High Court: Action was justified
A legal recruitment consultant was wrong to refuse to disclose his personal LinkedIn password before he left his employer to set up his own business, the High Court has ruled.
Sir Anthony Mann said [1] that, under James Wilson’s employment contract and separate LinkedIn agreement, he was obliged to give the password to the marketing department of Clayton Recruitment, so it could delete his connections.
Mr Wilson relied on the terms of his agreement with LinkedIn, which stated: “As between you and others (including your employer), your account belongs to you.”
However, Sir Anthony said the agreement between Mr Wilson and LinkedIn “does not override” the contractual obligations he was under to his employer and that contract “co-existed, and was fully effective”, alongside the LinkedIn contract.
Sir Anthony made the comments in ruling on the costs of an interim application brought by Clayton to restrain misuse of confidential client and candidate information and to enforce contractual restraints on working for some clients.
The action was compromised at the first hearing, with costs the only outstanding issue.
Mr Wilson argued that Clayton should not be treated as the winner, saying he made a “practical concession” as it was the “economically sensible” thing to do, rather than because he considered that Clayton was correct.
The High Court heard that Mr Wilson left Clayton in March this year and “fulfilled his intention to start his own recruitment agency” by incorporating Wilson Mannion Recruitment.
Sir Anthony said Mr Wilson had about 3,500 business connections in his personal LinkedIn account.
“Some of them were probably purely personal; others (probably most of them) were connections made in the course of his employment. He claims that this was his own account in the sense that he set it up and operated it, and the connections were his, though his company email address was given in his details.”
After he gave in his notice but before he left the company, Mr Wilson refused to delete his LinkedIn connections because he did not regard them as confidential, “or at least they were not items to which he considered the claimant had a confidentiality claim”.
The judge said: “He seems to have regarded them as his own connections on his personal account… He provided a list of the connections to the claimant but did not delete them.”
Sir Anthony said that, when Wilson Mannion was incorporated in April, Mr Wilson shared the news on his LinkedIn account, resulting in “some responses, some of which were from people on the claimant’s CRM database”.
Clayton responded through its solicitor, inviting him to sign undertakings, which were “the equivalent of obligations under the contract”, together with others that “went wider”.
When he refused – saying he had not breached his contract and that giving access to his LinkedIn account would contravene the user agreement – the company started the action.
When it came to costs, the judge said a key question was whether Clayton acted reasonably in bringing the action, concluding that it did.
Sir Anthony said Clayton had “succeeded in establishing some of its clear contractual entitlements as against Mr Wilson, and has established, to a significant degree, that it was justified in seeking interim relief”.
However, there had not been a trial and it was “not at all clear that all the relief sought against Mr Wilson would have been granted”.
He also took into account the policy factor that defendants “should not be discouraged from settling by the prospects of adverse costs orders where there has been no trial”.
He acknowledged that Mr Wilson’s “desire for a ‘quiet life’ is likely to have been a significant driver” in his decision to settle “and the court should not adopt a stance which discourages that as a factor in settlements”.
Sir Anthony awarded Clayton 55% of its costs and ordered Mr Wilson to pay £13,750.