Now “trending” with the Courts are lawsuits addressing the interplay between social media and employee rights. In this rapidly evolving area of the law, cases of first impression are being filed on a regular basis. The issue de jour involves employers suing their former employees—both executive-level employees and lower-level as well—for making seemingly innocuous postings to LinkedIn/Facebook/Twitter announcing new positions. Posting of this nature are ubiquitous today. Yet, employers are filing lawsuits claiming that these activities violate non-compete and non-solicitation agreements entered into by the former-employees. Let’s explore the issues.
Companies commonly require employees—particularly higher placed employees—to sign agreements which prohibit certain post-employment activities, such as (1) soliciting company clients or (2) directly competing with the company. The language often reads something like this:
"Non-solicitation. Employee agrees that for a period of twelve (12) months immediately following the Effective Date of this Agreement, Employee shall not directly or indirectly solicit any of the Company’s clients, accounts or employees."
"Non-compete. For a period of twelve (12) months after the conclusion of Employee’s employment, Employee will not render any services, become employed by, or participate in any business or endeavor that is competitive with the Company’s business or operations."
When an executive leaves a company, he causes the above post-employment provisions to take effect. And when the executive proceeds to update his social media accounts to reflect his new position, we enter the murky waters.
By way of updating his LinkedIn/Facebook/Twitter accounts, the executive indicates to all 24,937 of his connections/friends/followers that his job and location have changed. Hypothetically, let’s say one of the executive’s followers happens to be a customer of the executive’s prior company. That customer reads the social media posting and, since the customer enjoyed working with the executive, voluntarily decides to take its account to the executive’s new place of business. Former company calls legal, and legal advises to sue.
One of the leading uses of social media is undeniably business development and professional networking. Doing so necessarily requires that a user keep his status and online resume current. Yet resolution of the above described issues remains undecided. Thankfully though, some Courts have now issued opinions on this topic. Two known cases—both out of Boston—provide at least some indication as to the direction in which the judiciary may be leaning.
The first case is KNF&T Staffing, Inc. v. Muller (Mass. Sup. Ct., Civil Action No. 13-3676-BLS1), which involves a staffing agency that filed suit against both Charlotte Muller, its former vice president, and Muller’s current employer (i.e., the employer she went to work for after leaving KNF&T). While employed with KNF&T, Muller signed a rather standard employment agreement which contained a non-compete provision. After Muller posted her new job status on LinkedIn, KNF&T filed suit and sought a temporary restraining order against her (as is the employer’s usual tactical approach in these types of matters). However, the Court held that the evidence presented of a breach by Ms. Muller was “somewhere between very weak and non-existent.” The Court continued, stating:
"The same reasoning applies to the evidence that Muller currently has a LinkedIn profile disclosing her current employer, title, and contact information, and counting among her “Skills & Expertise” such things as “Internet Recruiting,” “Temporary Staffing,” “Staffing Services,” and “Recruiting.” There is no more specific mention of any of KNF&T’s “Fields of Placement” than this. So long as Muller has not and does not, prior to April 12, 2014, solicit or accept business in the Fields of Placement for herself or others (including her new employer), she will not have violated the covenant not to compete."
The next case is Invidia, LLC v. DiFonzo (Mass. Sup. Ct., Civil Action No. 2012-3798-H), which, once again, involves a past employer filing suit against a former employee and seeking a temporary restraining order. In this case, the Court offered the following opinion:
"Four days after Ms. DiFonzo resigned from Invidia, David Paul Salons, her new employer, posted a “public announcement” on Ms. DiFonzo’s Facebook page, noting DiFonzo’s new affiliation with David Paul . . . . In the comment section below that post, [a client of Invidia] posted a comment which said, “See you tomorrow Maren [DiFonzo]!” [The client] then canceled her appointment at Invidia for the next day. But it does not constitute “solicitation” of Invidia’s customers to post a notice on Ms. DiFonzo’s Facebook page that Ms. DiFonzo is joining David Paul Salons. It would be a very different matter if Ms. DiFonzo had contacted [the client] to tell her that she was moving to David Paul Salons, but [there] is no evidence of any such contact.
"Invidia next points out that Ms. DiFonzo has become Facebook “friends” with at least eight clients of Invidia. Again, one can be Facebook friends with others without soliciting those friends to change hair salons, and Invidia has presented no evidence of any communications, through Facebook or otherwise, in which Ms. DiFonzo has suggested to these Facebook friends that they should take their business to her chair at David Pail Salons."
In both of the above cases, the former-employers’ attempts to obtain temporary restraining orders were denied based on a failure to demonstrate that the restrictive covenants at issue had actually been violated.
Since this is a new and evolving area of the law—and because both Maryland and Federal Courts are yet to chime in on these issues—it is difficult to draw firm conclusions. Nonetheless, these cases highlight the risk that a non-compete and non-solicitation provision can potentially be violated by one’s online activity. But they also indicate that simply posting status updates may not cause a breach (at least in Boston).
In addressing these issues or any others involving career moves, a competent executive employment lawyer can provide sage advice on effective strategies for avoiding post-separation employment issues and smoothly transitioning to a new position.