Social Media Complications in the Enforcement of Non-Solicitation Agreements

Determining whether a former employee has breached a non-solicitation agreement has become a more complicated issue in the social media age. Courts are wrestling with the question of when a former employee’s social media interaction crosses the line into contractually prohibited solicitation.

At the start of employment, many businesses require employees to sign non-solicitation agreements, which restrict the employee from contacting the company’s customers or employees for a set period after the employee leaves the company. The goal of such agreements is to prevent the poaching of customers and/or co-workers by the departing employee, who often is headed to work for a business competitor.

Companies commonly use social media, such as Facebook or LinkedIn to market, advertise and communicate with customers. A company’s employees also frequently will add these same customers to their own personal social media accounts as Facebook "friends" or LinkedIn "connections." A common scenario involves a company’s customers or employees continuing to receive status alerts from the company’s former employee, either in the form of automatic updates, usually regarding their new employment, or more direct communications. While these type of cases are often very fact-specific, courts have held that a key consideration in determining whether a social media post is an improper solicitation is the content and substance of the post, and whether the social media activity is passive or active.

An example of such passive social media activity is found in Bankers Life & Casualty Co. v. American Senior Benefits, LLC, 2017 WL 3393844 (Ill. App. Ct. Aug. 7, 2017). In that case, the court held that a former employee sending invitations to former co-workers to connect via LinkedIn did not constitute solicitation in violation of his non-competition agreement. In ruling against the former employer, the court noted that the invitations to connect were sent through generic e-mails that invited recipients to form professional connections, and that the generic e-mails did not contain any discussion of the former or current employer, did not suggest that recipients view open job positions on the former employee's profile page, and did not solicit recipients to leave their place of employment. The court in Bankers Life & Casualty cited rulings from other jurisdictions as to the difference between permitted "passive, untargeted communications" and prohibited active and direct solicitations.

Another case in which a court found no violation of a non-solicitation agreement, and ruled against the employer is Invidia, LLC v. DiFonzo, 2012 WL 5576406 (Mass. Super. Ct. 2012). In that case, the former employee was a hair stylist, who was under a two year non-solicitation agreement. The former employee had become Facebook friends with at least eight clients of her former employer, and upon leaving her employment with Invidia, a public announcement was posted on her Facebook page announcing her new employment at another hair salon. In ruling that this did not violate her non-solicitation agreement, the court noted:

In the comment section below that post, [Invidia customer] Ms. Kaiser posted a comment which said, "See you tomorrow Maren [DiFonza]. Ms. Kaiser then cancelled her appointment at Invidia for the next day. But it does not constitute "solicitation" of Invidia’s customers to post a notice on Ms. DiFonza’a Facebook page that Ms. DiFonza is joining David Paul Salons. It would be a very different matter if Ms. DiFonza had contacted her that she was moving to David Paul Salons, but there is no evidence of any such contact.

In the Invidia case, it bears mention that the court declined to enforce the non-solicitation agreement based on the purportedly passive social media activity, even though there was evidence that 90 of Invidia’s clients had subsequently canceled or failed to reschedule appointments after the Facebook posting.

In contrast, courts have enforced non-solicitation agreements when confronted with active or aggressive social media activity on the part of the former employee. In Coface Collections North America c. v. Newton, 430 Fed. Appx. 162 (3rd Cir. 2011), the appeals court affirmed an order to enforce a non-solicitation/non-competition agreement where the former employee posted on LinkedIn the date on which his restrictive covenant would expire, encouraged "experienced professionals" to contact him about employment with his new company, and sent Facebook friend requests to a number of his former co-workers, specifically inviting them to view his posted job solicitations.

Employers looking to enforce non-solicitation agreements or other restrictive covenants in the social media age should consider the following:

Many employers are using the same outdated non-solicitation/non-competition agreements they have used for years, which do not reference social media in any manner. Employers should revise and update such agreements to specifically address what types of social media activity will constitute a breach. Courts are more likely to enforce such agreements if the employee was expressly placed on notice.

• A court will require evidence before it issues a temporary restraining order or other injunctive relief against a breaching former employee. However, evidence of a breach of a non-solicitation agreement through social media can be very transitory or can be deleted by a former employee trying to destroy evidence. Any posting by a former employee suspected of violating their agreement should be immediately preserved, either through printed copies of screen shots, or saved digitally.

Another issue companies should be aware of is their own utilization of social media, and more specifically, the employees who have access to these accounts and post content on behalf of the company. In recent years, issues have arisen where a disgruntled departing employee is the only person who knows the passwords and usernames, and essentially locks the company out of its own social media accounts. All such employees should be required to sign agreements to provide access to such account information upon the termination of their employment, and such an agreement could be included in the terms of a non-competition/non-solicitation agreement.

Mark Fijman is licensed to practice in Louisiana and Mississippi, and specializes in the enforcement of non-competition/non-solicitation agreements and trade secret litigation.



UNION LEARNS “DON’T MESS WITH TEXAS” (AND RELATED NLRB FUN)

 

           A Texas janitorial service cleaned up last week when a Texas jury awarded it $5.3 million in damages in the company’s defamation/disparagement/harassment lawsuit against the Service Employees International Union (“SEIU”).  The victory in this groundbreaking case may encourage more employers to go on the offensive and sue over hardball tactics used by unions in union campaigns and contract disputes.

            The facts of the case, which go back more than a decade, read like a John Grisham novel.  In 2005, SEIU sought to unionize janitorial workers in Houston with a “Justice for Janitors” campaign.  All but one of the janitorial companies agreed to accept SEIU as the bargaining representative for their employees.  However, Professional Janitorial Services (“PJS”) declined to do so, insisting, as allowed under the National Labor Relations Act (“NLRA”), that representation be decided by a secret ballot vote of their employees.

            According to the testimony and evidence presented during the four weeks of trial, this kicked off years of dirty tactics by the SEIU.  This included efforts to destroy PJS with an organized campaign of misinformation, specifically designed to cause PJS to lose money and customers.  The evidence, including internal SEIU e-mails, showed that the union intentionally and knowingly made false allegations that PJS was illegally withholding employee’s pay, forcing them to work off the clock, or firing them for engaging in union activity.  The union filed “unfair labor practice” complaints against PJS with the National Labor Relations Board (“NLRB”) and then would withdraw them, causing the company to needlessly incur legal costs.  The evidence also showed that SEIU would send letters to PJS’s customers, making false accusations, and would stage disruptive demonstrations designed to intimidate customers into dropping PJS.  Every time PJS lost a client, someone from the union would send an e-mail claiming credit.

            In an interview with the Houston Chronicle, PJS’s chief executive Brent Southwell stated "The jury found what PJS and its employees have known for more than a decade . . The SEIU is a corrupt organization that is rotten to its core." Obviously worried about the precedent set by PJS’s legal victory, SEIU has announced its plans to appeal the jury verdict.

           In other NLRB news, it appears unions also are learning that the Board’s position on social media applies to them as well.  In recent years, the NLRB has taken the position that employees’ social media postings qualify as protected concerted activity under Section 7 of the NLRA.  Since then, the NLRB has brought action against numerous companies for terminating employees who post disparaging comments about their employer, or in some cases, simply for having overbroad social media policies that might “chill” an employee’s right to engage in concerted activity.

            Despite a very pro-union NLRB, the Board has now ruled against a local union in New York State for retaliating against a member because of his Facebook postings critical of the union and raising accusations of union corruption, including improperly giving a union journeyman’s book to a local candidate for mayor.  According to the Administrative Law Judge Opinion, the union then retaliated against Frank Mantell by finding him guilty of disrupting the operation of the union, fining him $5,000, and suspending his membership for two years.

            Mantell filed an unfair labor practice complaint against the union with the NLRB.  The ALJ in the case ruled against the union, and found that Mantell’s Facebook postings were protected concerted activity:

One could argue that Mantell did not engage in protected activity because the issuance of a journeyman’s book to Mr. Choolokian did not affect him, or even if it did, his Facebook posts only complained about the effect on apprentices.

 

Nevertheless, I find that Mantell’s Facebook posts were protected. First of all, issuing a journeyman’s book to someone allegedly ineligible to receive one, affected Mantell in that one more journeyman would arguably impact his opportunities for employment. Moreover, as Judge Learned Hand pointed out, employees making common cause with fellow employees are engaged in protected activity. Even though the immediate quarrel may not concern them they may be assured that if their “turn ever comes,” they will have the support of those they are then helping.

 

I also reject Respondent Union’s assertion that Mantell forfeited the protection of the Act by maliciously defaming the Union and Business Manager Palladino. Nothing Mantell said in his Facebook posts was maliciously and knowingly untrue. The Union takes issue with the fact that Mantell characterized the Union’s action as giving Choolokian “a gift.” I find that has not been proven to be false despite the fact that Choolokian may have paid for the journeyman’s book. Mantell’s use of the term “gift” can reasonably be interpreted as arguing that Choolokian was not entitled to a journeyman’s book—an assertion that may or may not be true. (citations omitted)

            The ruling may provide some small comfort (or amusement or schadenfreude) to the many companies trying to draft social media policies that will pass NLRB muster.  It seems the NLRB is inclined to take just as expansive an interpretation of Section 7 against the unions as it does against private business.

A MESSAGE TO READERS OF "THE EMPLOYEE WITH THE DRAGON TATTOO" 

 A reader of this blog asked if she could be included on an e-mail list for new posts.  I currently do not have an e-mail service but it seems like an excellent idea and I will be setting it up in the very near future.  If you would like to be included, please send your name, your company, and your e-mail to me at fijmanm@phelps.com

Thanks! 

 

 

 

 

 

 



Employers who Solicit Facebook Friend “Snooping” Could Face Liability Under Federal Stored Communications Act

Facebook postings by employees have increasingly become a factor in employment discrimination lawsuits.  In some of my recent cases, employers were made aware of an employee’s threats of violence, workplace misconduct or other inappropriate actions when a co-worker, who also was a Facebook “friend”, brought the Facebook post to the employer’s attention.  Such posts can be powerful evidence in defending against a discrimination lawsuit and proving that any adverse employment action was for a legitimate non-discriminatory reason.

However, a recent ruling by a federal District Court in New Jersey strongly suggests that employers who actively solicit Facebook friends to disclose the postings of an employee could be in violation of the Federal Stored Communications Act (“SCA”), 18 U.S.C. §§ 2701-11.

The SCA provides that whoever "(1) intentionally accesses without authorization a facility through which an electronic communication service is provided; or (2) intentionally exceeds an authorization to access that facility; and thereby obtains, alters or prevents the authorized access to a wire or electronic communication while in electronic storage in such a system" shall be liable for damages. The statute further provides that "[i]t shall not be unlawful . . . [to] access an electronic communication made through an electronic communication system that is configured so that such electronic communication is readily accessible to the general public." In other words, the SCA covers: (1) electronic communications, (2) that were transmitted via an electronic communication service, (3) that are in electronic storage, and (4) that are not public.

In Ehling v. Monmouth-Ocean Hospital Service Corp. , the plaintiff was a nurse who maintained a Facebook account and had approximately 300 Facebook friends. Plaintiff selected privacy settings for her account that limited access to her Facebook wall to only her Facebook friends. Plaintiff did not add any hospital managers as Facebook friends. However, Plaintiff added many of her coworkers as friends. Unbeknownst to Plaintiff, a hospital paramedic who was one of her Facebook friends was taking screenshots of Plaintiff's Facebook wall and printing them or emailing them to Plaintiff’s manager.

The evidence in the case showed that the paramedic independently came up with the idea to provide Plaintiff's Facebook posts to the manager, who had never asked the paramedic for any information about Plaintiff and had never requested to be apprised of Plaintiff's Facebook activity.

Plaintiff was subsequently temporarily suspended when the hospital learned of her Facebook post where she criticized paramedics in Washington, D.C. for saving the life of a gunman involved in a fatal shooting.  The post read as follows:

 An 88 yr old sociopath white supremacist opened fire in the Wash D.C. Holocaust Museum this morning and killed an innocent guard (leaving children). Other guards opened fire. The 88 yr old was shot. He survived. I blame the DC paramedics. I want to say 2 things to the DC medics. 1. WHAT WERE YOU THINKING? and 2. This was your opportunity to really make a difference! WTF!!!! And to the other guards....go to target practice.

The plaintiff received a memo from the hospital explaining the reason for the suspension was the hospital’s concern that her Facebook comment reflected a "deliberate disregard for patient safety." In response, Plaintiff filed a complaint with the National Labor Relations Board ("NLRB"). After reviewing the evidence, the NLRB found that the hospital did not violate the National Labor Relations Act. The NLRB also found that there was no privacy violation because the post was sent, unsolicited, to hospital management.  The plaintiff subsequently filed suit in federal court, alleging the hospital violated her rights under the SCA.

In its ruling, the District Court held that that non-public Facebook wall posts are covered by the SCA, because: (1) Facebook wall posts are electronic communication, (2) they are transmitted via an electronic communication service, the Facebook wall posts are in electronic storage, and (4) Facebook wall posts that are configured to be private are, by definition, not accessible to the general public, and that the touchstone of the SCA is that it protects private information.

However, the District Court ruled that the hospital was not liable because one of the SCA’s exceptions applied, which exempted conduct authorized (1) by the person or entity providing a wire or electronic communications service; [or] (2) by a user of that service with respect to a communication of or intended for that user." 18 U.S.C. §2701(c).

The Court held that exception applied because the plaintiff had authorized the paramedic to have access to her Facebook wall by making him a “friend” and that the information the paramedic supplied to hospital management was completely unsolicited.

The District Court implicitly held that if the hospital had directed the paramedic or any other of the plaintiff’s Facebook friends to monitor and keep them appraised on Plaintiff’s Facebook activity, it would have constituted a violation of the SCA due to the hospital seeking unauthorized access.  The SCA provides for civil liability under the statute and an employer would be subject to monetary damages.

While it may be tempting for employers to utilize the Internet to monitor employees’ conduct, the lesson from this case is that employers should never request that co-workers or any other individuals access an employee’s private social media.  As related in previous articles, employers also need to be aware that overly broad social media policies could expose them to potential liability under the National Labor Relations Act.

Mark Fijman is a labor and employment attorney with Phelps Dunbar, LLP, which has offices in Louisiana, Mississippi, Florida, Texas, Alabama, North Carolina and London. To view his firm bio, click here.  He can be reached at (601) 360-9716 and by e-mail at fijmanm@phelps.com.