Facebook Announcement Doesn’t Equal Improper Client Solicitation: Mass. Court

In Invidia v. DiFonzo, 30 Mass. L.Rptr 390 (2012), a hair salon sued a former stylist for breaching a non-compete and non-solicitation clause in her employment agreement.  The Court examined whether the new employer’s posting a job change on defendant’s Facebook page and “friending” former clients was improper solicitation.

The employment contract contained a non-compete spanning two years and 10 miles and a two-year non-solicitation clause.  After she resigned, the defendant went to work for a competing salon less than two miles away.  Her new employer then posted an announcement on its Facebook page, promoting defendant’s new affiliation with the competing salon. 

The plaintiff saw the Facebook activity and sued.  The Court denied the request for injunctive relief because plaintiff failed to show a likelihood of success on the merits or irreparable harm.

Rules/Reasoning:

A preliminary injunction plaintiff must show (1) likelihood of success on the merits; (2) irreparable harm if the injunction is denied; and (3) the risk of irreparable harm to the movant outweighs similar risk of harm to the opposing party.  *2. 

Massachusetts courts scrutinize non-competition agreements because they often result from unequal bargaining power.  A covenant not to compete is enforceable only if it’s necessary to protect a legitimate business interest, is reasonably limited in time and space, and supported by the public interest.  *4.

The Non-Compete Provision

The salon plaintiff failed to show that it was likely to succeed on the merits on the noncompete because it was questionable whether a two-year/10-mile restriction was necessary to protect plaintiff’s interest and because plaintiff failed to show that its “legitimate business interest” – the goodwill which plaintiff claimed it lost – belonged entirely to plaintiff.  *5.  

The Court noted that in the hairdressing business, goodwill often belongs to the individual stylist rather than the salon.  That is, customers likely patronize a salon for a specific hairdresser; not because they like the salon itself. 

The Court also found the plaintiff failed to show irreparable harm, since plaintiff could clearly quantify its damages.  The Court pointed out that plaintiff offered evidence of the number of clients that it lost since defendant left (90) and the average dollar amount spent ($87.16) by each lost client.  This militated against a finding of irreparable harm.  *5.

The Non-Solicitation Clause

Turning to the non-solicitation clause, the Court found that the Facebook announcement of defendant’s affiliation with the new salon (by that salon) did not equate to active solicitation.*5.  

Nor did the defendant’s sending  friend requests to eight clients of plaintiff amount to a breach of the non-solicitation provision. 

The employer did however have some circumstantial evidence in support of its solicitation argument.  It offered documents at the injunction hearing that demonstrated that some 90 salon clients had cancelled (without rescheduling) appointments in the two-plus months since defendant’s departure. *6.  Yet the Court wasn’t prepared to find this a breach of the anti-solicitation provision.  The Court stressed that no current or former clients testified that defendant contacted them and solicited their business.

Take-aways: A third party’s passive Facebook posting and direct Facebook friends requests are not enough to establish solicitation for preliminary injunction purposes.  Instead, there must be direct evidence of active solicitation to merit injunctive relief.

 

 

 

Facebooking at Work: A Federal Offense? (With ‘Aarons Law’ Update)

Can surfing the Net on company time get you fired?  Perhaps.  Can it subject you to Federal criminal and civil penalties?  Not yet.  At least not in the  Tampa, Florida area.  Wendy Lee v. PMSI, 2011 WL 1742028 (M.D.Fla. 2011) illustrates a creative attempt to expand the reach of the Computer Fraud and Abuse Act (CFAA)(which, incidentally, will be the subject of some future posts).  The CFAA, codified at 18 U.S.C. s. 1030, is a criminal statute with a civil component. It provides a private civil cause of action for anyone who sustains damage or loss as a result of an unauthorized user hacking into a computer system who then destroys, erases or transfers computer data.  It also prohibits authorized users from accessing protected information and from exceeding the limits of their authorization.  In this latter context, the CFAA is typically used by an employer when a rogue employee or “insider” accesses private employer computer data and sends the data to a competitor.

In PMSI, the Plaintiff filed a Federal pregnancy discrimination suit against her employer.  The employer fired back with a counterclaim based on the CFAA – saying that the Plaintiff spent her workdays surfing the Internet and playing on Facebook.  So egregious was the Plaintiff’s personal computer use, that the employer asserted a CFAA violation claiming the Plaintiff violated her employer’s published computer/Internet use policy.

The Court dismissed the CFAA count and said that while Facebooking at work may be a fireable offense; it does not subject one to Federal criminal or civil liability.  The court gave a narrow reading to the CFAA and held that the statute did not apply to a private employee’s violation of an employer’s internet policy.  Otherwise, the court said, every employee across the land who used a company computer to send and receive personal e-mails or who surfed the Net for non-work reasons could potentially be subject to Federal liability.

So, for now, Tampa area office workers can safely surf the net on company time without being subject to CFAA liability.   Whether the same workers can be fired for violating an employer computer policy, is an issue for another day and perhaps another post.

Update (7.15.13):  Recently, some proposed changes to CFAA were introduced by Zoe Lofgren and Ron Wyden, democratic congressman and senator from California and Oregon, respectively.  These changes, known as “Aarons” law (named for the late internet activist Aaron Schwartz), are designed to narrow the reach of the CFAA so that the statute is only used to prosecute outside hackers, rather than criminalize every-day violations of private employer computer policies or Internet terms of use.  Some helpful links follow.

http://www.wired.com/opinion/2013/06/aarons-law-is-finally-here/

http://www.lofgren.house.gov/images/stories/pdf/aarons%20law%20summary%20-%20lofgren%20-%20061913.pdf