Can a business stop an ex-employee from listing it as a former employer on LinkedIn?
And yes, this is a serious question.
I think it’s safe to assume that pretty much everyone reading this has a LinkedIn profile. Mine is here. And like me, you probably list all your former employers. That’s half the point right? As well as being a professional networking platform, LinkedIn has also become everyone’s de facto online CV. And no one would question you including all your former employers on your online CV, right? Right??
Well, one company in California has questioned it. [Ed: of course it’s California!] So it’s worth asking, can a business stop an ex-employee from listing it as a former employer on LinkedIn?
Can a business really stop an ex-employee from listing it as a former employer on LinkedIn?
I think most people’s gut reaction to this question would be something along the lines of “Of course not! Are you crazy?”.
And you might be right. But let’s take a step back for a second.
This sort of thing is not necessarily unheard of. (You may need to provide me with a little latitude here, but bear with me.)
The first example that springs to mind is an extreme one: the CIA. Or MI5 or ASIO. Organisations like these would most likely regularly insist that certain former employees not disclose their previous relationship. This makes sense from a national security perspective (and from a self-preservation perspective too). Disclosure of your relationship could also breach the law.
OK, clearly that’s an extreme example. But how about a more commonplace example. Think about third party vendors such as freelancers/independent contractors. They are often asked to sign contracts preventing them from publicising their relationship with an organisation (or at least using their branding) without written consent. This helps organisations protect and control their brand and reputation. And people agree to this sort of non-disclosure agreement all the time without blinking an eyelid.
“But that’s independent contractors”, you might say. OK, consider the following then. Would you be miffed if an ex-employee of yours started using your company’s name and logo in their advertising? A lot of people would say yes.
But there’s a big difference between being miffed and being able to do something about it legally.
So the question is, can you legally prevent an ex-employee from using your name and logo in solicitation materials, and could that extend to references on LinkedIn?
Non-compete clauses and Californian law
Well, this question was first raised in the recent case of Robert Half International, Inc. v. Ainsworth, 2014 WL 7272405 (S.D. Cal. Dec. 17, 2014).
Robert Half International (RHI) is one of the biggest recruitment firms in the US. Last year, it filed an action against six former employees who had resigned and joined a competing firm. The six employees had all signed employment agreements with RHI that included fairly standard post-employment confidentiality and non-solicitation clauses. However, the agreements also included the not-so-standard clause 13, which stated:
“After termination of Employee’s employment with Employer, Employee shall not indicate on any stationary, business card, advertising, solicitation or other business materials that Employee is or was formerly an employee of Employer, any of its divisions, or any of the RHI Companies except in the bona fide submission of resumes and the filling out of applications in the course of seeking employment.”
This clause clearly seeks to prevent former employees from using RHI’s name in solicitation materials unless it is in the course of seeking employment. Since the former employees were now employed elsewhere, one would assume then that their LinkedIn profile was not being used in the course of seeking employment but to make contacts and woo customers, meaning that they may be in breach of the clause. (Arguably a LinkedIn profile by its very nature is always being used in the course of seeking employment given the ever-present possibility of head-hunting on LinkedIn. But let’s put that argument to one side.)
Judge William Q Hayes of the US District Court struck out all of RHI’s claims based on paragraph 13. But he did so on the basis of California’s very strict anti-non-compete regime that essentially voids all non-compete restrictions in employment agreements in California.
However, not every jurisdiction has such strict regimes.
Would clause 13 fly in Australia?
In Australia, these types of clauses operate subject to the common law doctrine of restraint of trade. Under this doctrine, a contractual restraint of trade is presumed to be void unless the restraint is justified, ie reasonable. The test of reasonableness is a two stage test: the courts look to the interests of the parties concerned and then, if required, the interests of the public. In relation to the parties’ interests, the restraint must afford no more than adequate protection to the party in whose favour it is imposed. If the court is satisfied that the restraint confers greater protection than can be justified, the inquiry ceases and it is unnecessary to consider the public interest.
Well, what interests is a clause like clause 13 aimed at protecting? The most obvious answer would be a company’s brand. But clause 13 would likely be seen by a court to be pretty heavy-handed, given the range of options that companies have to protect their brand (more on this below). Instead, a court is more likely to view clause 13 as being directed at preventing competition. If that’s the case, we can’t see any Australian court enforcing clause 13 on this basis alone. The restraint on the former employee (which when read literally appears to prevent any reference to the former employer on LinkedIn) is likely to be considered far too onerous. Australian courts regularly refuse much less-onerous restraint clauses than clause 13, so it would take an extreme CIA-like set of circumstances for a court to be convinced that the enforcement of such a promise is in the parties’ and the public interest.
It should be noted too that the doctrine of restraint of trade also applies to independent contractors. Could it be argued that the typical publicity clauses requiring permission from a company before using that company’s name, are also too onerous? We’re not aware of any consideration of clauses like these in Australia to date. Practically speaking though, no one wants to get on the wrong side of their clients.
So what can employers do to prevent use of their name and logo by former employees?
Well, let’s start with an employer’s logo. Trademark law seems like the obvious place to start. If the ex-employee is simply using the logo to indicate a past connection to the employer then a court is unlikely find that such use is use as a trade mark (that is, a court is unlikely to find that the ex-employee would be using the trade mark as a “badge of origin” for the services the ex-employee is offering). So no dice there.
But hold on. Presumably the employer would own the copyright in its logo. If they do (as they should), then they could rely on that to prevent its use in any solicitation materials by former employees (and their new firms) such as brochures, website bios and other solicitation material.
“Aha!” you say. “Doesn’t a former employer’s logo appear on a former employee’s profile page?”. Well, yes it does. But the former employee would likely argue that the former employer has implicitly given permission for it to appear on all its former employees’ profiles when they uploaded the logo to LinkedIn (knowing full well how LinkedIn works).
How about the use of a former employer’s name alone?
Well, an employer has Buckley’s chance grounding an action in copyright law (business names per se are not copyrightable). Nor would they likely be able to ground a claim in trademark law, assuming the reference is a purely biographical factual reference, which an entry in the experience section of a LinkedIn profile would be.
Of course, it’s a different matter entirely if the former employer does not make it clear that they are no longer affiliated with their former employee eg by failing to update their LinkedIn profile while actively using LinkedIn to woo customers. A court may find copyright infringement in relation to the employer’s logo as the implied permission is unlikely to extend that far. There’s also the real possibility of an action under the Australian Consumer Law and even a passing off claim given the right circumstances.
So, yes there is some protection for employers seeking to prevent former employees from using the company’s name. It’s just unlikely to extend to up-to-date factual references in the experience section of a LinkedIn profile.
Unless you’re in covert ops. Then, all bets are off.
Pro tips for employers: Make sure you include LinkedIn in your exit interviews, requesting departing staff to update their profiles. You may also want to consider including an obligation in your employment agreements requiring employees to update their LinkedIn and other relevant social media profiles within a reasonable period following termination.
Pro tips for employees: Make sure you update your LinkedIn profile when you change jobs! And don’t try to indicate a current affiliation with your former employer where there is none.