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Quarterly Social Media Update: Courts Apply Common Sense on Whether Social Media Communications Violate Non-Solicitation Agreements

 
by John Marsh 28. March 2013 23:00

Whether a former employee’s use of social media may violate a restrictive covenant remains a special area of concern for many employers.  Two recent cases suggest that courts will treat social media communications no differently than they would any other and will focus on the substance and manner of the communication and evaluate it using the agreement before them. 

In Invidia LLC v Difonzlo, 2012 WL 5576406 (Middlesex [Mass.] County Super. Court, Oct. 22, 2012), a Massachusetts court concluded that a former employee’s announcement on her Facebook page that that she was leaving to join a competitor did not amount to a violation of her non-competition and non-solicitation agreement with her former employer.

The stylist, Maren DiFonzo, worked at the Invidia salon for two years and had signed a non-competition covenant that had two-year and ten-mile restrictions.  When she resigned from Invidia, she immediately began working for a competitor less than two miles away and she posted information about her new position on her Facebook page.  Although Invidia said her departure precipitated an “unprecedented . . . wave of no-shows, cancellations or non responses,” the salon could not demonstrate that she was responsible.

After Invidia’s attorney threatened to sue both DiFonzo and the competitor, she was laid off.  In a conversation with the competitor’s owner, Invidia’s majority owner, Patzleiner, alleged that Invidia simply “intended to send a message” to its employees and “did not care” whether DiFonzo solicited Invidia’s customers.

In rejecting the employer’s request for an injunction, the Superior Court of Middlesex County sidestepped the issue of enforceability of the agreement and instead found that irreparable injury was lacking because Invidia had demonstrated its ability to calculate with reasonable certainty the monetary loss it would sustain for each client DiFonzo took.  The court also found no evidence that DiFonzo breached her confidentiality covenant or solicited any Invidia customers.  The court noted that a few customers had contacted her but “[s]o long as they reached out to [her] and not vice versa, there could be no violation of the non-solicitation provision.” 

In the second, more recent case, Pre-Paid Legal Service, Inc. v. Cahill, Case No. CIV-12-346-JHP (D. Okla., Jan. 21, 2013), an Oklahoma federal court refused to find that a post on a Facebook page amounted to a solicitation (although the court did find evidence of other improper solicitations and enforced the agreement in light of those violations).

Todd Cahill was a top salesman for Pre-Paid Legal.  Prior to leaving and joining Nerium, another multi-level marketing company that sold skin care products, Cahill met with one of his colleagues and solicited him to join him at Nerium.   Cahill then called a meeting of “Elite Leaders” (his team of high performing associates) to tell them he was leaving. Although he did not mention by name the name of his new employer, he told his colleagues that he had lost faith in Pre-Paid Legal and that anyone who was interested should email him.

After that meeting, he left Pre-Paid Legal. There was no evidence that Cahill misappropriated any confidential associate or account information, but he did post information about his new company on several semi-private Pre-Paid Legal Facebook pages (pages Cahill had created to mentor his associates at Pre-Paid Legal). He did not post further to these pages, but he had been posting information about Nerium on his personal Facebook page.

After Pre-Paid Legal sued Cahill for misappropriating its trade secrets and violations of his non-solicitation agreement, the Magistrate assigned to the case found that while Cahill had violated his non-solicitation agreement by approaching his colleagues, he had not solicited them through the use of the Facebook pages.  Relying on the Invidia LLC case above, the Magistrate found that the posts were less explicit in inviting colleagues to join him.

The Takeaway:  These decisions, taken together, are noteworthy because they illustrate that a court will apply the same principles for social media communications that it will apply for other types of communications.  An announcement on a Facebook post that merely informs readers of an employee’s new job is simply not the same as an active solicitation.  Expect more common sense decisions like this one that look at the substance of the communication in question.

Tags:

Non-Compete Enforceability | Non-Solicitation Agreements | Restrictive Covenants | Social Media

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About John Marsh

John Marsh Hahn Law AttorneyI’m a Columbus, Ohio-based attorney with a national legal practice in trade secret, non-compete, and emergency litigation. Thanks for visiting my blog. I invite you to join in the conversations here by leaving a comment or sending me an email at jmarsh@hahnlaw.com.

Disclaimer

The information in this blog is designed to make you aware of issues you might not have previously considered, but it should not be construed as legal advice, nor solely relied upon in making legal decisions. Statements made on this blog are solely those of the author and do not necessarily reflect the views of Hahn Loeser & Parks LLP. This blog material may be considered attorney advertising under certain rules of professional attorney conduct. Regardless, the hiring of a lawyer is an important decision that should not be based solely upon advertisements.

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