If you're going to retain the right to terminate an employee for anything derogatory he or she says via their personal social network; then ethically and morally, you have to provide equitable compensation for using their network as a recruitment tool. Otherwise you've engaged in a theft of an intellectual property of that employee, not to mention a conflict of interests violation.
Technically, and if I remember previous cases correctly, the e-mail address book of an employee is stored as data on the company's systems and therefore is company data. They have the right to use that contact list; especially as it was created on company time using company assets. If an employee wants to sequester his or her personal or pre-existing contacts from his current employment contacts; he or she should use a 3rd party, web mail application (such as MS Hotmail, or Google GMail); and then make sure to empty the web cache on the computer.
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