Status Update or Solicitation? When Non-Solicitation Contracts and Social Media Collide

Platforms like Facebook and LinkedIn have increasingly become tools used by businesses for marketing purposes. At the same time, individual employees may consider these sites personal. This post explores the impact social media activity may have on an ex-employee’s non-solicitation agreement. If a former employee takes to LinkedIn and announces a new position with a competitor to her entire network (which includes your employees and clients), how much leeway does a former employee have before her non-solicitation agreement is violated? While every case is fact-specific, these issues have been playing out in courts across the country. Here is a roundup of some recent cases.

Mobile Mini, Inc. v. Vevea: LinkedIn Update Counts as a Solicitation of Customers¹

Background: The employee here was bound by a non-compete and a non-solicitation agreement with her former employer, which was a storage company. She went to work for a direct competitor. Shortly afterward, she posted two posts on her LinkedIn profile announcing her new position, including an open invitation for people to call her at her new company. Her former employer sued, claiming she had breached the non-solicitation agreement.

Outcome: The former employer wins and the Court ordered the former employee not to post until the non-solicitation period was over.

What Convinced the Court: The Court noted that the posts in question were not “mere status updates” but instead, were blatant sales pitches. Additionally, the former employer submitted evidence from a manager demonstrating that the manager and the former employee had discussed using LinkedIn as a marketing tool while she was employed for the company. The former employee’s LinkedIn network included customers of the former employer. These facts, coupled with the active call to action, was enough to convince the Court that the social media activity was not simply passive activity, but instead, violated the non-solicitation agreement.

Takeaway for Employers: Courts seem to look more at the substance of the “solicitation” rather than the medium. If it looks like an advertisement, chances are, it probably is. Also, if social media is an integral part of your company’s marketing strategy, and the former employee was aware of that point, it may be more persuasive to a court that solicitation is occurring when the ex-employee takes to social media to “update” her network about a new position.

Bankers Life & Cas. Co. v. Am. Senior Benefits LLC²

Background: An employee left the company with an agreement that he would not solicit the company’s employees. After leaving, he sent three LinkedIn requests to connect to current company employees. If those requests were accepted, it would take the individual to the former employee’s page, where there would be an advertisement for an open position at the former employee’s new company. The former company sued, claiming breach of the non-solicitation agreement.

Outcome: The former employer loses—no breach of the agreement was found.

What Convinced the Court: The Court discussed that sending generic emails from LinkedIn requesting to form a professional connection did not constitute solicitation. The employees who received those requests had to take several steps in order to see the job posting, and putting the job posting on his public profile did not constitute a solicitation in violation of the agreement.

Takeaways for Employers: Defining what it means to solicit a current employee or client is key to the enforcement of these agreements. If you want to specifically restrict communication on social media, it should be in the agreement. However, consider whether this level of restriction is necessary. While you might not want a former employee to post on LinkedIn about jobs at his new company and actively target your employees, simply sharing a professional connection might not be an issue.

Arthur J. Gallagher & Co. v. Anthony³

Background: An employee leaves one company, and his new employer issues a press release about his hire on LinkedIn and Twitter.

Outcome: The former employer loses.

What Convinced the Court: The Court contrasted a case where an employer advertised an employee’s new position by putting ads in multiple newspapers over the course of two months, along with mailing 35,000 postcards with the announcement. In that case, the indirect advertising was large enough to qualify as solicitation. Here, two posts were simply insufficient. While social media can have a wide reach, of the company’s 1500 LinkedIn connections, the post was liked by only 7 connections.

Takeaways for Employers: Announcing a new job, even on social media, might not run afoul of a non-solicitation agreement if the reach is not so significant.

_________________________________________

¹ Mobile Mini, Inc. v. Vevea, No. 17-1684 (JRT/KMM) (D. Minn. July 25, 2017).

² Bankers Life & Cas. Co. v. Am. Senior Benefits LLC, No. 1-16-0687 (Ill. App. Ct. June 26, 2017).

³ Arthur J. Gallagher & Co. v. Anthony, No. 16-284 (N.D. Ohio Aug. 30, 2016).