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.”

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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.

SUGGESTED NEW YEAR’S RESOLUTIONS ON NON-COMPETES, CONFIDENTIALITY AGREEMENTS, AND SOCIAL MEDIA

It is the beginning of the year.  The time for New Year’s Resolutions.  My little son reminded me on New Year’s Eve for us to make our New Year’s “Revolutions.”  His revolution was to do 40 minutes of guitar practice per day (up from 20 minutes).  He had carefully written it down and happily wadded it into a ball to throw into the fireplace.  As the flame consumed his promise to himself, I complimented him on his lofty ambition. Resolutions are indeed personal intentions of revolutions directed at ourselves.  My son’s malapropism has some relevant meaning.

It got me to thinking about appropriate resolutions for executives.  There are many I could conjure up, but three seemed like an easy number to digest and remember.

Resolution # 1: Look Before You Leap

At this time of new possibilities and opportunities, an executive who is considering moving to another company should carefully scrutinize his non-compete, non-solicitation, and confidentiality agreements he has with his current employer to ascertain whether he would be in violation.  The executive should not try to do this without the assistance of legal counsel.  Employers have gotten more aggressive in seeking enforcement of these agreements as evidenced by the many court cases around the country.

Resolution #2: It’s Not Secret If Everyone Knows Or Employees Don’t Know It’s A Secret

Confidentiality Agreements are meant to protect the proprietary information and trade secrets of a business.  If the executive leadership has not instituted safeguards, controls, and notices of confidentiality for its important business information, then do not expect a court readily to treat it as confidential information.

An employee confidentiality agreement is a good start.  Physical and technological protections of business information along with legal protection of intellectual property through copyrights and patents are a good finish.   Think locked filing cabinets, password protected computer files, documents marked “confidential,” and so forth.  The New Year is a good time to establish protocols for safeguarding trade secrets, etc.

Resolution #3: Know How To Use Social Media But Don’t Lose The Personal Touch

If you are an executive or professional, no matter what your age, you are committing business development and networking malpractice by not understanding and utilizing social media whether it is LinkedIn, Facebook, Twitter, blogs, etc.  Whether you realize it or not, you, your business, or your profession are affected by social media and will continue to be at an accelerated rate.

You don’t have to be a “techy” to join LinkedIn or pen a blog – I am living proof of that.  You must do something or you will be increasingly on the margins of access to information sharing.  After some skepticism, I recently signed up for Twitter and I will let you know how it goes.  Older executives must adapt and be continuous learners.

Despite the rise of social media, it is still not a substitute for meeting with people in the flesh, having conversations on the telephone, and sending thank you notes and condolence cards.  Being there and showing up still counts for a lot.  Younger executives should cultivate old fashion pressing the flesh.

Senior executives and the twenty-something young Turks can learn from each other.  To borrow a phrase from my son, that would be a nice “revolution.”