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Employer Law Report

Facebook Posts Not “Solicitation” Under Former Employee’s Restrictive Covenant Agreement

Posted in Business Competition, Workplace Privacy

Describing it as a “rather novel issue,” a federal court recently held that a former employee’s public posts on his personal Facebook page did not constitute solicitation of his former co-workers under the terms of his non-solicitation agreement with his former employer. [See Pre-Paid Legal Services, Inc. v. Cahill, No. 12-CV-346, Doc. 31 (Jan. 22, 2013), Report and Recommendation affirmed and adopted, Doc. 32 (Feb. 12, 2013)] The court further noted that invitations sent to former co-workers to join Twitter were not solicitations under the agreement because the invitations did not request the co-workers to “follow” the former employee, they did not contain any information about the new employer, and they were sent by Twitter instead of as targeted email blasts by the former employee.

Though the court found that the former employee’s social networking activities did not constitute solicitation under his agreement, it did enter a preliminary injunction against the former employee based on his direct solicitation of one of his former co-workers through a private in-person meeting and follow up text messages sent to the co-worker. The court entered the injunction until the issues could be presented to an arbitrator pursuant to the parties’ arbitration agreement.

According to the court, the former employer did not present any evidence showing that the former employee’s Facebook posts, which touted his professional satisfaction with his new employer and his new employer’s products, resulted in the departure of any of his former co-workers, or any evidence showing that the former employee was targeting his former co-workers by posting directly on their walls or through private messages. The court then compared these facts to an Indiana state court case holding that a former employee’s posting of an employment opportunity with his new employer on LinkedIn did not constitute solicitation [Enhanced Network Solutions Group, Inc. v. Hypersonic Technologies Corp., 951 N.E.2d 265 (Ind. Ct. App. 2011)] and a Massachusetts state court case holding that a post announcing a former employee’s employment with a new company on her Facebook page did not constitute solicitation even though the former employee had become Facebook friends with eight of her former clients after leaving her former employer. [See Invidia, LLC v. DiFonzo, 2012 Mass. Super. LEXIS 273 (Mass. Super. Oct. 22, 2012)]

Before the preliminary injunction hearing in Pre-Paid Legal Services, the former employer sought expedited discovery. Among other things, the former employer requested forensic images of the former employee’s “cellular telephone(s), computer, iPad and/or any other electronic devices” used to conduct business, and all “e-mails, Facebook posting[s], Twitter postings or postings on any other social media” concerning his new employer or concerning employment with anyone other than his former employer. The parties apparently agreed to a third-party review of the former employee’s electronic devices, and the court granted the motion for expedited discovery to the extent the parties were conducting limited discovery by agreement. The court also ordered “that all evidence currently in existence be preserved” and reiterated during the preliminary injunction hearing that it “continues to enforce the order directing parties to preserve all the evidence.”

Takeaways

The Pre-Paid Legal Services case has some important takeaways. First, in this era of social media, there is a risk that language used in existing contracts and policies to prohibit certain types of conduct may not adequately protect a business from actions that can be taken through social networking websites. For example, based on the reasoning in Pre-Paid Legal Services, an employee may be able to establish contacts with clients and co-workers through social networking sites and then attempt to circumvent his non-solicitation restrictions after the termination of his employment by communicating information to his former clients and co-workers through public posts on those sites. Accordingly, businesses may need to revise restrictive language they use in contracts and company policies so they can better deal with the risks presented by social networking.

Second, as previously reported in articles about discovery of social media information and e-discovery trends, information posted on social networking websites can be relevant to the parties’ claims and defenses and, therefore, discoverable. This means that parties may have a duty to preserve social media information when litigation arises or is reasonably anticipated and that parties should think about requesting such information depending on the nature of the case. It also means that the law on social media discovery will continue to develop as more parties request social media information and more discovery disputes arise relating to the preservation, relevance, formatting, and production of such information.

Third, by entering a preliminary injunction against the former employee, the court effectively reaffirmed the principle that courts may enter injunctive relief in disputes that are otherwise referable to arbitration on the merits to preserve the status quo and ensure that the arbitration is not rendered “meaningless or a hollow formality.” [See, e.g., Performance Unlimited, Inc. v. Questar Publishers, Inc., 52 F.3d 1373, 1380 (6th Cir. 1995).] Interestingly, the court in Pre-Paid Legal Services entered the preliminary injunction even though the parties had incorporated the American Arbitration Association’s Optional Rules for Emergency Measures of Protection, which provide for the appointment of an emergency arbitrator within one business day of receiving notice of the requested emergency relief. [See Pl.’s Response to Def.’s Motion to Stay Pending Arbitration, Doc. 15 (Aug. 27, 2012)]

Jay Yurkiw