13 July 2012 #Employment
The rise of social media as a prevalent tool for conducting business has led to issues such as if an employee leaves, can the employer stop them taking business relationships with them that arose out of the employee’s position in the company?
To a significant degree, employers may be able to deal with this issue by having a social media policy that is explicit in who actually owns the contacts and content that is developed.
However, this issue becomes more important as employees are promoted, and where usually employment contracts and handbooks are not updated accordingly. The employee may have access to highly sensitive confidential information and important customer or client contacts which if disclosed to a third party or used for an ulterior motive may cause the business financial/reputational hardship.
How can you as an employer prevent this?
A recent Court of Appeal case, Ranson v Customer Systems Plc, has highlighted the importance of such things being expressly mentioned in an employment contract.
Mr Ranson during his notice period prepared to set up a competing business by extracting contacts from his company mobile, emailing himself templates for invoices and order confirmation forms and discussing his new business with existing clients. This resulted in an order being placed with his new business two days before he left Customer Systems.
The Court of Appeal held that there was no breach of contract and no fiduciary duties owed. There was nothing in the contract that gave rise to a fiduciary duty (he was not a Director) and there was no duty to inform the employer if the employee was breaching a contract outside of his employment, unless it was expressly detailed in the contract of employment
Ranson has highlighted the importance of employers having tightly drafted contracts of employment and reviewing them regularly as individuals are promoted.
Where employees are not directors the only way to ensure that this information is adequately protected is to impose specific contractual obligations. In particular, it is clear that an employee is under no obligation to disclose their own `wrongdoing` to their employer unless there is an express term in the contract of employment.
If you are worried about your contracts of employment please contact us.