An employee's social media postings can be incompatible with the duties the employee owes his or her employer.

The Fair Work Commission has upheld an architecture company's decision to dismiss an employee after it was found he had attempted to solicit his employer's clients through the professional networking social media website "LinkedIn" in an effort to expand his own business.

Introduction

The recent decision of Commissioner Deegan in Bradford Pedley v IPMS Pty Ltd T/A peckvonhartel [2013] FWC 4282 illustrates the potential pitfalls of an employee pursuing out-of-work activities that are incompatible with the employee's duties to his or her employer.

Whilst there is much ill-informed hysteria about social media, this decision does serve as a reminder to employees that, in some circumstances, private use of social media can lead to adverse consequences for their employment

Facts

In 2011, Bradford Pedley, the applicant, commenced employment with national architecture and design company peckvonhartel (PVH) in the role of Senior Interior Designer. Prior to taking up the role, however, Mr Pedley informed PVH that he intended to continue carrying out private design work in his own time. PVH did not seek to prevent Mr Pedley from doing so.

Throughout 2012, in addition to performing his full time duties for PVH, Mr Pedley also undertook some private design work through his own business Reveal ID.

Over the 2012 Christmas leave period, Mr Pedley formed the view that PVH had no interest in his career progression and, upon his return from leave, Mr Pedley decided to "take action by putting my aspiration in writing".

On 14 January 2013, Mr Pedley sent a group email to a number of his connections on LinkedIn. In that email, Mr Pedley explained that he has "been running a part time design service called Reveal ID for the past 5 years". After summarising some of the projects Reveal ID had been involved in throughout 2012, Mr Pedley announced "I am now seeking to expand Reveal ID to a full time design practice over 2013".

The email directed readers to Reveal ID's website and social media pages and concluded by stating:

"One of the many benefits of working with a new company are that you get the operators prior big business experience at small business rates! I would be happy to discuss any opportunities, no project too big or small, and look forward to the possibility of working with you in the near future."

That evening, a recipient of the email contacted one of PVH's directors, Mr Marcelo Solar, telling him of the email and asking whether Mr Pedley was still employed by PVH.

The following morning, Mr Solar telephoned Mr Pedley and informed him that he was summarily dismissed as a result of sending the email. Later that day, PVH sent an email to Mr Pedley confirming his dismissal and stating that he had breached clause 2.8 of his employment contract.

Terms of the employment contract

Clause 2.8 of Mr Pedley's employment contract provided that he must not "undertake any appointment or position (including directorship) or work or advise or provide services to, or be engaged, or associated with any business or activity that:

  • results in the business or activity competing with Us;
  • adversely affects us or our reputation; or
  • hinders the performance of your duties."

Mr Pedley's employment contract also required him to "at all times act honestly and in a manner consistent with your employment".

Unfair dismissal application

Mr Pedley filed an unfair dismissal claim with the Fair Work Commission alleging that his dismissal was harsh, unjust or unreasonable.

He argued that PVH knew about and had condoned him working on small private jobs outside work and in his own time. He also argued that the work he performed through Reveal ID was not in competition with PVH, as the projects were of such a small scope that PVH would not have any interest in pursuing them.

Mr Pedley stated that in sending the LinkedIn email, his plan was to pick up small jobs and refer any work to PVH that was too big for him.

With respect to the LinkedIn email, Mr Pedley argued that the email:

  • was not sent to any client of PVH;
  • was sent only to industry professionals with whom he had worked prior to his employment with PVH; and
  • worked in the interests of PVH as he was "actively soliciting new business on their behalf" and "only where appropriate, for myself".

The employer's arguments

Although PVH accepted that it had not placed any restriction on Mr Pedley performing private work outside his employment, it argued that the LinkedIn email constituted a clear attempt on the part of Mr Pedley to solicit business from clients of PVH during the course of his employment for the benefit of his own business.

PVH pointed out that the LinkedIn email was in fact sent to numerous individuals employed by important clients of PVH, including to clients for whom Mr Pedley had performed work . While Mr Pedley accepted that was the case, he argued that the email was sent to those persons as individuals and not in their capacity as representatives of the companies for whom they worked.

PVH submitted that, by its very terms, the email disclosed Mr Pedley's clear intention to make Reveal ID a "full time" operation in the "near future" for which no project was "too big or too small".

PVH submitted that Mr Pedley's conduct was in clear breach of clauses 2.8 and 2.11 of his employment contract, in that it had destroyed the necessary confidence between the applicant and his employer, impeded the faithful performance of his obligations and was a conflict between the applicant’s interests and his duty to his employer.

Findings in relation to the LinkedIn email

Commissioner Deegan rejected Mr Pedley's assertions that he did not believe he had sent the email to current clients of PVH, that the email represented solicitation for only small jobs or that by sending the email he was actively seeking work for PVH, concluding that such assertions were not supported by the evidence.

It was held that:

"[The email] clearly stated that he wished to build to a full-time operation and that his interest was not confined to small jobs that his employer would not take on. The applicant was clearly intending to set up a business that could be in opposition to his employer, albeit in a small way. He was soliciting work from current clients of his employer in clear breach of his obligation to put the interests of his employer before his own interests." [1]

Decision

By sending an email in those terms, Commissioner Deegan found that the applicant had breached his fundamental employment obligations to his employer by deliberately and actively soliciting clients of the respondent for his own business. Commissioner Deegan concluded that such conduct was inconsistent with the continuation of Mr Pedley's contract of employment and amounted to serious misconduct.

Commissioner Deegan relied on the definition of "serious misconduct" contained in the Fair Work Regulations, which defines serious misconduct to include "wilful or deliberate behaviour by an employee that is inconsistent with the continuation of the contract of employment" and "conduct that causes serious and imminent risk to the reputation, viability or profitability of the employer’s business".

It was found that Mr Pedley was a "relatively senior" employee with a reasonable degree of autonomy, and that PVH had trusted him to deal directly with its clients. On that basis, Commissioner Deegan held that Mr Pedley had a duty to promote the PVH’s interests to those clients and not his own.

PVH's argument that Mr Pedley's conduct put him in breach of clauses 2.8 and 2.11 of his employment agreement was accepted, with Commissioner Deegan concluding that the termination was not harsh, unjust or unreasonable. The application was therefore dismissed.

In her reasoning, the commissioner rejected an assertion by Mr Pedley that PVH had waived any right to object to him soliciting private work given that they had permitted him to do so during his employment, finding that PVH's consent was limited to Mr Pedley "performing small private jobs outside his work hours in circumstances which did not conflict with his obligations to the respondent".[2] Commissioner Deegan found that the LinkedIn email "went beyond what the respondent had permitted", stating:

"It is incorrect to suggest that the respondent, by permitting the employee a limited right to perform private work, had waived its right to object to the applicant, whilst employed by it, soliciting its clients to move their business from the respondent to the applicant’s business."[3]

The commissioner found that during employment Mr Pedley "owed an obligation to his employer to faithfully promote his employer’s interests" and, as a result of the employee's conduct, PVH, "with clear justification", had lost confidence that the applicant would promote its interests.[4] On that basis it was held that there was a valid reason to terminate the employment contract.

Commissioner Deegan concluded by noting that:

"While the applicant’s employment agreement may have more clearly articulated the applicant’s obligations in this regard post his employment, it is my view that this was because the existence of the obligation during employment 'goes without saying'."[5]

Implications

Some employees hold the mistaken belief that no matter what they post on social media, it is always a private matter and not that of his or her employer. That will often be the case but, as this case illustrates, there are circumstances where such postings are incompatible with the duties the employee owes his or her employer.

Whilst LinkedIn as a social media platform has, as a general proposition, more benign, less scandal-prone content than counterparts such as Facebook or Twitter, the often inextricable blending of the personal and professional on LinkedIn might mean it turns out to be the platform that most frequently gives rise to issues of this kind.

This article was first published in the Law Society Journal, August 2013.