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20 June 2014

eNewsDKK 100,000 fine for LinkedIn updateEmployment newsletter: Two former employees have been ordered to pay damages of DKK 100,000 to their former employer. Aarhus District Court considered that the employees had acted in breach of their non-competition clauses when they updated their personal LinkedIn profiles.

Aarhus District Court has recently ordered two former employees to each pay their former employer DKK 100,000 by way of contractual penalty. The Aarhus District Court held that the employees had breached their non-competition clauses when they updated their LinkedIn profiles and provided details of their future change of jobs.

The case in briefThe two employees were employed by an energy company. They both resigned from their jobs so that they could work in equivalents roles for a competing energy company after the expiry of the restricted period set out in their non-competition clauses.

In the intervening period, during which the non-competition clauses continued to apply, the two employees updated their LinkedIn profiles by including details of their futurechange of jobs. This included setting out information about their new employer and providing a link to the new employer’s LinkedIn profile.

The employees respectively had 469 and 149 LinkedIn contacts. Their updates stated that they had commended employment with the new employer on 1 July 2012 even though they were only able to commence work as of 1 June 2013 due to the non-competition clauses. LinkedIn does not enable its users to state a future date of employment. One employee was aware that his update was erroneous.

The former employer considered that providing this information was in breach of the non-competition clauses because many of the employees’ LinkedIn contacts were the former employer’s customers who were now able to seethat the employees could, in future, be contacted at a

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If you have any questions or would like further information in relation to this topic, please contact the partners or associates below or your usual Bech-Bruun contact.

Bjarke VejbyPartnerEmployment lawbve@bechbruun.com

competing company.

The Aarhus District Court judgementIn its judgement the Aarhus District Court took into account that personal connections are important in the energy industry and that the two employees had formed closerelationships with a number of people in the European energy industry by means of their work in the energy markets and due to the development and opening of new European markets.

One employee’s LinkedIn profile stated that he had commenced employment with the new employer as of 1 July 2012 and the other on 1 August 2012 even though both employees were unable to commence work for a competitive company before 1 June 2013. This could, however, have something to do with the fact that LinkedIndoes not enable its users to state a future commencement of employment date.

The Aarhus District Court emphasised that the LinkedIn updates amounted to direct communication from the employees targeted at people with whom they had established professional relationships by means of theirwork for their former employer. This course of action was in breach of the non-competition clauses.

Damages of DKK 100,000The employees’ breach of the non-competition clauses was subject to a contractual penalty. Damages were assessed at DKK 100,000 in respect of each employee which was a significant reduction when compared to the maximum amount which was potentially payable. In this connection the Aarhus District Court took into account that the employees had removed their updates when the former employer requested they do so.

Bech-Bruun’s commentThe Aarhus District Court judgement illustrates that a departing employee’s LinkedIn update concerning a future change of jobs with a competitor can be in breach of a non-competition clause.

We question the Aarhus District Court’s overall conclusions. LinkedIn is often used as an easy tool enabling an individual to maintain contact with connections (which havebeen obtained for a variety of reasons) or for the individual to use as a personal means of marketing which is unconnected to the employer.

It cannot be disputed that customers/clients and business partners will inevitably form a large part of an employee’sprofessional contacts and that an employer will consider LinkedIn connections as being a “list of customers” if an employee’s employment is terminated.

On the other hand, there are hardly many employers who –in an employment situation – would mind if a salesman or consultant, for example, were to be able to demonstrate a big professional network through LinkedIn. In overall terms LinkedIn is a social medium which is unilaterally administered by the individual, also as regards the adding of contacts. How far an employer can or should go when it comes to regulating an employee’s use of LinkedIn – byway of example when it comes to “linking in” with an employer’s customers – must be assessed by reference to the individual circumstances. Many companies encourage their employees to make active use of LinkedIn, including

making contact with customers and business partners.

It ought to be permissible to notify contacts of an otherwise wholly legitimate change of jobs via LinkedIn.

There also ought not to be any problem with notifying one’s contacts on LinkedIn about the name of one’s new employer if such notification respects any potential restrictive covenants and if the update does not appear asan advert for the new employer. Similarly, an employer should be allowed to inform the outside world – and its customers – of the commencement date of a new recruit.

It is clearly not acceptable for anyone to state that they have commenced new employment before the agreed commencement date if this is untrue. If the erroneous update is due to an error resulting from the missing function on LinkedIn, the employee should rectify the update as soon as he or she becomes aware of it. The rectification should furthermore be followed up by an update whereby all contacts are made aware of the previously erroneous information which was listed.

The employer has lodged an appeal.

This newsletter is for guidance purposes only an should not be regarded as a substitute for taking legal advice. We recommend that you seekindependent legal advice with respect to particular legal issues. Bech-Bruun accepts no responsibility or liability for any losses incurred in connection with any decision made or action or inaction on the part of any party, in reliance upon any information in this newsletter.