Consider the following scenario: Your company uses sales representatives to sell its products. To protect your company’s relationship with its other employees, you require all sales reps to sign a no-solicitation agreement as a condition of their employment. Under the agreement, reps cannot directly or indirectly solicit any employee of the company to terminate his employment with the company.
If an employee connects with co-workers on Facebook or any other social network and then leaves your company, has he violated the no-solicitation agreement by maintaining the connections?
According to the court in Pre-Paid Legal Services, Inc. v. Cahill, the answer is no.
“In this case, PPLSI complains that Facebook posts … constitute solicitations presumably because some of Defendant’s Facebook ‘friends’ are also PPLSI sales associates and may view Defendant’s posts…. PPLSI has not shown any intent on Defendant’s part to solicit current PPLSI associates…. There was no evidence presented that Defendant’s Facebook posts have resulted in the departure of a single PPLSI associate, nor was there any evidence indicating that Defendant is targeting PPLSI sales associates by posting directly on their walls or through private messaging.”
In other words, because the employer could not demonstrate any intent on the part of the departed employee to solicit other employees via Facebook, the mere fact that they are Facebook friends is not enough to violate the no-solicitation covenant. Presumably, the same logic would hold true if the no-solicitation covenant applied to customers instead of employees.
One case does not equal dogma (although Cahill did discuss and agree with another similar case from an Indiana appellate court, Enhanced Network Solutions Group, Inc. v. Hypersonic Technologies Corp. These cases are highly fact-specific and depend as much on the court’s perception of the parties’ equities as they do on the language of the challenged agreements.
If, however, you are concerned about ex-employees using Facebook, Twitter, LinkedIn and other social networks to lure employees or customers, consider implementing the following three protections.
1. Define who owns a social media account. If it is a business account or a mixed-use account (an employee’s personal account used for business purposes), make it clear in writing who owns the account—who owns the likes, friends, followers and other connections—and how a departing employee is supposed to handle the transition of the account to someone else in your company.
2. If you value customers and connections as a trade secret, set limits on how, and with whom, employees can connect online. If you do not want your competitors knowing who your salesperson’s key customers and contacts are, then forbid online connections. LinkedIn puts everyone’s rolodex in the cloud. Limiting its use may help you regain some control, but it may antagonize your customers and employees, who increasingly rely on LinkedIn and other social networks for connectivity. If you allow employees to connect via social networks, you need to abandon hope of protecting social media connections as a “trade secret.” The cornerstone of a trade secret is its secrecy. Yet, such secrecy is the antithesis of social media. It is hard to claim one’s Twitter followers are a trade secret-protected customer list when anyone can see them.
3. Define “competition” or “solicitation” to include using Facebook, Twitter, LinkedIn, etc. to lure employees and customers. Consider including language such as the following:
“Solicitation” includes, but is not limited to, offering to make, accepting an offer to make or continuing an already existing online relationship via a Social Media Site. “Social Media Site” means all means of communicating or posting information or content of any sort on the Internet, including to your own or someone else’s web log or blog, journal or diary, personal website, social networking or affinity website, web bulletin board or a chat room, in addition to any other form of electronic communication.