In May 2013 the District Court of Aarhus ruled that two employees should pay a contractual penalty of DKK 100,000 to their former employer after having updated their LinkedIn-profiles before the expiration of their non-competition clauses. The two employees worked in a Danish energy company, but had both gotten a new job at a competitor.
The District Court of Aarhus found that it was a violation of the non-competition clause to inform their professional network on LinkedIn, which they had gotten through their previous job, about the job change. (Read more about the judgment here).
In December 2014, the judgment was reversed by the Western High Court and the two employees were let off from paying the penalty of DKK 100,000 (approximately € 13,500).
The High Court: No evidence of violation of the non-competition clause
The High Court emphasized the wording of the non-competition clause, which only prohibited “employment and interest” in competitors. Furthermore, the High Court emphasized that personal relationships were of minor importance in the specific industry. In addition to this, the company did not have any internal guidelines to the use of social media. For that reason, it could not be proven that the two employees’ actions were a violation of the non-competition clauses.
On this basis, the High Court did not find that the LinkedIn updates were a direct or indirect employment or interest in a competitor and therefore the updates were not a violation of the non-competition clauses.
The High Court also noted that the two employees had deleted their updates immediately when their former employer informed them about the violation.
iuno’s opinion
Even though the High Court gave judgment in favour of the employees it cannot be ruled out that an update on LinkedIn could be a violation of the non-competition clause. This may be the case if a clause is drafted with a broader wording and includes all commercial contacts or if personal relations with customers and collaborators are of greater importance in the specific industry.
The judgment shows how important it is to have internal guidelines to the use of social media. In cases with no serious violation of the duty of loyalty, the non-competition clause or similar, recent case law shows that the company’s internal guidelines are essential to the outcome of the case.
iuno recommends that companies ensure that they have a clear and unambiguous social media policy in place, which meets the requirements on the area.
[Judgment given by the Western High Court on December 16 2014]