Employment in the internet age

The increaseS in communication and interaction due to the advent of new technologies has been hugely advantageous to the business world. For employers there have been significant benefits, particularly where allowing employees to be mobile and contactable is concerned. Employees have also seen increased flexibility brought about by new home-working opportunities enabled by faster internet and networking capabilities.

However, as I outlined in my previous article (SJ 152/42, 4 November 2008), electronic means of communication are not an unqualified positive in the workplace. The relative informality of many newer forms of interaction, such as email, instant messaging, SMS text and blogging can induce a relaxed approach which is sometimes at odds with the requirements of professional employment. The last article addressed some of the difficulties that this 'clash of cultures' has caused employers in their relationship with employees, and suggested some sensible steps that an employer might take to prevent or ease these difficulties.

This article focuses on other areas in which employers may find themselves facing unexpected difficulty as a result of 'virtual' activity on the part of their employees. First it highlights potential problems regarding liability of an employer to third parties for acts and omissions of an employee carried out 'online'. Secondly it addresses the question of post-termination restrictive covenants and duty of confidentiality and the impact that newer forms of communication have made in this arena.

Will I be liable for what my employees say to each other online?

An employer can be liable to his employee in respect of torts, including defamation and statutory torts such as discrimination, where the acts and omissions were carried out by another employee or agent in the course of his employment (for example Sex Discrimination Act 1975 s.41, Race Relations Act 1976 s.32 and the case Majrowski v Guy's and Thomas' NHS Trust [2007] AC 224).

In circumstances where the wrongdoing is perpetrated in the workplace or in the course of work activities, it is clear that an employer will generally be liable to his employee in respect of a colleague's wrongdoing. In the case of the statutory discrimination torts there is a limited defence offered to employers that 'such steps as are reasonably practicable' had been taken either to prevent the culpable behaviour taking place or to prevent it occurring within the scope of the employment. In practice this defence is of limited assistance. For example, a written harassment policy is unlikely to avail an employer whose male employees have been routinely accessing pornographic internet material in the presence of female staff members (See Moonsar v Fiveways Express Transport [2005] IRLR 9).

But what about the situation where, for example, an employee has used a mobile phone, PDA or laptop, owned by his employer and provided for his use at work, to sexually harass a colleague outside of working hours? Even in this situation it may still be difficult for the employer to avoid a claim being brought pursuant to the SDA 1975 against the employer.

Recent decisions on the question of vicarious liability and whether an act or omission falls within 'the course of employment' have tended to favour victims and a wide definition. For example in Bernard v AG of Jamaica [2004] UKPC 47 the Privy Council held that the important factor is whether there is a 'connection' between the nature of the employment and the particular act, but also that an employer who 'creates risk' by permitting activity to take place while an employee is off-duty can generally expect to face the consequences. In Bernard the situation was rather more stark, as the created risk was that of allowing off-duty police officers to carry guns, but even where an employer has a written policy requiring employees to use its equipment in relation to work, if such items are physically in the possession of employees it may be difficult to argue that such steps as were reasonably practicable (for example pursuant to SDA 1975 s.41(3)) have been taken to prevent such unlawful activity. This could even arguably extend to situations where colleagues become 'friends' on a social networking site available through an employer's internet connection at work, but one employee subjects another to discriminatory treatment or harasses them.

Whereas often part of the solution is a written policy providing guidance and addressing expected behaviour and standards, the presence of a policy regulating an employee's expected conduct could, in certain circumstances, apparently work to the employer's disadvantage.

In Gravil v Carroll [2008] ICR 1222, a rugby club was held vicariously liable for a punch thrown by its employee professional player in a melee which took place after the whistle had been blown to halt play during the course of a match. The Court of Appeal relied on the fact that there was an express rule to players forbidding violent conduct during matches in support of its conclusion that such conduct was a risk that was reasonably incidental to the player's employment as a rugby professional.

Where the issue is of liability to a third party who is not a co-worker of the tortfeasor, there could be broader scope for arguing that an employer should not be vicariously liable. The principles identified by Lindsay P giving the minority judgment of the EAT in Moores v Bude-Stratton Town Council [2001] ICR 271 are likely to be relevant in the assessment. For example whether the employee is remunerated for the activity in question and whether the employer potentially would gain a benefit from the conduct '“ for example if it involved client or customer contact. It is much more likely that an employer would ultimately be held accountable.

Post-termination covenants

Another field in which the advent of the internet has posed new challenges is the protection of legitimate business interests once an employment contract is terminated. Employers should review their post-termination contractual covenants to bring them in line with the internet age.

Gone are the days in which an employee would simply print out a customer list or even copy it out. Where large quantities of information can be stored on memory sticks or sent by email it is important that an employer has clearly identified within networks any information which it considers confidential to its business.

As the case of Hays Specialist Recruitment v Ions [2008] EWHC 745 illustrates, professional and social networking sites can lead to de facto accumulation by an employee of a customer list and other sensitive commercial information which would give him a potential competitive advantage upon leaving employment. In the Hays case itself, the employee during the course of his employment had joined professional networking site 'LinkedIn' and uploaded the employer's customer contacts into his own personal network.

This was not software provided to him by his employer or directly for use at work although it was clearly to his advantage in performing his employment obligations. Using these contacts it was alleged that he was able to obtain a competitive advantage against his former employer following the termination of his employment because he was able to contact the relevant individuals through the site and approach them as regards his new business.

To obtain an injunction in such circumstances an employer would need to show a reasonably arguable case that the information was placed on such a site in breach of confidence or a contractual obligation. It is obviously difficult for an employer to assert that contact information acquired by an employee in the course of his employment is of itself confidential. Indeed it may be difficult to demonstrate that most or all of the information was in fact obtained in the course of employment. But once it is uploaded onto a networking site unless the information is adequately identified in a policy or contract of employment as being confidential, it is highly unlikely that the employer can realistically assert breach of confidence in respect of its later use.

The need to consider access and restrictions

The internet, mobile and email technologies bring many benefits to employers and employees alike. However, information is now being shared in new and imaginative ways through blogs and social networking sites.

To manage effectively the different risks posed by the increased accessibility to information which often in writing and easily stored, copied and published, employers should be encouraged to consider carefully which tools their employees really need in order to be able to perform their work.

Proper consideration needs to be given to restraining employees' access to certain sites or applications in the interests of protecting the employer from inadvertent mistake, or deliberate abuse of such communication tools by the employee both during and following the employment contract.