LINKEDIN AND NON-COMPETE AND NON-SOLICITATION AGREEMENTS

By G. A. Finch

Another lawsuit has resulted from LinkedIn communications bumping up against employment restrictive covenants.  The National Law Journal reported on a recent case out of a Massachusetts Superior Court (KNF&T, Inc. v.  Charlotte Muller, et al., C.A. No. 13-3676) where an employer sued its former employee for violating a confidentiality and non-competition agreement.  In its complaint, the employer zeroed in on LinkedIn and alleged:

“Most recently, Muller has updated her profile on LinkedIn to announce her employment as Regional Vice President of Panther Global Group, resulting in notification to all of Muller’s 500+ LinkedIn contacts she established during, and which were related to, her employment at KNF&T.  To the extent this notification has been sent to current KNF&T clients, this notification constitutes a solicitation of business in direct violation of her non-competition agreement.  A printout of Muller’s recently up-dated LinkedIn profile is attached as Exhibit F.”

Mass Case Photo20131106_154847

The Massachusetts Superior Court denied a preliminary injunction and held that defendant Muller was not soliciting business for the same kind of workers covered by the field of workers of her previous employer, KNF&T.  The Court suggested that a general description of one’s new job in a profile update without active solicitation or accepting business in the exact recruiting categories prohibited by the former employer was not a violation.

This is similar to a U.S. District Court case (TEKsystems, Inc. v.  Brelyn Hammernick, et al.  ) that I blogged about in 2010.  In that case, a former employer alleged Defendant violated the non-solicitation and non-compete provisions by soliciting Plaintiff’s contract employees and clients within the restricted geographic area covered by the employment agreement in using such electronic networking systems as LinkedIn.

Whether a LinkedIn update or message communication to one’s contacts will constitute a breach of non-solicitation and non-compete provisions will be driven by the facts of the particular case.  Bad facts can land a former employee or her or his new employer in hot water.

The medium of communication, whether it is by telephone, email, mail, fax, or social media, does not change the substance of improper communication that may violate non-solicitation, confidentiality, and non-compete provisions.

As I have admonished in my earlier post:  If you already have pre-existing relationships with employees, customers, clients, potential customers and potential clients, then be sure to list those in a carve-out provision before you sign non-solicitation, non-compete and confidentiality agreements; there may be overlap between your existing contacts and your prospective employer’s contacts and you don’t want to be precluded from utilizing them post-employment.Blog LinikedIn Muller Photo20131106_161614

In turn, employers should remind departing employees that their social media may not be used as an end-run around any restrictions contained in confidentiality, non-solicitation, and non-compete agreements.

Finally, social media is still a mostly uncharted world of communication that must be approached prudently.  One must be conscious of the social, legal, and business impacts of whatever messages and images one is putting on the internet.

Copyright © 2013 by G. A. Finch, All rights reserved.

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