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Customer lists have long been held to constitute confidential information that departing employees and consultants must delete upon leaving. Professional social media, however, created a grey area. The connections were personal and publicly available but made whilst working for a business.

As a result, businesses often include an express obligation on consultants and employees to delete social media contacts upon departure. Although it appears that even this may not always be enough to protect the business.

In a recently reported High Court decision in Create Financial Management LLP -v- Lee & Anor [2020] EWHC 2046 (QB), in which Flint Bishop acted for the defendants, the court refused to grant an injunction against former consultants even where there was an express obligation to delete social media contacts.

The judge found that there was no evidence that a failure to delete social media contacts created any advantage of more than a few days, as the contacts were all publicly available and the former consultants could easily reconnect with the contacts in the days after their departure, even if they had deleted those contacts.

Whilst this case was in the context of consultancy arrangements following a multi-million-pound corporate transaction and a failure by the buyers to pay significant sums to the consultants, it has ramifications for employment contracts, consultancy contracts and corporate transactions, all of which often seek to impose restrictions on competition.

Comments from our legal experts

“This was one aspect of a very complex and highly fact-specific injunction case. In other circumstances, the outcome may have been different, but this ruling demonstrates that even express obligations to delete social media contacts may not be upheld by the court if there is no competitive advantage as a result.”

“Businesses that rely heavily on personal relationships should be aware of this ruling, as it potentially weakens the protections they would expect from employment and consultancy agreements containing an obligation to delete social media contacts. Businesses may need to consider some additional protection going forwards to protect their client-base if professional social media is heavily used by their staff.”

The full judgment of the court can be found here.

Please note, the information included in this update is correct at the date of publishing.



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