend, and see what he has to add.
    Great story! Interesting from my viewpoint as a consultant for some years, and thus often the target of the “headhunters”.

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