Category: Social Media

‘Salesy’ LinkedIn Posts Can Violate Ex-Employee’s Noncompete – Minn. Federal Court

In July 2017, a Federal court in Minnesota grappled with the in-vogue issue of whether a former employee violates post-employment nonsolicitation provisions by asking her network for business on LinkedIn.

The warring factions in Mobile Mini v. Vevea, (see here) are direct competitors in the portable storage business.  Plaintiff sued when the defendant, a former sales representative for plaintiff, went to work for a competitor in violation of noncompete requirements in her employment agreement.  After the defendant posted on LinkedIn where she was working and requested viewers to call her for quote, the Plaintiff sued.

Partially granting the request for an injunction, the Court examined the pleading and proof elements for injunctive relief and whether a social media post can support a nonsolicitation violation.

Rule 65 of the Federal Rules of Civil Procedure governs preliminary injunctions.  The moving party must establish: (1) the likelihood of the moving party’s success on the merits; (2) the threat of irreparable harm to the moving party; (3) the state of balance between the alleged irreparable harm and the harm that granting the injunction would inflict on the other party; and (4) how the public interest is impacted if an injunction does/doesn’t issue.  The critical question on a request for an injunction is whether a Court should “intervene to preserve the status quo” until it determines the merits of the case.

Likelihood of Success on the Merits

The Court found plaintiff’s prospects for winning on the merits were strong.  To prevail on a non-compete claim in Delaware (Delaware law governed the parties’ agreement), a plaintiff must prove (1) the existence of a valid, enforceable contract; (2) breach of a contractual obligation by the defendant; and (3) damages.

A Delaware non-compete agreement is valid if it its duration and geographic reach are reasonably limited and the non-compete’s purpose and effect is to protect a legitimate employer interest. The Court found the subject agreement met these requirements

Next, the court turned to defendant’s LinkedIn activity and whether that amounted to a breach of the employment agreement.  The Court found the plaintiff breached the contract by making “two blatant sales pitches” for her new employer before the noncompete lapsed.

The court viewed the defendant’s solicitations as going further than simple status updates.  It held that had defendant simply posted her new position and contact information, it likely wouldn’t have run afoul of the defendant’s employment contract. For support, the Court pointed to an Ohio Federal court and a Mass. state court which held that a defendant’s social media postings did not rise to the level of an actionable noncompete claim. See Arthur J. Gallagher & Co. v. Anthony, 2016 WL 4523104, at *15 (N.D. Ohio 2016) (press release posted on LinkedIn and Twitter announcing that an employer had hired a new employee was not a solicitation); Invidia, LLC v. DiFonzo, 2012 WL 5576406, at *5 (Mass. Super. Ct. 2012) (hair stylist’s Facebook post announcing new job not a solicitation).

Since the defendant’s purpose in her LinkedIn postings was to entice business from her network and not simply announce a job change, the Court held that defendant likely violated the the employment contract.

Other Injunctive Relief Factors

The Court then found the plaintiff satisfied the irreparable harm element.  It noted defendant’s past and threatened future noncompete violations and that they could imperil plaintiff’s future customers, goodwill and reputation.

On the noncompete’s start date (the plaintiff wanted the court to reset the time to the date of the court’s order on the plaintiff’s preliminary injunction motion – several months after suit was filed), the court sided with the defendant.  The Court agreed that restarting the clock would give the plaintiff a windfall and impede defendant’s ability to earn a living.

Take-aways:

This case is instructive on how the line between digital self-promotion and blatant sales pitches can blur.  One of the case’s chief lessons is that while noncompetes are not favored,  social media posts can still violate post-employment restrictions.  Those who sign noncompetes should be careful whether their post-employment LinkedIn posts can objectively be viewed as a sales pitch.

 

 

LinkedIn Connection Requests Don’t Violate Insurance Salesman’s Noncompete – IL Court

The First District recently considered whether an insurance salesman’s generic LinkedIn invites to some former co-workers violated non-compete provisions in his employment contract.

The plaintiff in Bankers Life v. American Senior Benefits employed the defendant for over a decade as a sales manager.  During his employment, plaintiff signed an employment agreement that contained a 24-month noncompete term that covered a specific geographic area (Rhode Island).  Plaintiff sued when it learned the defendant sent some LinkedIn connection requests to some former colleagues.

The court granted the defendant’s summary judgment motion on the basis that the plaintiff failed to offer any evidence that the defendant breached the noncompete by trying to induce three of plaintiff’s employees to join defendant’s new agency.  Plaintiff appealed.

Plaintiff argued that the LinkedIn requests were veiled, if not blatant, attempts to circumvent the noncompete by inviting former co-workers to join a competitor.

The First District affirmed summary judgment for the defendant.  For support, it looked to cases in other jurisdictions that considered if social media overtures can violate employee restrictive covenants.  The Court noted that a majority of these cases hold that passive social media postings (LinkedIn and Facebook, mainly) don’t go far enough to violate a noncompete.

The cases that have found that social media breached noncompete obligations involve clear statements of solicitation by the departed employee where he directly tries to sign up a former client or colleague. Since all the defendant did in this case was send generic LinkedIn messages, they didn’t rise to the level of an actionable solicitation.

The Court also rejected the plaintiff’s argument that summary judgment was premature and that the plaintiff should have the opportunity to take more discovery on this issue.  Illinois Rule 191 allows a summary judgment opponent to stave off judgment while it takes written and oral discovery to assemble evidence to oppose the motion.  But the plaintiff must show a “minimum level of information” showing a defendant is possibly liable before initiating a lawsuit or making a defendant submit to discovery requests.

Since the plaintiff failed to produce any evidence the defendant solicited any of plaintiff’s employees in the prohibited Rhode Island area, summary judgment for the defendant was proper.

Afterwords:

LinkedIn generic invites that don’t specifically ask someone to sever his/her relationship with current employer don’t go far enough to constitute improper solicitation;

Summary judgment is “put up or shut up moment;” the party opposing summary judgment must offer evidence that raises a question of material fact that can only be decided after a trial on the merits.

 

Multi-Year Request for Facebook Activity Too Broad – Illinois Federal Court

Ye v. Veissman (1:14-cv-01531)(Memorandum Opinion and Order) examines the scope of Facebook page discovery requests in the context of a wrongful death suit.

There, the plaintiff, whose daughter was killed in a freak traffic accident as she walked on a downtown Chicago street, sued the responsible trucking company and driver for wrongful death and tried to recover for mental anguish resulting from the accident. 

To probe the depths of the plaintiff’s claimed mental malaise, the defendants sought discovery of the decedent’s Facebook communications going back seven years before the accident.  The plaintiff refused on the grounds of relevance and overbreadth (“it’s a fishing expedition”) and the defendants moved to compel the material.

Denying the defendants’ motion, the Court answered important questions on when social media evidence is relevant to a mental distress claim and the case starkly illustrates the importance of narrowly tailoring discovery requests in this computer-drenched society.

The Federal Discovery Rules and Facebook Data

Federal Rule of Civil Procedure 26(b)(1) allows discovery into any nonprivileged matter relevant to a party’s claim or defense that is proportional to the needs of the case.

Facebook discovery requests can present thorny logistical challenges since  the amount of discoverable information is voluminous, data is retained for a long time and the number of people with whom a given Facebook subscriber communicates is potentially limitless.

In spite of these difficulties, social media evidence is still discoverable so long as the requested information meets the test of relevance.  The Illinois and Federal rules of evidence define relevant evidence as “evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence.”  See Illinois Evidence Rule 401.

The Ye court noted that while “everything posted on social media can reflect a person’s emotional state of mind” at any given snapshot of time, a plaintiff’s injection of his state of mind does not give a requesting party with a “generalized right to rummage at will through [social media] information.”

Seven Years of Facebook Data = Too Broad

Finding the defendants’ discovery requests too broad, the Court noted that the amended discovery rules, effective since December 2015, limit the scope of relevant evidence and required that discovery be proportional to the needs of a given case.

The court allowed that since plaintiff’s damage claims were nebulous by nature – they included mental suffering, grief, sorrow, loss of society, companionship, and consortium – some social media discovery was clearly permitted (and relevant).  This was because the discovery requests sought to shed light on the plaintiff’s mental state and his damages claims.

The court found that “[c]ertainly some social media content during the time period prior to death will be relevant”, this didn’t give the defendants a green light to request unlimited Facebook information.  The court found the seven-year request overbroad as it wasn’t confined to a narrower pre-accident time span.

The extensive request for Facebook data also exceeded relevance restrictions since defendants sought communications between the decedent and third parties who had nothing to do with the accident or the lawsuit.  According to the court, if the discovery requests were pruned to only include communications between the decedent and her immediate family, the requests would likely be focused enough to meet the discovery rules’ relevance and proportionality tests.

However, as the requests currently stood, the minimal relevance of the decedent’s Facebook communications was outweighed by the burden to the plaintiff in producing the data.

To support its findings, the Court cited liberally from recent Federal cases in Indiana and California that found Facebook discovery requests spanning five years (the Indiana case) and seven years (Cal.) too broad under Rule 26.

Afterwords:

This opinion is a good example of a court grappling with the discoverability of social media evidence in a case where a plaintiff’s mental state is clearly at issue.  Like so often, the discovery decision distills to a balancing test: the Court weighs the possible relevance of the requested information against the time, money and energy burden to the plaintiff in producing the information.

While some latitude is allowed in discovery requests, it’s clear from this case and others like it, that discovery requests have limits.  Where the burden of responding to Facebook discovery outweighs the possible relevance of the requests, a court will order the requesting party to constrict its requests.