A recruitment company's upcoming NSW Supreme Court case should help clarify the legally ambiguous issue of LinkedIn contact ownership, but in the meantime businesses must take action to protect themselves from similar disputes, says a workplace lawyer.

Employers increasingly encourage staff to connect with existing and prospective clients through LinkedIn, but the absence of a settled body of law means it's difficult for businesses to protect against former employees using those accounts to contact clients or promote a new role with a competing business, according to Chloe Conway, a senior lawyer with Brown Wright Stein.

She told a recent webcast for Shortlist's associate publication, HR Daily, that legal recruitment company Naiman Clarke's case against a former employee, Marianna Tuccia, will soon provide guidance on how Australian courts will treat ownership of LinkedIn contacts gained through the course of employment.

Naiman Clarke alleges that Tuccia took names from the company's candidate database and connected with them via LinkedIn, increasing her contacts from 150 to 500 the month she resigned.

It claims the recruiter then used those connections to make placements while working for a competitor, Yair and Associates, profiting both the rival recruitment company and herself in the process.

"She had a contract of employment which contained a clause which required her to protect the confidential information of Naiman Clarke," said Conway.

"Amongst other remedies, Naiman Clarke is seeking damages for breach of contract and an injunction requiring her to delete all information concerning the candidates from her LinkedIn profile. Ms Tuccia asserts there are no material facts to prove any breach or 'loss' suffered by Naiman Clarke."

The case began as a local court case in 2011, but was soon moved to the NSW Supreme Court, where Conway said it is expected to be heard.

"It will be an important case to watch on ownership of social media in a social media background," she added.

How to protect your business

While awaiting the result of that case, employers can still take steps to minimise the risk of potential damage to their business should a dispute arise, Conway said.

"The best idea would be really to sit down with an employee at the commencement of their employment and look at the LinkedIn account [and] look at the contacts that they've already got on there," she said.

Conway advised employers to insert clear rules, in employment contracts or workplace policies, governing post-employment conduct towards these contacts, such as:

• Define "solicitation" to include "updating employment details on LinkedIn";
• Agree on a list of clients that were the employee's contacts prior to beginning employment;
• Require an employee to delete contacts established during their employment, and not re-connect with those contacts for a certain period of time; and
• Address ownership of social media groups and passwords.

"These things can be negotiated during the course of employment but [it is] a bit more difficult towards the end of it and [it is] better to be upfront and agree on it at the beginning," she added.

Restraints still important

It's also important to keep up traditional contract provisions restraining staff from certain post-employment activities, such as soliciting clients, said Conway.

"The primary legal means by which a business can protect its customer connections and confidential information [from] an employee leaving their business is by imposing express prohibitions upon the use of such information and activities," she said.

Organisations should include these restraints in all employment contracts, regardless of employees' seniority, Conway said.

"You may have an employee that commences employment at a very junior level and works their way up through the ranks, and essentially they go from being a junior accountant to a senior accountant and then they don't want to sign a new contract.

"Unless you have a restraint from when they first started, you may have difficulties later trying to agree on one. My recommendation is that you would always put some form of a restraint in the employment contract; however, you would just make sure it was reasonable in the circumstances, depending on what they were doing at the time," she said.

Conway reminded businesses that whether a restraint is enforceable will depend on the provisions within the clause and the facts of the case.

"One size does not fit all and the common law requires each restraint of trade clause to relate to the legitimate interests of the employer, and go no further than is reasonably necessary to protect the interest," she said.

"The law will balance the interest of the employee, being freedom to work where and with whom they like, with that of the employer, being protection of its business interest."

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