Are LinkedIn Contacts Protectable Trade Secrets?

Many professionals maintain robust social media accounts to raise their public profile and generate business – often at the encouragement of their employers. As just one example, LinkedIn, with its more than 347 million users, proclaims itself as the “World’s Largest Professional Network” and the leader among those social networks aimed at professionals. However, an employee’s LinkedIn contact list can be a valuable asset generated while on the job, from which competitors can gave insider information. Protecting that information is now the subject of a federal court case in Los Angeles, California.

In Cellular Accessories for Less, Inc. v. Trinitas LLC, No. 12-06736 DDP SHX, 2014 WL 4627090, (C.D. Cal., Sept. 16, 2014), Cellular Accessories for Less, Inc. (“Cellular”) sued its former employee and his new employer in California federal court, alleging that they violated various trade secret protections, including by continuing to use the former employee’s LinkedIn contacts and related data developed while he was an employee of Cellular. Cellular argued that the former employee had signed agreements that contained nondisclosure, noncompetition, and confidentiality provisions protecting “proprietary information” and trade secrets of Cellular, including the LinkedIn contacts and related data. The former employee argued that the LinkedIn contacts were not trade secrets, because they could be viewable by the public.

In its opinion, the court stated it could not decide the issue without a trial for two reasons. First, the court needed to know “to what degree the former employee’s LinkedIn contacts were indeed made public”, acknowledging that different LinkedIn users have different privacy settings managing what is “public”. Second, the court needed to know that if the former employee’s contacts were in fact public, “whether it was done with Cellular’s explicit or implicit permission.”

Commentary:

When a business is asked about protecting its proprietary and trade secret information, it often is quick to point to its “blackbook” of existing client/customer and potential leads as information that must be protected. However, businesses should understand that their employees’ LinkedIn profiles often provide the same information to competitors. Just as businesses adapt, the legal system must recognize those changes and allow businesses to protect the electronic age’s version of the blackbook (i.e., social media contact lists). The California federal court’s ruling suggests a business may claim its employees’ LinkedIn contact lists are proprietary information and trade secrets and forbid the use of those lists by a former employee and/or competitor if the employer 1) explicitly forbids its employees from allowing the public to view those LinkedIn contacts and 2) has a strong nondisclosure, noncompetition, and confidentiality agreement with employees.

For information on protecting your business’ proprietary and trade secret information, including client and pricing lists, please contact us.

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